The Corporations that are Robbing your Children - Page 2
Is your head spinning yet? To put it in perspective, just these twenty five companies alone increased the federal deficit by over $24 billion. At those rates, they will increase the Federal debt by almost half a trillion dollars by the time your one-year-old turns 20. Mad yet?
How could they have managed this? Well, during the same year, last year, they also spent $21.5 million in campaign contributions, and another $129 million on lobbyists. It turns out that’s a pretty good investment. Put simply, $150 million in political spending earned $24 billion in extra profits. That’s the highest profit margin of any product any of them offered. Buying politicians is more profitable than making things, selling things, or creating things. Sheesh.
After a dalliance and retreat during the Reagan era, the deliberate under-taxing of corporations began in earnest in 2000 (see the chart from the IPS report below.) So using todays numbers (an admittedly rough calculation) this small group of 25 corporations have—by themselves—contributed over $256 billion to the national debt. They’ve underpaid their taxes by well over one quarter of a trillion dollars.
But this is just the tip of the iceberg. There are another 27.5 million corporations in the United States. Two thousand of them are really big. If the big 2,000 used similar tricks, they’ve increased the debt by over half a trillion dollars since 2000. Obviously, the entire federal debt isn’t from corporate under-taxing, but half a trillion certainly ain’t chump-change.
Fixing all of this won’t be easy. There is little chance that Congress—especially this Congress—will honestly eliminate these hundreds of loopholes. And nothing is likely to happen in an election year.
But comprehensive tax reform is required. For starters, we need an alternative minimum tax for corporations—a percentage of profits that they will contribute to the nation despite whatever loopholes they’ve been able to buy for themselves. Fifteen percent of pre-tax profits would be a good start. Barring that, maybe we ought to establish an alternative minimum tax based on a multiplier of CEO salary (including benefits, deferred compensation and stock options.) Four or five times that amount sounds about right. Actually, it sounds like the very least they can do.