It’s Not Just About the Millionaires- NYT
This election is about stark differences on economic policy, but one of the few fiscal issues on which Democrats and Republicans agree — surprisingly — is how to tax corporations. Every Republican presidential candidate, and even the guy who currently has the job they’re after, wants to lower rates. Raising them, or even maintaining them, might satisfy the anti-corporate angst of protesters and populists, but it won’t come anywhere near paying off our debt.
Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high. The cardinal rule of taxation is that whatever you put a levy on, you’ll inevitably get less of. Taxing corporate activity means less investing, less hiring, fewer jobs and a smaller economy, which hurts the rich, the poor and the middle class alike. While this may seem like Republican propaganda, NPR’s “Planet Money,” for which I work, polled many leading progressive policy groups and academics, all of whom told us that they would support lowering the top corporate tax rate. In his 2011 State of the Union address, President Obama agreed. Republican candidates are even talking specifics: Mitt Romney proposes dropping it to 25 percent; Rick Perry wants to lower it to 20 percent; Herman Cain, of course, is pushing 9 percent.
If everyone agrees that corporate taxes should be lowered, why isn’t there a deal? One reason is that many corporations, despite claims to the contrary, don’t mind a complex tax code with a high statutory rate — often because few large companies pay anything close to 35 percent. Multinationals avoid taxes by moving profits around their global subsidiaries. U.S.-based businesses hire huge teams of lawyers to navigate motley tax laws and widen every loophole. All politicians advocate eliminating these loopholes until it’s their constituents that benefit — in which case the loophole is renamed an “incentive.” Republicans and Democrats in Iowa will punch you in the nose if you question ethanol tax credits. Most people who run for office in Texas and Louisiana like all the sweet tax deals for oil extractors.