Tax (Photo credit: 401(K) 2012)
If Mitt had been elected with GOP majorities in Congress, he could have had his tax plan passed into law, eliminating corporate income taxes, dividend taxes, capital gains taxes and the estate tax. Then Mitt could have paid no Federal income taxes at all, and he would have become a card-carrying member of the 47% who take no responsibility for their lives. Even though his income is north of $20 million per year, he would have been the recipient of government services like the rest of us for which he paid nothing. Instead of being part of the 47%, he remains the out-of-touch member of the 1% who received 47% of the vote.
Fareed Zakaria, Editor, Newsweek International was a featured speaker at Charles Schwab Institutional Impact 2007 at the Mandalay Bay Convention Center, Las Vegas, Nevada, United States. (Photo credit: Wikipedia)
I usually agree for the most part with Fareed Zakaria whose show GPS is broadcast each Sunday morning at 8am and 11am, Mountain daylight savings time on CNN. However, this morning July 15, 2012, I disagree most strongly with his assertion that the US has the second highest corporate tax rate in the industrialized world. That is a nominal rate. The effective rate is one of the very lowest, exceeding only that of Iceland as the lowest rate.
He indicated that corporate taxes now provides only 8% of total Federal revenue. That is down from the 10% I had seen in past articles. If the Federal government gets only 8% of its revenue from corporations, that means that people like you and me provide the other 92%. Please think about that. In the 1950s and 1960s, corporate taxes supplied 35% of federal revenue and individuals 65%. I think that the share of Federal revenue supplied by corporate taxes are moving in the wrong direction.
If corporations are people, why aren’t they paying taxes like real people?
Image via Wikipedia
Corporations don’t pay enough in Federal taxes. They paid 1/3 of Federal revenues in the 1950s and individuals paid 2/3. Over the years the corporate share has dropped to 1/10 and individuals now contribute 9/10 of Federal revenue. John McCain and Wolf Blitzer, just moments ago, claim that the US corporate tax rates are the highest in the world. Those are NOMINAL rates. In fact, the effective rates, the rates they actually pay in dollars and cents, is the second lowest in the industrialized world, only second behind Iceland according to the Center for Tax Justice. The revised corporate tax law proposed by Barack today is revenue neutral; it will neither raise nor lower total revenue.
Image via Wikipedia
Fifty plus years ago, corporations paid about 1/3 of Federal taxes and individuals 2/3. Now corporations pay about 10% forcing individuals to pay the remaining 90%. Rick Santorum wants to reduce Federal corporate taxes to ZERO. If corporations are people, they should pay the same rates as you and I.
Some countries in Europe assess an annual wealth tax, a fraction of 1%, on a person’s net wealth, similar in nature to a property tax. I would like to see a graduated wealth tax here in US with an exemption for taxpayers of little to moderate net wealth. The wealth tax could and should also apply to wealthy corporations.
Please see Santorum and Obamacare