President Obama is stumping this week for the Buffett Rule, a measure to ensure millionaires don’t pay tax rates lower than the rest of us.
While the Buffett Rule would be a welcome move in the right direction, we need to go further. It’s clear that top corporations continue to be some of the nation’s craftiest tax dodgers. Meanwhile, the Buffett Rule would only make a dent in the broader problem created by the disastrous Bush tax cuts, which allowed those at the top to accrue massive earnings at the expense of average working Americans.
On the corporate tax front, ThinkProgress reported on an updated study from the Center for Tax Justice showing that 30 big corporations managed to rake in profits while paying nothing in federal income taxes between 2008 and 2010. For the year 2011, 26 of those companies continued to skirt the tax collectors as their coffers swelled.
Some other findings, highlighted by ThinkProgress:
“– 26 of the 30 companies continued to enjoy negative federal income tax rates. That means they still made more money after tax than before tax over the four years!
– Of the remaining four companies, three paid four year effective tax rates of less than 4 percent
(specifically, 0.2%, 2.0% and 3.8%). One company paid a 2008-11 tax rate of 10.9 percent.
– In total, 2008-11 federal income taxes for the 30 companies remained negative, despite $205 billion in pretax U.S. profits. Overall, they enjoyed an average effective federal income tax rate of –3.1 percent over the four years.”
While millions of Americans are struggling to make ends meet, there’s no excuse for the exorbitant gifts lawmakers have handed to corporate CEOs. It’s fundamentally unfair that a big corporation should owe nothing in taxes, just as it’s fundamentally unfair that the Bush tax cuts tipped the balance toward the wealthiest individuals by putting the massive thumb of special interests on the scales.
The editorial board of The New York Times said as much in Wednesday’s newspaper. Their editorial cautions the president and Democratic leaders not to let the Buffett Rule take up all the air in the room.
From the Times editorial:
“Mr. Obama must ensure that the Buffett Rule does not become a substitute for ending those [Bush-era] tax cuts.
“The president is right that income inequality is a serious and growing problem and should be a central issue in this year’s campaign. On Tuesday, he said the big question for Americans is, can ‘we succeed as a nation where a shrinking number of people are doing really, really well, but a growing number are struggling to get by? Or are we better off when everybody gets a fair shot?’
“Unfairness in the tax burden is one important example and driver of that divide.”
The conversation on tax fairness in this country can’t stop at the Buffett Rule -- although it’s certainly a good start. We’ve got to think bigger. Democratic leaders should push for corporations to pay their fair share, and for Congress to let the Bush tax cuts expire, just as was scheduled two years ago.
Progressives United is proud to join with CREDO Action in telling Democratic leaders to step up and address the broader barriers to tax fairness. Sign on to our petition to the Democratic leadership today.
You can also read and download the full report from the Center for Tax Justice here.