"Gingrich’s Solution To Corporate Tax Dodging: Let Corporations Decide What Rate They Want To Pay"
ThinkProgress filed this report from Pella, Iowa.
As Americans struggle with a sputtering economy and persistently high unemployment, renewed attention is being focused on corporations that avoid paying taxes, leaving taxpayers to cover their unpaid bills. Already, we’ve seen a number of major corporations, many of which brought in huge profits, avoid paying corporate income taxes altogether — from Bank of America to Boeing to General Electric.
Yet corporate tax dodgers have found a willing shield in the Republican Party. From Rep. Jeff Duncan (R-SC) to Sen. Ron Johnson (R-WI) to presidential hopeful Herman Cain, GOPers are lining up to protect corporate interests in the tax code.
The latest corporate defender is former House Speaker Newt Gingrich. During a presidential campaign stop in Pella, Iowa on Monday, Gingrich discussed corporate tax dodgers like General Electric. However, rather than advocating we pursue tax cheats or close down the loopholes that allow them to skirt the corporate income tax, Gingrich proposed an alternative solution: lower the corporate tax rate to a level that corporations would be more willing to pay. Specifically, the former House Speaker called for reducing the corporate income tax rate by nearly two-thirds to 12.5 percent:
GINGRICH: We ought to cut the corporate tax rate down from 35 percent to 12.5 percent. And ironically, for our liberal friends, General Electric would pay a higher tax at 12.5 percent, because at 35 it pays them to hire lots of lawyers to get around all the taxes and they pay virtually no taxes. But at 12.5 they’d fire the lawyers and write a check to the government. So ironically, you’d get more tax, but also you’d liberate about a trillion dollars overseas of money which is currently locked up in profits but they don’t want to bring home and pay high taxes on.
Why stop there? Why not cut the rate to 9 percent, like Rep. Michele Bachmann (R-MN) is posing? Surely there are some corporations who would be more likely to actually pay their corporate income taxes if the rate were 9 percent instead of 12.5 percent?
In all seriousness, Gingrich is espousing a backwards notion of the way government and corporations ought to be interacting. In most people’s view, government is there to act in the people’s best interests by maintaining a level playing field for all people and ensuring that everyone pays their fair share towards society. In Gingrich’s view, government is there to act in the corporations’ best interests by setting corporate tax rates at whatever level CEOs say they’re willing to pay.
To read more about corporate taxes, check out ThinkProgress’ coverage of how the United States has the second lowest corporate taxes in the developed world, six ways in which conservatives encourage and abet corporate tax dodging, and more about which corporations are avoiding their tax bills.