The little secret the cons and republicans have attemped to keep from Americans since the 1980's. It is well past time that cons and republicans are held responsible and accountable for the present egregious income inequality.
The article...
The New York Times - The main cause of the radical decline in tax rates for very wealthy Americans over the past 75 years isn’t the one that many people would guess. It’s not about lower income taxes (though they certainly play a role), and it’s not about lower estate taxes (though they matter too). |
In the 1950s, ’60s and ’70s, many corporations paid about half of their profits to the federal government. The money helped pay for the U.S. military and for investments in roads, bridges, schools, scientific research and more. “A dirty little secret,” Richard Clarida, an economist who’s now the vice chairman of the Federal Reserve, once said, “is that the corporate income tax used to raise a fair amount of revenue.” View graph by clicking HERE. Since the mid-20th century, however, politicians of both political parties have supported cuts in the corporate-tax rate, often under intense lobbying from corporate America. The cuts have been so large — including in President Donald Trump’s 2017 tax overhaul — that at least 55 big companies paid zero federal income taxes last year, according to the Institute on Taxation and Economic Policy. Among them: Archer-Daniels-Midland, Booz Allen Hamilton, FedEx, HP, Interpublic, Nike and Xcel Energy. |
The justification for the tax cuts has often been that the economy as a whole will benefit — that lower corporate taxes would lead to company expansions, more jobs and higher incomes. But it hasn’t worked out that way. Instead, economic growth has been mediocre since the 1970s. And incomes have grown even more slowly than the economy for every group except the wealthy. View grah by clicking HERE. The American economy turns out not to function very well when tax rates on the rich are low and inequality is high. Corporate taxes are wealth taxes |
Corporate taxes are such an important part of the overall taxes paid by the wealthy because much of their holdings tend to be stocks. And as the owners of companies, they are effectively paying corporate taxes. Most of their income doesn’t come through a salary or bonus; it comes from the returns on their wealth. |
“In effect, the only sizable tax for these billionaires is the corporate tax they pay through their firms,” Gabriel Zucman, an economist and tax specialist at the University of California, Berkeley, told me. “The main reason why the U.S. tax system was so progressive before the 1980s is because of heavy taxes on corporate profits.” |
President Biden is now trying to reverse some (but by no means all) of the decline in corporate taxes. His plan would raise the corporate tax rate, punish companies that move profits overseas and introduce a rule meant to prevent companies from paying zero taxes, among other things. The money would help pay for his infrastructure plan. “It’s honest, it’s fair, it’s fiscally responsible, and it pays for what we need,” Biden said at the White House yesterday. |
Experts and critics are already raising legitimate questions about his plan, and there will clearly be a debate about it. Biden said he was open to compromises and other ideas. |
But one part of the criticism is pretty clearly inconsistent with the facts: The long-term decline in corporate taxes doesn’t seem to have provided much of a benefit for most American families. |
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