Where Is The Tax Reform?
Well, get out the balloons, streamers, and kazoos. It’s time to celebrate. We finally have an issue before Congress that has bipartisan support. In fact, all issues facing Congress have this same bipartisan support. Both sides of the isle unanimously agree that they should (drum roll) … do nothing.
Whether it is real immigration reform, long term budgets, tax reform, education reform, or anything for that matter, Congress has agreed to do nothing. And with that difficult decision behind them, they head off for a hard-earned, five-week vacation. Meanwhile, the nation continues its decline. Even a once simple long-term measure to fund highway and bridge maintenance was too much for them to handle. Thus, we ended up with a much watered down, short term “solution.”
I am indeed being sarcastic, but it only seems fitting seeing as how Congress has truly made a joke out of themselves and the important job they are paid to do. Sadly, the results are no laughing matter. As they drag their feet, making mole hills of the simplest of national issues, the can is kicked a little further down the road.
From here, I wish to focus solely on one issue: tax reform. Sounds familiar, huh? Conservatives want tax reform. Liberals want tax reform. Americans, in general, want tax reform, but Congress does nothing substantial but kick the can and shut off lines of debate before they even begin.
President Obama, the modern liberal icon, who, according to conservatives wants only to tax and spend, has himself suggested reforming America’s over burdensome tax code, even recommending cutting the top corporate rate to 28 percent. However, he has done little more than suggest such a thing. But, in reality, it is Congress who must take up this issue and take it seriously.
Don’t look for that to happen. Voices from both the left and the right call for lowering the top corporate tax rate, but if and only if it is coupled with the closing of endless loopholes. These loopholes are what allow corporations like GE to pay an effective rate somewhere near 0 percent on their billions of profits. And that, in a nutshell, is why tax reform stands no chance in today’s Congress.
So, even if Congress were to lower the top corporate rate to say 17 percent, bringing it more in line with other industrialized nations, it would have no support from the business community if it also included closing the loopholes. After all, who would want to pay 17 percent with no loopholes, when you can pay closer to 0 percent with the loopholes intact?
When it comes down to it, if the business community wanted a lower tax rate for themselves, they could pay for enough Congressional support through their vast networks of lobbyists and fundraisers to get it. In my humble opinion, they would rather have a high rate that they can virtually ignore using loopholes, tax credits, etc. It’s less painful for them to hold money in overseas accounts, hire teams of lawyers and accountants, take over foreign companies and relocate their corporate headquarters.
So please, the next time you hear a corporate CEO on a political talk show, saying how their biggest reason for not creating jobs is the high tax rate, don’t believe them. It’s a lie. Pundits were out in full force on Fox News this past weekend, falsely claiming that the biggest setback to corporate investment and job creation was the high tax rate. One thing no one bothered mentioning is that when you take a look at effective tax rates, what corporations actually pay, no corporation is actually paying the 35 percent rate that they complain is too high.
Sure, it is too high, but what corporations are paying that much? It’s just more lies and misinformation. Between 2008 and 2012, only 22 percent of some of the largest 288 corporations paid more than 30 percent, meaning a full 78 percent paid less than 30 percent, with 41 percent paying less than 17.5 percent. In the same time period, 26 of America’s largest corporations paid no total income tax for the four-year period. They include: Pepco, General Electric, Duke Energy, and Boeing. Corporations don’t really want tax reform. They are afraid that if we cut corporate tax rates, they might end up actually having to pay their fair share. They’d much rather people like you and me subsidize them.
James Bliss is a Jamestown resident who studied literature and philosophy at Florida State University.