With income inequality in the U.S. at its highest level since the Great Depression, Americans from every end of the income spectrum are clamoring for corporations and the wealthy to pay their fair share in taxes. But because of the numerous tax loopholes and credits worked into the tax code, corporate taxes are at historical lows.
Bank of America paid nothing in federal taxes in 2009. While earning billions in profit, companies like Boeing, Exxon-Mobil, and Wells Fargo also paid nothing in recent years. Other corporations, like Google and Pfizer, dramatically lower their tax rates by deferring profits they make overseas. After making more than $14 billion in profits last year, General Electric not only got a pass on paying any corporate income taxes, but actually received a tax benefit of $3.2 billion.
Thanks to this propitious tax code, corporations kept $222.7 billion in federal revenue from 2008 to 2010. But the loss of that revenue comes at a cost, a cost being paid by middle class and low-income Americans who are already reeling from a sluggish economy — most notably, students. According to a new report from the National Education Association, $9.8 billion of the lost revenue from corporation would have gone to public schools and colleges over the same period. Those funds would have added over 100,000 jobs in public education and ensured that an extra 400,000 kids living in poverty could enroll in preschool. NEA breaks down that $9.8 billion by the numbers:
– $1,092: The average amount in extra academic support to help 9 million students in poverty catch up to their peers.
– $1,474: The average savings for school districts for each disabled student as a result of greater federal cost sharing.
– $1,276: The average amount in additional financial aid to ensure 7.7 million students in need continue or complete their post-secondary studies.
– 446,655: The number of additional children in poverty enrolled in preschool.
– 126,568: The number of jobs created in the field of education.
With that $9.8 billion, Ohio would have gained 4,363 jobs, Virginia would get 2,794 jobs, Kentucky would have 2,175 jobs, and Arizona would see more 4,094 jobs. Incidentally, these states are also home to Republican leaders in Congress who are singularly dedicated to maintaining this corporate welfare.
As TP Economy editor Pat Garofalo reported, Republican lawmakers continue to aid and abet corporate tax avoidance by protecting offshore profit deferral, which allows corporations to claim domestic tax credits for profits they earn overseas; by proposing to gut the Internal Revenue Service, whose every dollar used to audit tax cheats brings in more than $10 in revenue; by pushing for tax havens in free trade agreements; by enacting repatriation holidays that allow corporations to bring money earned overseas back into the country at a drastically lower rate, even with its negligible effect on job creation; by endorsing taxpayer giveaways like big oil subsidies; and by publicly defending corporate tax dodgers.
Working on behalf of corporations at the expense of American students and families is quickly becoming part of the Republican orthodoxy. This, however, should not be surprising because after all, for Republicans, “corporations are people too.”