Why Big Corporations Get Special Tax Breaks and You Don't
By: Jim Hightower (ArcaMax)
S E E D E D C O N T E N T
Why Big Corporations Get Special Tax Breaks and You Don't
Jim Hightower on Apr 3, 2024
Free market ideologues fabricate some of the most preposterous yarns trying to justify their assertion of corporate greed over public need.
Consider their far-fetched of laissez-fairyland tale that by allowing corporate giants to dodge the billions of tax dollars they owe to our country, the top executives of those corporations will plow that money into new jobs, products and services for the common good. The ideologues assure us innocents that this is the "magic of the marketplace."
But remember: Magicians don't perform magic; they perform illusions. In this case, since the law does not require that such tax windfalls be invested for the public good, they aren't. Instead, the corporate barons simply pocket the money.
A diligent watchdog group, Institute for Policy Studies, recently documented this by analyzing financial data of 35 enormously profitable giants, including Tesla, T-Mobile and Duke Energy. Over a four-year period, these 35 lavished pay of $9.5 billion on their honchos. Even for giants, that's an extravagant payout. Where'd the money come from? Tax dodging. Combined, these outfits paid zero in federal taxes and even extracted nearly $2 billion in refunds.
To rationalize this handout, free market ideologues claim that corporations are just like ordinary taxpayers, merely taking a few legal deductions to lower their tax bill. But, wait -- tax laws aren't handed down on stone tablets, applying equally to everyone. When's the last time Congress asked you to help write one law? Instead, America's tax code is an arcane work of gobbledygook literally written in back rooms by corporate lobbyists -- which is why powerful corporations get special breaks to evade taxes and you don't.
To see through such corporate scams and help end this corruption, connect with the Institute for Policy Studies: ips-dc.org.
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Did they do anything illegal? Maybe you should take YOUR money and start a multi million/billion dollar company and you can decline all the tax deductions and pay on every dollar you make.
Explain this to me...
From the Federal Financial Interventions and Subsidies in Energy in Fiscal Years 2016–2022:
Was I talking to you? How many accounts do you have here?
You do know how these sites work don't you?
Only one and my birthday was last Tue.
Why.....start a company decline all the tax breaks, I assume you don't take any deductions on your taxes.
Under what economic system would such a law exist?
Social democracy (as seen often in Europe). Basically a highly regulated version of capitalism.
Oh yes,
After World War II , social democratic parties came to power in several nations of western Europe—e.g., West Germany , Sweden, and Great Britain (in the Labour Party )—and laid the foundations for modern European social welfare programs. With its ascendancy, social democracy changed gradually, most notably in West Germany. These changes generally reflected a moderation of the 19th-century socialist doctrine of wholesale nationalization of business and industry. Although the principles of the various social democratic parties began to diverge somewhat, certain common fundamental principles emerged. In addition to abandoning violence and revolution as tools of social change , social democracy took a stand in opposition to totalitarianism. The Marxist view of democracy as a “bourgeois” facade for class rule was abandoned, and democracy was proclaimed essential for socialist ideals. Increasingly, social democracy adopted the goal of state regulation of business and industry as sufficient to further economic growth and equitable income.
Social democracy | Definition, Principles & History | Britannica
Epilogue:
Our findings suggest that most of the fall in support for social democratic parties in recent years is correlated with a decline in the number of industrial workers as well as a reduction in the propensity of social democratic parties’ core supporters (industrial workers and public-sector employees ) to vote for them.
The Rise and Fall of Social Democracy, 1918–2017 | American Political Science Review | Cambridge Core
“What are the lessons then that we’ve learned from the last thirty years? First, that the pursuit of equality itself is a mirage. What’s more desirable and more practicable than the pursuit of equality is the pursuit of equality of opportunity. And opportunity means nothing unless it includes the right to be unequal and the freedom to be different. One of the reasons that we value individuals is not because they’re all the same, but because they’re all different. I believe you have a saying in the Middle West: ‘Don’t cut down the tall poppies. Let them rather grow tall.’ I would say, let our children grow tall and some taller than others if they have the ability in them to do so. Because we must build a society in which each citizen can develop his full potential, both for his own benefit and for the community as a whole, a society in which originality, skill, energy and thrift are rewarded, in which we encourage rather than restrict the variety and richness of human nature.”
Margaret Thatcher on Socialism: 20 of Her Best Quotes (fee.org)
I guess it is our turn to learn the lesson.
Since you quoted Thatcher: The pursuit of equality is pointless. It cannot be done and is highly counterproductive anyway. Do you think European social democracy seeks to make all people equal? If so, it certainly is not achieving that effect in Europe.
The rest of her quote is spot on, IMO. And it describes (in principle) what we see here and in Europe.
As for your Britannica definition of social democracy, do you think that it in any way contradicts what I wrote? I stated:
Is there a point you wish to make?
Arranging business financial decisions to AVOID as much tax liability as possible is a practical, sound and LEGAL business practice.
EVADING taxes is ILLEGAL, and the IRS would be all over their corporate asses if this was true.
But you already know all this anyway.
Individual income tax have "special" breaks in two primary categories:
Potential tax claims:
Potential tax deductions:
The national tax collection runs about a third of the GDP. The Federal political government has developed a nasty habit of imposing unfunded programs onto the country that requires state and local tax authorities to collect higher taxes.
Here's a source of estimates (or guesstimates as the site calls them) for governmental revenue collections (taxes). Keep in mind that the current US GDP is estimated at $28 trillion and this site estimates $10 trillion in tax collections.
You don't-- unless of course you are a part owner of the company.
BTW that's what owning a stock means-- you are a part owner of the company (although you don't have to put in the work that the companies workers and managers do
)
Well, that depends on how businesses avoid tax liabilities. Coercing government using threats to obtain sweetheart tax cuts is not a legitimate way to avoid tax liability. (That's how organized crime does things.)
If these 35 corps lavished $9.5 billion on their honchos then the honchos should be taxed. But the honchos are protected from paying Federal taxes by SALT deductions. Even these corps are allowed to deduct state and local taxes from the Federal tax bill. High tax blue states ain't gonna share with the Federal government.
There are a number of taxes and fees collected by an alphabet soup of government authorities. The Federal tax code is not the end-all, be-all of collecting taxes.
We've heard these same arguments since before the Cold War ended. And taxes have definitely increased over the last 40 odd years when all the taxes at all levels of government are tallied together. But these liberal magicians try to trick the public by hiding that truth.
How are these liberals gonna spend all that tax money they're planning to collect? F-16s for Ukraine? Bomb shelters for Gaza? Plane tickets for illegal immigrants? Maybe the problem ain't too little taxes. Maybe the problem is taxes being wasted on liberal priorities.
So if anyone thinks its unfair-- that big corporations get all these tax breaks and make all that money-- there is a solution. One that allows you to share in the wealth. And its simple: save your $$$ and buy stock in the companies!
Then they do the hard work for you-- they spend lots of time and money designing a product and/or service they sell, and they put in the work to run the business.
And you collect the dividends!
John
First let me say that I think you and I are in agreement that big corporations and rich people should be paying more taxes, but I think it is a very complicated process that needs to be done in stages, But it needs to be begun quickly.
Some tax windfalls are good things - for the corporation receiving it obviously, but if that windfall ends up creating new jobs, reviving the economy of a economically downtrodden area or some other benefit to society in general then it is a good thing.
Would you agree with that?
I think a generalization that all corporations fail to follow through on promises made when tax breaks are given is a bit too broad. Would you agree with th
Trickle down economics in a nutshell:
"the rich get richer."
The end.
A bit of an over-generalization IMO. Sure, that's true in many cases. But there are many cases of wealthy people losing their fortunes.
Also wealthy families dividing up their fortunes equally amongst their kids who inherit it when the parents die.
And some kids end up wealthy-- some just barely getting by.
And then there's "the other side of the story"> Yes, the richer get richer-- but there are also people born into poverty who end up wealthy.
No, not a generalization as regards to supply side "Trick Down" voodoo economics which systematically lowered the tax burden of the wealthy in the false belief the very rich wou be inclined to pass on a big share of their ever increasing wealth. And now, over forty five years of experience has put a lie to that false "Theory"!
Actually I'm familiar with all that. (In fact decades ago I was quite the political activist...). And I still think there's a need for political activists.
But now, at least for myself, I look at these things a bit differently. This expresses it (or at least part of it):
Grant to us the serenity of mind to accept that which cannot be changed, courage to change that which can be changed, and wisdom to know the one from the other
IMO the odds are that "Trickle Down Economics"...etc... will be around for a while-- maybe for ever? So if that's the case-- how should I best choose to live my life?
Not sure you totally understand what Supply Side Economics - Biden does because he employs in his dealings with renewable energy related corporations, electric vehicle corporations etc etc. He gives them tax breaks (and the states do too) to encourage to build plants here and there and create jobs.
If supply side economics is a good thing for a Democrat administration, why is it a bad thing for a Republican administration just wondering.
FYI
What Is Supply-Side Economics?
Supply-side economics is a theory that maintains that increasing the supply of goods and services is the engine of economic growth. Additionally, it advocates tax cuts as a way to encourage job creation, business expansion, and entrepreneurial activity.
Supply-side economics is sometimes known as Reaganomics for its association with President Ronald Reagan. He and his Republican contemporaries popularized the controversial idea that tax cuts for wealthy investors and businesses give them incentives to save and invest, producing economic benefits that trickle down into the overall economy.
Reagan often quoted the aphorism "a rising tide lifts all boats" to explain his take on the theory.
Supply-Side Economics: What You Need to Know (investopedia.com)
Paul Harvey would call that the rest of the story, I think.
Biden never advocated for cutting taxes on the wealthy individual or corporations, except maybe as a temporary stimulus for a specific industry?
He voted for the Reagan tax cuts.
That is exactly what he did in the industries I mentioned and others to support his agenda and as "payback" to groups that supported him
Wasn't there recently a study that concluded trickle down[your leg] economics does NOT trickle far enough said.
I don't know was there? Please provide a link to the source
People who express there views with campy political campaign memes, seldom really have much to say about the actual issues being discussed. jmo
Mostly campaign rhetoric without details of what has improved and what is "a work in progress"
If a corporation receives a "tax break" (size and shape is immaterial) and opens a Deluxe Widget Factory in a town in middle America (exact location is immaterial) and hires local workers to make the Deluxe Widgets, depends on local small businesses to provide materials needed to make the Deluxe Widgets (creating jobs), contracts a company to ship in raw materials and take widgets to markets (creating jobs) and a result local businesses such as supermarkets, gas stations, restaurants see increased business (and create new jobs) and the tax base for area municipalities increase (improving schools and social services) .......
Is that a positive example of Trickle Down Economics?
Just wondering