"The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue.
The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies."
As you can see, regardless of what the rate is, most corporations pay no taxes at all. I wish I could pay no taxes at all, yet still have tons of people saying that my rates are too high. That's from CNNmoney, but the data is available everywhere. Corporations have a great many loopholes that they can exploit. I had my own small corporation in the 90s, and I never paid a dime in corporate taxes. It's trivially easy to avoid paying taxes as a corporation. I wouldn't worry too much about the corporations. They could make the corporate tax rate 100%, and still, the bulk of corporations would never pay a dime. Likewise, giving them a big tax break won't lower their net tax burden below the current $0 that most pay. Unless you're suggesting we PAY them with taxpayer money.
Incidentally, Palin isn't against massive corporate taxes. She's got four different taxes going on the oil companies. That's why Alaska's gas prices are so high. (But then all that money gets redistributed to the Alaskan population each year in big checks, which more than make up for the extra gas cost, at least for people who aren't driving 1000 miles a day across the tundra.) The tax rate on Alaskan oil companies is a mind-boggling 75% on the profit of each barrel of oil. If you think the oil companies are greedy, well, they only get 25% of the profits in Alaska, and Governor Palin takes 75%. Because of that, she's probably responsible for at least a goodly chunk of the price we pay for gas in this country.
I think the best way to address corporate taxes is to do two things. First, go ahead and lower the rate. What is it now, 15%? Lower it to 5% or 10%. Secondly, apply the tax to the *gross* profit, not the net. This would simplify things enormously, and at the same time this would eliminate all loopholes. If this had been the case in the 90s, I would most definitely have paid some taxes. I felt a little guilty about how easy it was to pay none, but it was legal, and my attorney advised me to exploit all the loopholes I could, so I did. This minor change would benefit the very largest most profit-centric companies more than medium or small businesses, but I still think that it'd be more fair. But I bet if you offered the average small or medium business the choice between a 25% tax rate with all of today's loopholes, or 5% with none, they'd take the 25% and the loopholes. And why not, when they'd pay no taxes at all with the 25% rate, just as they pay none now.
I hear people say that our corporate tax rate is among the highest in the world. Yeah, it is...before you factor in the loopholes that reduce the tax burden for 70% of all corporations that do business in our country, foreign and domestic, to nothing. If you take all the corporate taxes actually *paid* by every corporation doing business in our country, add that all together, and divide by the combined revenue of those companies, I suspect we would compare very favorably indeed with any other country on this planet. In other words, while our base corporate rate may *appear* high, the number that matters is how much in taxes is actually paid per dollar of revenue, and that is a much, MUCH lower amount. You have to compare apples and apples.
(You can write, but, can you read?)
