Why is President Obama proposing to reduce the corporate tax rate by 20%?
President Obama is proposing to cut the corporate tax rate from 35% to 28%. If you are a progressive like myself, you might be wondering why? Of course, he is saying that it will make American corporations more competitive and therefore they will create more jobs in America. Do you actually believe that crap? Isn’t this just more of the trickle-down nonsense that we have been hearing for the past thirty years?
Let’s look at the facts. The effective corporate tax rate is only 12.1%: that is a forty year low. Who is paying 35%? Not some of the top thirty most profitable corporations. They are not paying any corporate taxes.
For instance, GE did not pay any taxes in 2010, but had a negative tax rate of 64%, entitling it to a huge tax refund.
You might wonder that American corporations are suffering from this recession and that’s why Obama is proposing a huge tax reduction for them. Think again, dodo brain. They made $1.97 trillion in corporate profits in the third quarter of 2011 alone. Corporate profits have never been higher over the past sixty years.
Sixty years ago corporations accounted for 30% of all of the federal tax revenues. Now they only account for around 5%. On the other hand, payroll taxes accounted for 10% of all of the federal tax revenues 60 years ago; now they account for nearly 45%.
Are you catching on? In essence, corporate employers have shifted the cost of operating our government from themselves unto their employees, just as they transferred the cost of the medical insurance and retirement benefits onto their employees. Cool, huh?
Obama talks left but walks right…in fact, he walks right to Wall Street where he gets his marching orders. After all, Goldman Sachs was his largest single donor in 2008. Why would he bite the hand that feeds him?
Still not convinced? Has Alzheimers already sizzled your synapses? Consider the following: not only did Obama appoint Wall Streeter Tim Geithner as his top economic advisor, and Lew Jacobs (that former Citigroup CEO who never met a derivative that he didn’t love) as his chief of staff, but he also appointed GE’s Jeffrey Immelt as the head of his Job’s Council. That very same GE that gets billions of tax revenues from us and has been shipping all of its jobs to China. And he is the head of our Job’s Council?! What is wrong with this picture?!
If you believe that lowering the corporate tax rate will create jobs in America, then do I have a used car that I want to sell to you.
For an enlightening interview including Warren Buffett, Chris Christie, Cenk Uygur, et al, please see Should corporate taxes be lowered when their effective tax rate is only 12.1%?
Don’t let President Obama snooker you again as he did us all three years ago. He is Corporate America’s Man in Washington. He was chosen by Wall Street for the role as President because he fit the bill perfectly: he looks progressive, unlike Romney’s country club look; even talks progressive, uttering such lofty sounding yet trite, hackneyed, nebuous generalities of patriotism, togetherness, and other rot; however, when it comes to proposing and enacting change affecting our wallets and pocketbooks, he doesn’t deviate from the play book provided by Corporate America.
Clever, huh? Or are we just a bunch of morons?