With Tax Day tomorrow, it seems like the subject of taxes -- tax policy, tax fairness, tax reform -- is on everyone's minds.
On Tuesday, President Obama gave a speech in Florida in support of the Buffet Rule, in what is likely a move to make tax fairness a centerpiece of the 2012 campaign. And perhaps for good reason. Earlier this month, an ABC/Washington Post poll found that Americans overwhelmingly favor tax reform, with respondents viewing "unfairness in the economic system that favors the wealthy" as a bigger problem than "over-regulation of the free market that interferes with growth and prosperity," by a 52-37 margin.
Obama's speech came on the heels of the release of a report by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, showing that 30 of the largest profitable American corporations made use of special tax loopholes in order to pay an average federal tax rate of three percent on a combined $205 billion in profits since 2008. Anyone who sits down and does the math will find that, if this handful of corporations actually paid the 35 percent corporate income tax rate that they are supposed to pay before the various tax incentives come into play, we would have an extra $78 billion to fix the budget gaps that are plaguing cities and states across the nation.
And of course the month began with the announcement that the United States had officially surpassed Japan as having the highest statutory corporate tax rate in the world. Although conservative groups like the Heritage Foundation and the U.S. Chamber of Commerce made a point of bemoaning this news, they seem to have glossed over the key word "statutory," which refers to the amount corporations are supposed to pay. As the folks at ThinkProgress helpfully pointed out, the statutory rate makes little difference to rich corporations, because the average effective corporate tax rate -- i.e. the rate they actually pay -- sank to 12.1 percent in 2011, which is the average lowest rate in 40 years.
On Tax Day this year, billion-dollar corporations and their CEOs will likely celebrate another year of low (and, in many cases, negative) tax rates, thanks in large part to the millions they shell out to lobbyists to make sure the tax code contains loopholes in their favor. But for the 99 percent of Americans who don't use lobbyists to bend the tax rules, Tax Day is a day for reflecting on why we pay taxes. Schools, parks, bridges, roads, universities, services for children and the elderly, regulations that keep our air and water clean and our food safe -- this physical and social infrastructure that serves the common good would not exist if the 99 percent didn't recognize the importance of paying their fair share.
Tax-dodging corporations, of course, benefit from the common good. In fact, none of the Fortune 500 corporations would be around, much less have grown to be enormously profitable, if we didn't collectively invest in our communities and our future through the payment of income taxes.
Here in Chicago, community groups are coming together to deliver this message loud and clear, starting with some of the United State's most egregious corporate tax dodgers. Over the last two weeks, Stand Up! Chicago's 99 Percent Citizen Tax Enforcers have donned their black suits, sunglasses and briefcases and delivered over-sized tax bills to Bank of America, Boeing, Exelon, CME Group, General Electric, BMO Harris Bank, and Sears -- all profitable companies that have received billions in state and federal tax breaks over the last several years.
And on Tax Day itself, hundreds of Chicagoans will be taking to the streets in a march and rally to demand tax reform, calling upon the giant corporations and CEOs that have benefited the most from our taxpayer dollars to pay their fair share like the rest of us. The Stand Up! Chicago coalition will be joined on April 17 by similar actions all across the country, as 99 percent taxpayers observe Tax Day by making it clear that we need a tax system that works for everyone, not just the one percent.