What a surprise. It seems those those CEOs from Business Roundtable who met behind closed doors with Barack Obama Tuesday and with “Blue Dog” Democrats on Capitol Hill yesterday were much more interested in pushing for lower corporate tax rates than in discussing job creation. The CEOs argued that Congress “tax reform” shouldn’t be delayed until after the November elections. One of them, quoted in Roll Call, repeated an oft-heard complaint about corporate tax rates in America:
Procter & Gamble’s president and CEO Bob McDonald, who chairs the Roundtable’s tax and fiscal policy committee, said that the country’s corporate tax rate will become the highest in the world when Japan lowers its rate three weeks from now. The Obama administration recently released its own proposal for lowering the corporate tax rate from about 35 percent to about 28 percent. The CEOs said they support lowering it to about 25 percent.
McDonald is a liar, and Roll Call should have said so — politely, of course — by citing, as Salon did in November, the results of a study conducted by Citizens for Tax Justice and the Institute on Taxation and Economic Policy:
The authors looked at the tax filings from 2008-2010 of 280 of the nation’s biggest, most successful corporations. These companies reported $1.4 trillion worth of profit during a period when most Americans were struggling to stay afloat. The authors discovered that the average effective tax rate — what the companies really paid after government subsidies, tax breaks and various tax dodges were taken into account — was only 18.5 percent, less than half the statutory rate. Fully a quarter of the 280 companies paid under 10 percent.
Remember that fact, the next time someone tries to tell you that American corporations pay the highest income taxes in the free world. The only number that counts is the “effective tax rate.” One of the interesting tidbits provided by the authors is that in many cases, the tax rate on foreign income for many of these companies is actually higher than the effective U.S. rate…
Think about it: Corporate tax rates in America are at a 40-year low, and still the CEOs bitch and lie about them. If only we had a president and Congress that would call them on their lies and greed.