The so-called Campaign To Fix The Debt and other organizations backed by Wall Street and powerful corporations are pushing for a debt deal during the lame-duck session that would cut Social Security while lowering corporate taxes.
These corporate proponents claim that lowering the corporate tax rate would spur enormous economic growth that would create revenue that would lower the debt.
But there’s just one problem with that — corporate taxes are already incredibly low. Here’s an article from the Wall Street Journal, no left-wing rag, about how corporate tax receipts as a share of profits have actually hit a 40-year low this year:
U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years. Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That’s the lowest level since at least 1972.
With corporate taxes already hitting record lows, it’s simply unrealistic to claim that lowering the rates even further would spur economic growth and reduce the debt. Rather, it seems like these corporate CEOs are backing a reduction in rates in the debt deal for a simple reason — it would make them money, even if it would rip off taxpayers.
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