“The Carnival Corporation wouldn’t have much of a business without help from various branches of the government. The United States Coast Guard keeps the seas safe for Carnival’s cruise ships. Customs officers make it possible for Carnival cruises to travel to other countries. State and local governments have built roads and bridges leading up to the ports where Carnival’s ships dock.
“But Carnival’s biggest government benefit of all may be the price it pays for many of those services. Over the last five years, the company has paid total corporate taxes — federal, state, local and foreign — equal to only 1.1 percent of its cumulative $11.3 billion in profits. Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes.” — David Leonhardt in the New York Times
Though the corporate tax rate is 35 percent, 115 of the 500 companies in the Standard & Poor’s index paid total corporate taxes of less than 20 percent over the last five years. Consider that:
- Boeing paid a tax rate of just 4.5 percent;
- Southwest Airlines paid 6.3 percent;
- Yahoo paid 7 percent;
- Prudential Financial, 7.6 percent; and
- General Electric, 14.3 percent.
Surprisingly, those paying more than the average were Exxon Mobil, FedEx, Goldman Sachs, JPMorgan Chase, Starbucks, Wal-Mart and Walt Disney.
The Business Roundtable and the Chamber of Commerce support corporate tax reform. But that only means they favor a reduction in the tax rate. The groups refuse to say whether they also favor a reduction of loopholes but, of course, we know that they won’t.
What’s the solution? We need a corporate flat tax that puts all businesses on a level playing field rather than a system that encourages hiding money in off-shore bank accounts, incorporating in foreign countries, shifting income to countries with the lowest tax rates, and other less-than-honest practices– all of which allow the biggest corporations in the US to avoid paying their fare share of a burden all businesses should bear equally.
Where do we begin? There is so much that needs basic changes, not only in the States but nearly everywhere else in this world too. Still, if one gvt is in search of money I feel that the “easiest” way to create additional “income” is to go and get what is due from the taxpayer, and I mean the major “players” in the field, not the man in the street (he probably pays more than what he ought to pay already because those who make the biggest income don’t pay the tax rate they’re supposed to). There is a limit to what the man in the street is able to be taxed and I don’t see why we should get increased tax to pay for those companies that evade their responsibilities. To go & get the money where it is owed would cost less than pass new laws to introduce new tax systems.