America's corporate giants didn't get where they are by sitting back and accepting the status quo, people, which is why paying next to nothing in taxes is simply not going to be good enough for them.
Faced with the cruel injustice of their low tax burden, two new teams of all-star American hero companies have formed to fight to lower corporate tax rates even further.
One of them is called RATE, short for Reforming America's Taxes Equitably, which on Monday wrote a letter to President Obama and leaders of both parties in Congress, saying: "As business leaders, we consider comprehensive tax reform with a significant corporate tax rate reduction to be a top priority for our companies and our country."
RATE objects to the U.S. corporate tax rate, which is set by law at 35 percent -- a rate that many companies never pay. The average effective U.S. corporate tax rate over the past three decades has been 19 percent, former White House Office of Management and Budget director Peter Orszag recently pointed out. This is because our tax code provides lots and lots of big, wide loopholes through which companies sidestep paying taxes.
RATE takes the Pete Peterson/Simpson-Bowles approach of appearing bipartisan and open to changes in the corporate tax code that even liberals will love. RATE is co-chaired by a New Democrat and a former adviser to Mike Huckabee, so you can just imagine the arguments they must have! Is Corporate America the best, or the very bestest, goes one of those arguments. On and on they'll argue, until it's really time to fight, and then all differences are put aside. For justice. And lower corporate tax rates.
Anyway, just to prove that RATE is not some kind of corporate shill, RATE says that, hey, man, it wants to close corporate tax loopholes, too, just like the rest of you dirty hippies. But there's a twist: RATE wants to take the savings from those closed loopholes and give them back to companies in the form of lower tax rates, instead of using the closed loopholes to, oh, I don't know, pay for poor people to have health care or something. You see, once corporate tax rates are low enough, then the economy will boom, and those poor people will have jobs and be able to afford their own health care. Problem solved.
Except, again, that companies already pay much, much lower tax rates than that 35 percent rate, which hasn't helped the economy all that much lately.
In fact, many companies pay nothing in taxes, or get a check back from the government. For example, Boeing, which is part of the RATE coalition and signed the RATE letter to President Obama, has paid a federal tax rate of negative 6.5 percent over the past decade, according to a study by the Citizens for Tax Justice.
Other companies signing Monday's letter to Obama included Altria, AT&T, CVS Caremark, FedEx and UPS.
A recent Washington Post analysis found that the 30 companies in the Dow Jone Industrial Average, including Boeing, shoulder less than half the tax burden today, as a share of profits, as they did a couple of generations ago. For example, one company, Procter & Gamble pays 15 percent of its profits in taxes now, as opposed to 40 percent in 1969, according to the Post.
Many of those Dow companies, including Procter & Gamble, are in a second corporate supergroup, calling itself LIFT America, short for Let's Invest For Tomorrow, America. LIFT recently launched its effort to make one big corporate tax loophole permanent. It wants the U.S. to adopt a "territorial" tax system, which means companies won't pay any taxes on what they make overseas, which LIFT claims will "unlock" $1.7 trillion in foreign profits being held offshore.
Other companies in LIFT include 3M, Caterpillar, Cisco, Coca-Cola, Oracle and Pfizer.
As the Huffington Post's Ben Hallman wrote when LIFT was still just a rumor, the "unlocking" of that $1.7 trillion will likely mean the Internal Revenue Service will never see a dime of that $1.7 trillion, nor any other future profits companies make overseas. It could also mean more companies flee overseas to avoid taxation.
Ironically, many of the same companies that would benefit from lower tax rates and permanent overseas loopholes were also part of the "Fix the Debt" campaign goading U.S. politicians to fix the gosh-darn budget deficit already. As the Institute for Policy Studies wrote last fall, "Fix the Debt" was a "Trojan Horse for massive corporate tax breaks."
They never stop trying.
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