Thursday, August 7, 2014

Hot little numbers

When they tell you the US has the highest corporate tax rate in the world at 35% and it just has to come down or all our industries are going to Luxembourg, just remember that, as the Times reminded us today, it isn't true.
According to a study of scores of Fortune 500 companies released this year by [Citizens for Tax Justice's Robert S.] McIntyre and the Institute on Taxation and Economic Policy, the average tax rate from 2008 to 2012 on utility, gas and electric companies was 2.8 percent. The rate for the industrial machinery sector was 4.3 percent, while the telecommunications industry averaged 9.8 percent. For the aerospace and military industry, it was 19.7 percent. Dozens of corporations including Verizon, Boeing and Corning paid the government absolutely nothing.
Thanks to the wilderness of loopholes, the effective tax rate varies wildly from industry to industry, but overall is not so different from that of other countries, and definitely on the modest side.

Chart by Center for American Progress. I can't find a proper credit but I think it was first used here.

The reason they keep saying that it's so high it's bankrupting them and that if you get rid of the loopholes it must be in a revenue-neutral manner is nothing but shameless extortionism: they want to noodge us into giving them another break.

And it usually works, which is how it got this way in the first place.

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