"After Announcing Record Earnings, Disney CEO Claims Corporate Taxes Are Hurting U.S. Companies"
The Walt Disney Corporation today announced its highest quarterly earnings ever today, due to higher prices at its theme parks and the success of several cable channels it owns, including ESPN. This comes after the company made $7.3 billion in profits last year.
But Disney’s CEO, Bob Iger, still appeared on Fox Business today to bemoan the U.S. corporate tax rate, which he said is undermining U.S. competitiveness. Iger falsely called the U.S. “among the highest in the world, if not the highest” and said that America’s corporate tax rate is causing “a loss of jobs.” Watch it:
It’s somewhat commendable that Iger seemed to endorse deficit neutral corporate tax reform, unlike many Republicans who actually want to decrease corporate tax revenue. (Still, corporate tax reform in the U.S. should be revenue positive.)
But Iger spreads a pair of falsehoods about the U.S.’s level of corporate taxation. First, the U.S. may have the highest corporate tax rate on paper, but because of the proliferation of loopholes and credits, its effective rate — which is the rate that corporations actually pay — is the second-lowest in the developed world. While Iger cited the UK as a country with an enviable rate, the U.S. raises far less from its corporate tax:
To put some more perspective on this, U.S. corporate taxes are currently at a 40-year low, while corporate profits hit an all-time high in June. Last year, America’s ten largest corporations paid an average 9 percent corporate income tax rate.
And while Iger bemoaned corporations taking advantage of tax loopholes and credits, as the Orlando Sentinel noted, Disney benefits from a host of tax breaks. It also “maintains a web of subsidiaries in low-tax jurisdictions.”
As billionaire investor Warren Buffett said, “it is a myth that American corporations are paying 35 percent or anything like it…Corporate taxes are not strangling American competitiveness.” But its a convenient story for CEOs to tell to push for a lower tax rate.