The Artful Dodgers
Key Excerpts from Article on Website of Time Magazine
Posted: September 23rd, 2014
Corporations in the U.S. today are hoarding about $2 trillion in profits overseas, arguing that the U.S. corporate tax rate of 35% makes it too difficult to bring this cash home and invest it herebetter to keep the money abroad and pay lower taxes in other countries. Yet the truth is that legions of tax lawyers make sure that most big American corporations never pay anywhere close to that rate. FORTUNE 500 companies on average pay more like 19.4%, and a third pay less than 10%, chiefly because of all the generous loopholes Congress has afforded corporations over the years. Partly as a result, U.S. firms are enjoying record profit margins, making more money than ever before yet paying a lower share of the overall U.S. tax pie than they have in decades. They want the benefits of U.S. talent and markets but not the responsibilities. Taxpayer-funded, early-stage investments in areas like the Internet, transportation and health care research are the reason many of the largest U.S. companies got so big and successful to begin with. As the academic Mariana Mazzucato argues in her excellent book The Entrepreneurial State: Debunking Public vs. Private Sector Myths, many of the most lauded corporate innovations, including the parts of smartphones that make them smart (Internet, GPS, touchscreen display and voice recognition), came out of state-funded research. Ditto any number of pharmaceutical, biotech and cybersecurity innovations. In so many cases, public investments have become business giveaways, making individuals and their companies rich but providing little return to the economy or the state, says Mazzucato. Tax [dodges] that expatriate the gains of American corporations to enrich a tiny managerial caste symbolize a whole new genre of selfish capitalism.
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