“Elevator, elevator, we got the shaft!”
That was a cheer when my college football team got a bad call. That cheer comes to mind when looking at “tax reform.”
Corporate taxes are in most need of reform. David Frum wrote in the Atlantic this past November that corporate taxes provided a third of revenue for the government in the 1950s; today, it provides hardly more than 10 percent, with payroll taxes providing three times as much.
Worse still, in each year from 2006 to 2012, two-thirds of all active corporations had no tax liability — none, zero. Of the large corporations that reported a profit in their financial statement in 2012, 19.5 percent didn’t pay any taxes. (GAO document 16-353 published 3/16/2016).
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Hardly any corporation paid the 39 percent tax rate that Mitch McConnell and Paul Ryan legislated to reduce to 21 percent.
Lowering the corporate rate while tightening collection — with a view to raising more revenue in a more rational way — has been a good government cause since the late 1980s. I haven’t heard a word about tightening collections. Are we to assume then that even more businesses will have no tax liability, and the ones that do won’t pay at the 21 percent rate?
Don Sebelien, Pasco