Home > Plutonomy, Politics and the economy > High profits, low taxes

High profits, low taxes

from David Ruccio

The United States is now a country in which corporations make extraordinary profits and spend more to remunerate their CEOs and to engage in lobbying than they pay in federal taxes. 

source

That’s the conclusion of a new report by the Institute for Policy Studies, “Executive Excess 2011″ [pdf].

Guns don’t kill people, the old saw goes. People do.

By the same token, corporations don’t dodge taxes. People do. The people who run corporations. And these people — America’s CEOs — are reaping awesomely lavish rewards for the tax dodging they have their corporations do.

In fact, corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes.

  1. September 2, 2011 at 2:39 pm

    The purpose of the income tax is not to raise revenue, because the same amount of government revenue can be obtained without the negative consequences of income taxation. The purpose of the income tax is to enable the wealthy interests to escape taxation with exemptions, deductions, and credits, and thus shift the burden to labor. The main way a worker can escape some of the income tax is with real estate, because that way the petty landowners become allies of the big transfer-seeking landowners. Those who advocate to increase tax rates on corporations end up further entrenching the dysfunctional corporate tax; such progressive become the unwitting allies of the rent-taking conservatives. The effective remedy is to replace corporate income taxation with a tax on the asset that corporations cannot hide or move out of the country or avoid producing.

  2. Keith Wilde
    September 3, 2011 at 1:25 pm

    My mentor at Bank of Canada in the 1960s advocated complete elimination of the tax on corporate income, because of all its perverse and variable effects. He recommended instead a tax on their net costs–a substantial encouragement to efficiency and humble chief executives. It is shareholders who should pay tax on corporate incomes.

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