I’m going to get into this more this weekend, but let me make a simple argument here. Lowering the corporate tax rate won’t create any jobs in this country. It is that simple.
It’s been big news lately that GE made a few billion dollars profit in the U.S. last year and yet paid no taxes. This story comes up every year. It turns out that through completely legal tax avoidance, corporations are able to dodge considerable amounts of taxes every year. To put this in perpspective, GE paid no taxes and I paid $783. I would like my Republican friends explain to me why in God’s name we should lower the corporate tax rate.
The argument is always that we have to lower the tax rate to create jobs. This makes no sense. A large corporation doesn’t create jobs in any one particular place because of the tax rate. They do it for the labor costs. If Corporation A can hire workers in Honduras to effectively do a job for $3 a day, they will NEVER hire an American at $7.25/hr. It’s not going to happen. Jobs are created in this country mostly by franchises and small business. These are businesses that cannot afford to hire overseas or it doesn’t make sense. If you open a McDonald’s in Milwaukee you can’t outsource those jobs to Bangladesh, for example.
I also say if corporations want lower taxes, they’ve got to start paying what they are supposed to. Last year the Democratic House tried to pass a bill that did two things. It provided a fund for 9/11 first responders to obtain healthcare and it would have closed loop-holes in the IRS code that allow corporations to avoid taxes. Republican’s decried it as a huge tax increase. I complained about it then, and I’m complaining again. Forcing a business to pay their fair share is not a tax increase. It’s tax enforcement.
During the budget debate we often hear people say something like, “My family has to balance its budget. The federal government should too.” Putting aside the fact that most American families are just as in debt as the government is, I wonder why we don’t hear fiscal hawks (mainly conservatives) saying, “I pay my taxes. Corporations should pay their’s too.”
In a time when we’re trying to balance a budget, doesn’t it make sense to ensure the government is getting the tax revenue it’s supposed to? It turns out this isn’t about the budget. As I’ve said before, Republican’s are trying to eliminate government and the services it provides. House Republican’s have put forth spending cuts that would take $600 million from the IRS. Every expert says if you take $600 million from IRS enforcement, you lose $4-$6 billion in tax revenue. How is that fiscally responsible. It’s not, but it does get the IRS off the backs of the wealthy. It gets the IRS off the backs of Congress so they can avoid taxes. How much longer will it be before we hear another Congressman “forgot” to pay thousands of dollars in taxes on something. We need to get real. Fiscal responsibility is going to require 4 things: reform of Social Security, reform of Medicare, cutting Defense spending, and tax increases targeted at those who can pay more. Until I see Republicans or Democrats or both do those 4 things, I won’t take any of them seriously.