Republicans like John Thune and Kristi Noem like to rant about how America’s corporate taxes are the highest in the world and that if we only would cut them we could jump start the economy and create jobs.
It’s a great political line. It also happens to be untrue.
Recent tax figures released for 2011 indicate that the corporate taxes as a percentage of the Gross Domestic Product (GDP) of this country were 1.2 percent or $180 billion dollars last year. That is as low a percentage America corporations have paid since the beginning of the industrial revolution.
Indeed, research shows that our corporate tax rate last year in terms of taxes paid by corporations in America was approximately 12 percent not the 35 percent myth that Republicans would like to have Americans believe. That 12 percent is a stunningly low number and one that places American corporations’ tax burden well below those of most all the industrialized countries in the world. That is a fact and no amount of rhetoric can change that.
Repubs throw that crap against the wall all the time hoping it will stick, but pesky damn facts and numbers always find they are lying.
Interesting because one thing came to my mind when I read that America’s corp tax being one of the lowest in the world – Why the hell are we outsourcing jobs?
BG – Because wages are a lot less in China, Vietnam, The Phillipines, Mexico, and India.
The profits are still taxed at the home company base (unless they hide them offshore which is so often the case), but it can cost half as much to pay an employee overseas as what it does here even after including operating expenses. As long as there are people willing to work for $3 or $4 and hour and as long as they don’t require health insurance, pension / retirement plans, or other benefits that we consider “normal”, companies will continue to outsource.
There are too many half-truths to take this publication seriously. They aren’t treating this like an issue where people need to be educated on an issue, they’re treating it like a political issue to spin.
For instance, let’s say Company A loses $1 Million in year one. In year two, they make $1.5 Million. In this scenario, since they can carry forward the loss from last year, they only pay taxes on $0.5 Million which ends up being 11-12% on the earnings in year two.
The tax code is complex. Even President Obama has suggested that we lower the rates and remove some of the ‘loopholes’.
Well it is a left leaning publication. Good observation. I guess?