Anyone that does some casual research on corporate tax rates quickly finds that the United States has the highest published corporate tax rates, by percentage, in the world. Not only do we have the highest rates, but we also tax corporate profits made offshore, which contributes to many multi-national corporations leaving their earnings offshore.
The illusion of high corporate tax rates and tax structure drives the corporatists crazy and is constantly a major point of contention concerning business growth, domestically and internationally. However, if information is placed in the proper context, the U.S. ranks fifth, in percentage, from the bottom for revenues generated by corporate taxes when compared to other OECD nations. (2011, Office of Management and Budget) The figures for 2011 percentage, when exemptions, deductions, incentives and credits are figured in, are about $1.0 trillion of the $2.2 trillion generated in total income tax revenues. This is a mere pittance when compared to the benefits that corporations receive.
The greatest benefit to native corporations is the United States over muscled and dominate military. Beginning with the Teddy Roosevelt Administration, it was understood that if the United States was going to participate in the rapidly growing global marketplace, that it would require a massive build up of capital line ships and naval forces. This was strongly promoted by “big business” as a means to protect national interests. A note: national interests are synonymous with business interests. Hence the well used phrase; “the business of government is business”.
The first fifteen years of the 20th century found the United States building up naval forces, occupying foreign territory; Philippines, Hawaii, Guam, Panama, just to name a few. The road to American Imperialism and world dominance had begun. World War I found the U.S. on the winning side and an open door to American growth and development.
The Great Depression provided a temporary setback, but American business remained intact, even though much diminished. The late 1930s found the U.S. in a prime position to build up industrial production, but to remain, figuratively speaking, insulated from the possibility and direct involvement with the coming war. The U.S. was the only major player prepared to directly benefit from such a war. By war’s end, even though the U.S. was dragged into the conflict by Japan, was the only industrial economy left intact.
U.S. business was prepared to rebuild the shattered nations and economies and it wasn’t by accident that the WW II military was left mostly intact. The Marshall Plan, although dressed as humanitarian relief, was also responsible to assure American business interests with the occupying forces as a foundation to maintain order.
The paranoid and dangerous Joseph Stalin set the agenda for the next 50 years, threatening the stability and well being of the capitalist west. With the Soviet Union armed to the teeth and arming every group willing to take up arms against capitalist interests, whether pursuing nationalism or Marxist ideology, it provided motivation for the United States to maintain and expand its marshal forces and become covertly involved all over the globe. However, the U.S. did not only protect its vital national interests (business) through efforts of it’s dominate military forces, but also assured dominance in vital governing authorities.
The United States dominance led to leadership roles in the United Nations, International Monetary Fund, NATO, World Bank, and a number of other governing bodies. To promote trade for U.S. export business, the government formed the Export-Import Bank of the United States (Ex-Im Bank) in 1934 by Presidential Executive Order. In 1945, congress passed the necessary legislation to make it a permanent organization and it joined other OECDs in an agreement to regulate a level playing field, giving no one nation an advantage in financing. By 1968 it became a permanent charter that is renewed by congress every five years. The bottom line is that the U.S. based corporation receives immense benefits from the government and pays next to nothing for those benefits.
Total government spending has risen to an estimated 22 percent of 2012 GDP or $6.3 trillion, raising the alarm bells and calls for significant reductions in government spending. Of the total spending, the U.S. military accounts for nearly $1 trillion on its own and its chief beneficiary, corporations don’t pay enough in income taxes to even provide for the cost of the military expenditure, let alone other benefits gained from governments. (Sources: CIA National Status Report, GAO, and CBO) Any way one views it, corporations are getting a good deal, since the average citizen doesn’t receive a direct benefit as does business and is paying the majority of the cost.
How does it help the average citizen for the U.S. government to deploy an Aircraft Carrier Battle Group off another nation’s coast just to remind them that the U.S. is capable of backing up their national interests with an unrivaled force? In short, it doesn’t.
It’s time to stop whinin' about corporate income taxes and realize the bargain that corporations are getting and that the rest of society is paying for. If anything, it is time to force corporations to pay their fair share and if nothing else to cover the cost of the military.