With one hand, he giveth a few dollars to the people, and with the other hand, he showers huge corporations with a tax gift that is astounding in its...audacity? That's how I suggest you can look at the president's executive order to pay more workers overtime (a good thing) versus his budget proposal to...pay attention now..CUT corporate tax rates.
While the executive order dealing with overtime will certainly cost businesses more money (and is a good thing), and the business lobby will rant and rave about that requirement, the truth is the balance sheets of corporations will look quite nice and black when flush with the additional...legal robbery of the people, aided and abetted by the president and presumably the Congress.
A big part of this sham is driven by the madness of buying the idiotic, immoral idea (but, seriously, stop sugar-coating it--tell them how you really feel) of "revenue neutrality". Basically, under this version of insanity, any revenue that comes from closing tax loopholes (really bad ones that, for example, allow corporations, in a variety of ways, to essentially shift profits overseas and avoid taxes here), has to be balanced with...tax cuts.
Citizens for Tax Justice, as usual, explains how dumb this is:
Moreover, revenue neutrality is not an acceptable goal. It is simply unfair to not ask large, profitable corporations as a whole to contribute more to fund public investments like education, infrastructure and research that make their profits possible, and which are underfunded today. At a time when cuts have been made to investments like Head Start and medical research because of an alleged fiscal crisis, it is unfair for our leaders to refuse to raise revenue from corporations and other businesses.
The proposed dramatic reduction in the corporate income tax rate seems to be motivated by the common argument that the rate is relatively high and should be lowered to make the U.S. “competitive.” But, as explained below, most American corporations are already paying lower taxes in the U.S. than they pay in other countries where they do business.
More:
The President proposes to limit and repeal corporate tax breaks and loopholes and use all of the revenue savings to “cut the corporate tax rate to 28 percent” from its current level of 35 percent. This refers to the statutory corporate income tax rate, whereas the effective corporate income tax rate (the percentage of profits that corporations actually pay in corporate income taxes) is already much lower. Citizens for Tax Justice recently studied the Fortune 500 corporations that had been profitable in each of the previous five years and found that their effective rate over that period was just 19.4 percent.
The President’s proposal to spend every dime of the revenue saved from ending corporate tax breaks and loopholes on reducing the corporate tax rate seems to be motivated by the argument that the U.S. corporate tax rate is relatively high and therefore should be lowered to make America “competitive.”
But the effective corporate income tax rate paid in the U.S. is often actually lower than the effective rates paid in other countries. The Citizens for Tax Justice study found that two-thirds of the profitable Fortune 500 corporations with significant offshore profits actually paid lower corporate taxes in the U.S. than they paid in the other countries where they did business over that five-year period examined.[emphasis added]
So, the president is saying, "screw the children, screw basic research...corporations need more money".
Now, that would be somehow justifiable, in the weird world of Washington, if corporations were floundering and showing bad balance sheets.
But, the opposite is happening.
I wrote about this previously and here are the key points:
*111 of the companies enjoyed at least one year in which their federal income tax was zero or less.
*26 companies, including Boeing, General Electric, Priceline.com and Verizon, enjoyed negative income tax rates over the entire five-year period, despite combined pre-tax profits of $170 billion.
*Of the 125 multinational companies in this sample, two-thirds paid a lower U.S. tax rate than the rate they paid to foreign governments on their foreign profits. On average, their foreign effective tax rate was 12 percent larger than their U.S. effective rate.
*The total amount of federal income tax subsidies enjoyed by the 288 profitable corporations over the five years was $362 billion. [emphasis added]
And, by the way, the president only has proposed raising enough money to pay for 28 percent of the tax cuts, leaving Congress to find the rest.
Where do you think that money will come from? It's not coming from the the Wall Street bankers whose bonuses just went up 15 percent, the biggest average bonus hike since 2007.
It will be paid for by more cuts in social services. Wanna bet?