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U.S. Corporate Tax Rate Plunges To 40 Year Low Of 12.1 Percent
By Pat Garofalo on Feb 3, 2012 at 11:20 am
In recent decades, corporate tax revenue has plunged, falling from about 6 percent of gross domestic product in the 1950′s to less than 2 percent today, due to a proliferation of corporate tax breaks and the use of offshore tax havens. According to the Congressional Budget Office, in fact, corporate tax receipts as a share of corporate profits have hit their lowest point in 40 years:
Corporate tax receipts as a share of profits are at their lowest level in at least 40 years.
Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That’s the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008.
Even the 25.6 percent share of profits that went to corporate taxes over the last quarter century comes in below the top statutory corporate tax rate of 35 percent. Meanwhile, corporate profits are currently at a 60 year high, rebounding back to above where they were before the Great Recession hit.
At the same time that corporations are pulling in huge amounts of money, workers are seeing their wages shrink. Last year, real wages fell by 2 percent, and “many employees are also working longer hours and getting more done without raises or overtime pay.” “Part of the reason why business profits are so high is it is a zero-sum game, so labor is on the losing end of that,” said Aaron Smith, senior economist at Moody’s Analytics. “Businesses are getting more out of each worker they have.”
raybond
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Romney says corpotations are people to maybe he thinks corporations should be taxed like people?
The Bigfoot
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That's always been a fools argument to my mind. If Corps are people then who would choose to incorporate when they could just be a sole proprietorship or a partnership?
You want the special privileges and protections granted to the corporate structure you pay the corp rate before income distributions. Got nothing to do with the people behind it.
It's called wanting your cake and eating it too.
CashCowMoo
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Why do you all think corporations are so awful? What should we replace them with?
glassman
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quote:Originally posted by CashCowMoo: Why do you all think corporations are so awful? What should we replace them with?
do you beleive in personal accountability or not?
becuase the only real reason to incorporate is to avoid personal accountability.
how many people go to jail for corporate crimes? almost none.
not none, granted but almost...
when a person commits fraud under the umbrella of corporate protection they almost always get away with just fine, and the fines are often not collected, or even for less than the profits associated with the fraud.
heck, that's the main reason people do incorporate.
why are you so anti-union? the unions serve the exact same purpose to workers as corporations do to investors. exact.
raybond
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Warren Buffett: ‘It Is A Myth’ That U.S. Corporate Taxes Are High
By Pat Garofalo on Feb 27, 2012 at 9:30 am
2012 GOP presidential hopeful Rick Santorum took to the pages of the Wall Street Journal today to lay out his economic plan, reiterating his desire to cut the corporate tax rate in order to “restore America’s competitiveness.” During an interview on CNBC, billionaire investor Warren Buffett, in response to Santorum’s piece, noted that is is actually “a myth” that America’s corporate taxes are high. “Corporate taxes are not strangling American competitiveness,” Buffett explained, even bringing a chart to prove his point:
The interesting thing about the corporate rate is that corporate profits, as a percentage of GDP last year were the highest or just about the highest in the last 50 years. They were ten and a fraction percent of GDP. That’s higher than we’ve seen in 50 years. The corporate taxes as a percentage of GDP were 1.2 percent, $180 billion. That’s just about the lowest we’ve seen. So our corporate tax rate last year, effectively, in terms of taxes paid for the United States, was around 12 percent, which is well below those existing in most of the industrialized countries around the world. So it is a myth that American corporations are paying 35 percent or anything like it…Corporate taxes are not strangling American competitiveness.
Buffett is absolutely right to note that while corporate profits are at a record high, corporate taxes are at a nearly half-century low. When looking at the rate that corporations actually pay (as opposed to the statutory rate that only exists on paper), the U.S. has the second-lowest corporate tax rate in the developed world, and raises far less than other nations in corporate tax revenue.
During the interview, Buffett also responded to Gov. Chris Christie’s pronouncement that Buffett should just “write a check and shut up,” instead of calling for higher taxes on the rich. “It’s sort of a touching response to a $1.2 trillion deficit isn’t it? That somehow the American people will just all send in checks and that’ll take care of it,” Buffett said.
glassman
posted the U.S. has the second-lowest corporate tax rate in the developed world, and raises far less than other nations in corporate tax revenue.
that is based on percentage of GDP..
we have too many loopholes in our tax code that were written by lobbyists for their employers and added itno bills for favors.
we need to just get rid of deductions (all of them) and charge a low fair tax rate
The Bigfoot
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I distrust lies, ccm.
Where you find lies you find corruption, influence peddling, intimidation, and protectionism.
I distrust massive accumulation. Accumulations of power and assets that step well outside the bounds of the norm change most systems and people from being growth centered (ie focused on self) to being focused on retention (ie focused on removing any other that threatens to step into their territory). Being growth centered is American capitalism at its best and is good for the country as a whole. Being retention centered is little more than despotism.
I do not dislike the corporate structure but I have a healthy distrust of any person or group who lies to me for personal advantage. Especially those with massive accumulations to draw from.
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