re:  "Corporations not pulling weight on taxes"

Mr. Loren Stuffy writes that "Corporate America isn't pulling its weight" with regards to taxes, claiming that "businesses are dumping their share of the tax burden off on the American people."  As evidence, he cites a GAO report that claims that nearly two-thirds of American corporations didn't pay corporate income taxes in every tax year between 1998 and 2005.  The study ignores, however, whether or not the companies actually made profits in the years in which no such taxes were paid.  The latter claim ignores that the tax burden on individuals decreased during the time of the report, and the percentage of the total income tax receipts paid by the richest Americans has increased.  Tax revenues collected from corporations between 1998 and 2005 increased from approximately $189 billion to $279 billion; the percentage of total federal revenues collected from corporate taxes increased from 11.0% to 12.9% over that same period (source:  US Office of Management and Budget).

 

The data show that contrary to Mr. Steffy's claims, "Corporate America" is in fact "pulling its weight" with regards to paying taxes.  It is also worth noting that the increase in corporate tax receipts occurred during a period where the corporate tax rate was decreased, although it remains one of the highest among industrialized countries.

 

One other important fact is ignored by the focus on corporate tax rates and receipts:  every dollar paid by a corporation to the government is a dollar not spent on capital investment, new jobs, increases in wages and benefits for workers, or dividends for investors.  We should want more money involved in creating wealth for workers, investors, and pension funds and less being spent on wasteful government programs rather than the other way around.

Sincerely,
Dave Smith