DuPont would rather sponsor race cars than pay taxes

ThinkProgress has documented the repeated tax dodging of large corporations, some of which, like GE, have gone entire years without paying taxes despite hauling in massive profits. Now, that phenomenon has spread to the states, where many corporations have largely avoided paying state corporate income taxes despite growing profits. Some companies, like DuPont, avoided state taxes altogether, paying nothing from 2008 to 2010 even as its profits piled up.

But DuPont wasn’t alone. According to a study from Citizens for Tax Justice and the Institute on Taxation and Economic Policy, 68 corporations avoided state taxes entirely for at least one year from 2008 to 2010, costing state governments at least $42.7 billion, as the New York Times reports:

To gauge how much Fortune 500 companies are paying in corporate income taxes, the study looked at the 265 of them that are both profitable and disclose their state tax payments. It found that 68 reported paying no state corporate taxes in at least one year between 2008 and 2010. All together, the study found that the companies reported $1.33 trillion in domestic profits from 2008 to 2010, but paid states only about half of what they would have if they had paid at the average corporate income tax rate of all states — reducing their state taxes by some $42.7 billion.

As the Times notes, the share of state revenues coming from corporate taxes has steadily declined since 1980, from about 10 percent then to less than 6 percent now. And despite Republican rhetoric calling for lower corporate taxes on the national level, America’s rate there remains low as well. Corporations continue to sit on huge amounts of cash without investing in job creation, but GOP politicians and corporate leaders have called for even larger tax giveaways.

Meanwhile, the lost tax revenue would have gone a long way toward plugging budget holes that were instead filled by cutting education, social services, and programs that helped states’ most vulnerable and needy residents.

Earlier this week, 2012 GOP presidential hopeful Mitt Romney threw his support to extending a the payroll tax cut that will expire at the end of the year, joining Newt Gingrich, Rep. Ron Paul (R-TX) and Jon Huntsman amongst the GOP contenders backing it. Given the opportunity to do the same during an interview today on CNN, however, Texas Gov. Rick Perry (R) flat-out rejected extending either that tax cut or soon-to-expure unemployment benefits, which would raise taxes on 113 million households and cut millions of people off of vital unemployment aid:

Q: So you would rather make sure that millionaires don’t pay even a little bit more — one or two percent — next year?

PERRY: What I’m looking for Wolf, is a president that will get this country back working and that temporary tax hike [sic] on that payroll tax is not even close to getting started.

Q: So you would vote against it?

PERRY: Absolutely, I’d vote against it. Get people to work.

Q: What about extending unemployment benefits?

PERRY: No, that is giving incentives for people to be unemployed.

Watch it:

Republicans in the Senate filibustered a Democratic plan that would have extended the payroll tax cut and paid for it by implementing a tiny surtax on income in excess of $1 million. Several economic analysts have found that failure to extend the tax cut would cost the economy hundreds of thousands of jobs next year. Perry is also wrong that extending unemployment benefits is an incentive to remain unemployed. Research from the San Francisco Federal Reserve has shown that those on unemployment benefits stay unemployed less than two weeks longer than those without any access to benefits.

2012 GOP presidential contender Mitt Romney has joined the chorus of Republicans saying that Dodd-Frank, the financial reform law signed by President Obama last year, needs to be repealed. “The extent of regulation in the banking industry has become extraordinarily burdensome following Dodd-Frank,” Romney has said.

One of the key parts of Dodd-Frank is known as resolution authority, which gives the government the ability to dismantle failed financial firms without resorting to the ad hoc bailouts of 2008. Obviously, repealing the law would take away this power, and in an interview with the conservative Washington Examiner, Romney admitted that he doesn’t really have a plan for resolving failed banks that he would replace it with, other than something that looks a lot like the reviled 2008 bailout, TARP:

Q: Do you have provisions, plans to prevent there from being a push for a bailout? Jon Huntsman, for instance, wants to cap the size of banks because he thinks that if they’re big enough, the only advantage they get is an implicit bailout. What do you have as far as bailout prevention measures?

ROMNEY: I can only tell you that I think it’s an enormous mistake for us to bail out individual institutions. And even large institutions can go through a reorganization. It’s been the history of this country that that is the case. What we have assumed as a nation is the risk of a run on the banks, collectively…So our effort has been, and appropriately so, has been to protect the system from a run on the banks. But it is not to protect individual institutions from failure.

Q: And you think that was true of TARP?

ROMNEY: I think the purpose of TARP was to prevent a run on all of the banks. And I mean all of them.

Romney has tried to walk a fine line between his support for TARP in 2008 and the GOP’s current anti-bailout yet anti-financial reform mania. He hasn’t backed down from saying that something like TARP was necessary in 2008, but has since derided TARP as a “slush fund.”

The resolution authority in Dodd-Frank is the opposite of the shotgun approach to which the government was limited in 2008, laying out a process for unwinding a bank and forcing banks to lay out their own “living wills,” detailing their entanglement with the rest of the financial system. Romney wants to take that all away, and he freely admits that he doesn’t want anything to replace it, thus leaving the government in the same exact position in which it found itself in 2008: needing to throw billions at the banks to prevent a complete financial meltdown.

As some Republicans, including Majority Leader Eric Cantor (VA), are growing worried that opposing a payroll tax cut extension will undercut their message as anti-tax zealots, other Republicans have opposed the extension at every turn. Despite their staunch opposition to raising taxes on millionaires, these Republicans have cycled through the reasons to avoid providing a tax cut to the middle class that would allow the average family to pocket an extra $1,000 a year.

The latest argument to emerge from the GOP has been that extending the payroll tax cut would undermine Social Security, since payroll tax revenue goes directly into the Social Security Trust Fund. Multiple Congressional Republicans have adopted that theory of late, including South Carolina Sen. Jim DeMint (R), who put it to use on CNBC last night:

DEMINT: Republicans are always ready to cut taxes, as you know. We don’t think it’s a good idea to do it by raiding Social Security.

Kentucky Sen. Rand Paul (R) made the same argument on Fox News earlier in the day:

PAUL: Well, you know, Social Security is $6 trillion short of money. So the president is advocating reducing the amount of funding to Social Security when they’re already $6 trillion short. So it doesn’t really make any sense and it really argues that he’s going to bankrupt Social Security even quicker by reducing it’s funding.

Watch a compilation:

That argument, which has been adopted by members of both parties and perpetuated by news outlets like NPR, has one problem: it’s not true. Each of the plans under consideration is fully paid for, replacing revenue the Social Security Trust Fund would have lost from lower payroll tax receipts with money made up from either alternative revenue sources or spending cuts. The earlier payroll tax holiday, set to expire this month, was also fully-funded, and the program has thus far “been held harmless” from the holiday, as Reuters noted today.

And while the opposition from Republicans may seem like an impassioned defense of a vital and popular program, a look at their history with the program shows it is not. DeMint has supported privatizing the program while Paul is a proponent of means testing — “solutions” that are both bad policy and unnecessary. Despite Paul’s $6 trillion assertion, Social Security actually has a $2.6 trillion surplus and is solvent through at least 2037.

And if Republicans truly want to use the payroll tax to shore up its long-term viability, there is an easy way to do that. The payroll tax is currently collected only on the first $106,800 in income; raising or eliminating that cap would make the program fully solvent for the next 75 years.

If Republicans have a cogent reason for opposing a tax cut for the middle class that is meant to stimulate the economy, they should provide it, because their current line — that such a tax cut will weaken a program many of them have sought to undermine for years — simply isn’t true.

President Obama yesterday gave a major economic speech in which he took apart the conservative theory of trickle-down economics, the belief that cutting taxes and regulations spurs prosperity at the top of the income scale that then drips down to everyone else. “That theory fits well on a bumper sticker. Here’s the problem: It doesn’t work. It has never worked,” Obama said.

During the speech, Obama reserved specific criticism for the Bush tax cuts, saying that “in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country.” This drew the ire of Washington Post fact-checker Glenn Kessler, who said Obama’s speech contained “significant factual error and/or obvious contradictions” (three “Pinocchios“) because of the statement:

The Bush tax cuts have been roundly criticized for being inefficient and poorly designed, but it is a stretch for Obama to blame slow job growth on the tax cuts. That are many factors that affect job growth, and it is silly to directly link the 10-year-old tax cut to today’s job growth — just as it is silly to claim that Bill Clinton’s tax increases resulted in a gain of 23 million jobs. Obama’s claim of the “slowest job growth,” in fact, includes the loss of jobs under his administration… Finally, Obama blames the Bush tax cuts for “massive deficits.” It is certainly true that the Bush tax cuts helped blow a hole in the budget. But they did not do it all by themselves.

Let’s unpack these one by one. First, Kessler claims that its unfair to say that the Bush tax cuts were for the wealthy. But last year, fully half of the entire benefit from all of the Bush tax cuts flowed to the richest 5 percent of Americans.

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General Electric spent more lobbying the government than it did in federal income taxes between 2008 and 2010.

Today, thousands of 99 Percenters will march on K Street in Washington, D.C. as a part of an action called “Take Back The Capitol,” taking aim at the lobbying firms that corporate interests use to influence the federal government.

A report released this month by Public Campaign demonstrates just how important it is for Americans to battle corporate special interests and reclaim our democracy. The group’s research finds that thirty big corporations actually spent more money lobbying the federal government between 2008 and 2010 than they spent in taxes. For example, General Electric — one of the top 10 most profitable companies in the world — got a net tax rebate of $4.7 billion during this period. Meanwhile, it spent $84 million lobbying the federal government.

Here’s the full list of the 30 corporations identified and what they paid in federal taxes as opposed to lobbying:

To follow today’s actions, check out Take Back The Capitol’s website, and find instant updates about the protest through the hashtag #99indc. ThinkProgress will be covering today’s events at our 99 Percent Movement special topics page.

During an appearance on CNBC last night — the network of choice for those who favor tax cuts for the wealthy, bonuses for bailed out bankers and who think tax dodging is a way to fight “tyranny” — new GOP 2012 presidential frontrunner Newt Gingrich said that it’s because of him that his chief rival, Mitt Romney, was able to amass a fortune of up to $250 million. “You could make an argument that I helped Mitt Romney get to be rich, because I helped pass the legislation” that former President Ronald Reagan wanted in the 1980s, Gingrich claimed. “He should be thanking me”:

I was part of [Sen. Jack] Kemp’s little cabal of supply siders who, I think largely by helping convince Reagan and then working with Reagan, profoundly changed the entire trajectory of the American economy in the 1980s. You could make an argument that I helped Mitt Romney get to be rich, because I helped pass the legislation…He should be thanking me! He should be thanking me because I did the macroeconomic things necessary to make his career possible.

Watch it:

It’s a bit unclear why Gingrich thinks the Reagan economic plan was so wonderful to a private equity executive like Romney, who made his fortune by buying up companies and often restructuring them by firing workers and reneging on benefit promises in order to sell them for a profit later.

Perhaps its Reagan’s tax cuts for those at the top of the income scale that Gingrich believes helped Romney build his fortune. Of course, those tax cuts blew such a hole in the budget that Reagan reneged on some of them later. Reagan actually wound up raising taxes in seven of his eight years in office.

But in a sense, Gingrich is right, in that the Reagan agenda did wonders for the rich while not giving much help to everyone else. As ThinkProgress’ Alex Seitz-Wald noted, “despite the myth that Reagan presided over an era of unmatched economic boom for all Americans, Reagan disproportionately taxed the poor and middle class, [while] the economic growth of the 1980′s did little help them.” A new study from Lane Kenworthy, a professor at the University of Arizona, found that, contrary to the conservative belief, economic growth does not automatically trickle down to lower- and middle-class people.

As President Obama said yesterday regarding trickle down economics: “Here’s the problem: It doesn’t work. It has never worked.” But evidently Gingrich believes it worked for Mitt Romney, and that therefore Romney owes Gingrich a debt of gratitude.