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Entries tagged "Taxes"Page Previous • 3 • 4 • 5 • 6 • 7
January 26, 2011 · By Chuck Collins
In his State of the Union speech, President Barack Obama zeroed in on the ways that corporations have gamed the tax code, saying:
"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."
It's encouraging that Obama is zeroing in on the myriad abuses in the corporate tax code.
Unfortunately, he repeats the tired canard of anti-tax groups that complain about our "highest in the world" tax rates. It is true that statutorily, the U.S. has a high 35 percent corporate income tax rate. But the effective rate — the percentage of income actually paid in taxes — is considerably lower than in most industrial countries.
How low? According to a Bush administration Treasury Department report from 2007, U.S. corporations paid an effective rate of 13.4 percent of their profits in corporate income taxes during the years 2000-2005. Corporations in OECD countries on average paid 16.1 percent of their profits in corporate income taxes.
President Obama called on lawmakers to simplify the system, eliminate loopholes and level the playing field. He pressed them to "use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit." By broadening the base and eliminating loopholes, Congress could lower the tax rates without reducing deficits. But revenue shouldn't just go back to corporations in the form of a rate cut. Some of this revenue should be used for long overdue investments in education, health care, and energy retrofits. Citizens for Tax Justice, in a report released shortly before Obama's speech, called for "revenue-positive reform of the corporate income tax."
On the positive side, he called for eliminating tax breaks for the oil industry — and shifting incentives to support clean and renewable energy. He was quiet about the overseas tax havens and global tax-dodging that has gotten completely out of hand.
Cracking down on corporate tax dodgers could be a unifying theme in the new Congress.
September 29, 2010 · By Kevin Shih and Sanho Tree
Todd Henderson, a corporate law professor at the University of Chicago, claims that he is struggling during these tough economic times--despite the fact that he has an annual household income of $400,000.
According to Fox News:
“A quick look at our family budget, which I will gladly share with the White House, will show him that, like many Americans, we are just getting by despite seeming to be rich. We aren’t,” Henderson wrote.
[Henderson] said he and his wife, a doctor, paid $100,000 in federal and state taxes last year and $15,000 in property taxes. He wrote that they have a mortgage on a house they own a short distance from President Obama’s home, and they are paying off $250,000 in student loans. With an annual income of more than $250,000, he wrote, he and his wife are far from super-rich.
Although many people on the Right are using this story to advocate for a full-on extension of the Bush Tax Cuts, and to reject any proposals that would tax the "super rich," these numbers are incredibly misleading and ill-informed.
Like what Professor Bradford Delong of University of California at Berkeley had observed, Henderson doesn't acknowledge the fact that he is among the select few in this country. The only reason why he has so much cash output is because he has the capability to buy and pay for a nice house in a bougie neighborhood (only a short distance away from the Obamas!), and to send his kids to expensive, quality private schools. These are privileges that only the super-rich enjoy.
With our unemployment rate currently at 9.6%, and with so many people out there struggling to pay for the necessities to keep themselves alive, I wouldn't consider Henderson's situation bad at all.
Nobody says it better than IPS's own Sanho Tree when he heard the story: "Half the planet lives on less than $2/day. It gives new meaning to the expression, 'Eat the rich!'"
So maybe Henderson should have thought twice before he decided to complain about his $400,000 annual household income.
September 16, 2010 · By Chuck Collins
Congress is actively debating whether to retain President Bush’s 2001 and 2003 tax cuts for the wealthy that are due to expire at the end of this year. President Obama supports extending tax cuts for households with incomes under $250,000, but ending the tax breaks for higher income households.
Here are five good reasons for Congress to let them go:
1. Borrowing to Give the Rich Tax Breaks is a Really Bad Idea. We’ve already borrowed $700 billion since 2001 to pay for these tax cuts. Maintaining them for another decade would cost an estimated $700 billion, plus interest on the national debt estimated at $126 billion. Does it really make sense to send interest payments to China and millionaire bond-holders in the U.S. – so that we can cut taxes for U.S. millionaires and billionaires?
2. There are 700 Billion Better Ways to Use the Money. Consider the superior ways to spend $700 billion. We could use a portion to reduce budget deficits. We could make long overdue investments in infrastructure such as bridges, roadways, railroads, water treatment facilities, retrofitting buildings – things that make our economy strong and competitive. We could direct funds to make the transition to the new economy that is less dependent on foreign oil. In the short-term, all these investments would create millions of jobs. In the long term, it would put the economy on better footing for the future. There are a billion better ways to use the money.
3. Restores Balance to Tax Code. Over the last half century, Congress has steadily reduced tax obligations for the very rich and global corporations. Between 1960 and 2004, the top 0.1 percent of U.S. taxpayers – the wealthiest one in one thousand – have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent. Restoring the tax rates to pre-2001 levels would be a very slight increase, yet begin the process of rebalancing the tax code.
4. It Won’t Hurt the Economy. You’ve heard the blather about how taxing the rich is going to hurt the economy. But cutting the taxes for the wealthy are an ineffective way to help the economy. A recent analysis by the Congressional Budget Service ranked 11 strategies to spur the economy and create jobs. Cutting taxes for the rich was the worst ranked strategy. Here’s the reality: Taxing the rich is different than taxing the middle class. The rich save more of their tax cuts while working people and middle class spend it in the economy. Over the last decade, the top wealth holders have shifted trillions of dollars into speculative investments that have hurt the economy.
5. The U.S. Public Supports It. A recent Gallup Poll reveals that 57 percent of the population support letting the tax cuts for the rich expire – while 37 percent support extending them. Polls rarely reveal support for any form of taxation, which indicates that a majority of Americans – including those who will pay the hire taxes – recognize the imprudence of extending them. Alan Greenspan, who supported the tax cuts in 2001, has now reversed his position and believes the time has come to raise taxes.
July 20, 2010 · By Emily Schwartz Greco
Rep. Pete Stark introduced legislation today that would "simply impose a small tax--of five thousandths of one percent, or 0.005%" on speculative currency transactions, the California Democrat said in on Huffington Post. "The money raised would be put toward investments in children, global health, and climate change mitigation."
Unless you're a Wall Street bigshot, you don't have to worry about the toll this tax will take on your wallet or portfolio. Stark's "Investing in Our Future Act" (aka H.R. 5783) isn't likely to impact your bottom line.
"For ordinary investors the costs would be negligible, like a tiny insurance fee against the crashes caused by speculators," Institute for Policy Studies fellow Sarah Anderson explained in her recent OtherWords op-ed Who Should Pay for the Crisis?, which called for a measure like this on stock, derivative, and currency trading, as well as other financial instruments. Her op-ed has run in at least nine newspapers so far, including The Providence Journal and the Mount Vernon (OH) News.