Tax.com: I Thought the ‘Dodgers’ Were a Baseball Team?
media mentionChristopher Bergin | Nov. 3, 2011 11:13 AM EDT
There’s a report that’s getting a lot of attention this morning that concludes that many large U.S. corporations paid little or no corporate income taxes between 2008 and 2010 even though they raked in millions of dollars. The report, prepared by the interest group Citizens for Tax Justice and the Institute on Taxation and Economic Policy, refers to these companies as “tax dodgers.”
According to Webster’s Dictionary (definition 2), a dodger is “a tricky, dishonest person; shifty rascal.” Query: If you minimize your taxes, on behalf of your shareholders, by honestly applying the tax laws as they exist are you really a shifty rascal?
The report says that “the federal tax code ostensibly requires big corporations to pay a 35 percent corporate income tax rate.” No it doesn’t. It applies a maximum marginal tax rate of 35 percent on “so much of a [company’s] taxable income as exceeds $10,000,000” (IRC section 11). None of us pay the highest marginal rate on all the income we earn. Insinuating that corporations don’t pay their fair share unless they pay 35 percent in income taxes on all of what they earn isn’t, well, fair.
I have a lot of respect for CTJ. The folks there put out good stuff. But they always seem to need to go that extra mile with overblown headlines, such as accusing corporations of being shifty rascals. (CTJ is backed by labor unions.)
The real culprits here are the people who create all the tax breaks that corporations would be fools not to take advantage of. The CTJ report is quite correct in pointing out, “The laws were not enacted in a vacuum; they were adopted in response to relentless corporate lobbying, threats and campaign support.”
I would put it another way: Our tax code is for sale. Has been for years. And you and I have collectively elected the sellers.
So who’s really to blame? The ones who take advantage of the laws they lobbied politicians to enact or the ones who sold the rest of us out?