35% - Nominal corporate income tax rate
12% - What companies actually paid in fiscal 2011
"Much of the tax debate has been about whether the 1% pay their fair share. But corporations paid just 12.1% of their domestic income in federal taxes in Washington's most recent fiscal year - the lowest rate in at least 40 years. Companies are supposed to be taxed at 35%. Why are they paying so little?
In part to stimulate the economy. Uncle Sam gave companies the right to write off 100% of the purchase price of new equipment in 2010 and 2011. That has direct benefits of spurring investment and creating jobs.
The rate also reflects firms' deft use of loopholes. The portion of federal taxes paid by corporations has been shrinking for decades. In 1943 it was nearly 40%, a high-water mark. In 2012, corporations accounted for 9% of the nation's tax bill.
According to tax attorney Howard Barnet, multinational corporations have more tax-avoidance tools than ever. One proposed solution is to eliminate corporate taxes and instead boost the tax rate on dividends and capital gains, now 15%. Profits would flow to shareholders, who can't dodge taxes as easily. Says Barnet: 'It's just a few sucker companies out there that pay the full corporate tax rate.' The rest of us pay for it."
I thought this article was interesting and really related to what we have been discussing in class.
Very informative and good to know. I agree we need to stimulate the economy but the big corporations need to pay their fair share
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