This week, millions of American workers took part in an annual exercise that they loathe to do – sending a check to the federal government paying their taxes. It is a painful, but essential, part of funding services for this nation.
But not all parties are contributing as they should. In fact, a new Government Accounting Office report notes that nearly 20 percent of profitable major U.S. corporations paid no federal taxes in 2012, which is the most recent year for which data is available. This came at the same time when many of these same companies, identified by the GAO as those with more than $10 million in assets, took in record profits.
But even those companies that do pay taxes are paying less now than they have historically. Corporate tax revenue represents only 1.9 percent of gross domestic product today, down from 5.9 percent in 1952, the Economic Policy Institute notes. And while it is good to see the government take some action to tamp down on the practice of corporate inversions, that’s still not enough.
“Unfortunately, corporate inversions are just the tip of the iceberg of corporate tax avoidance,” EPI writes. “The corporate income tax code is riddled with special interest loopholes. For example, businesses can reorganize their legal structure to avoid corporate taxes, and they can defer taxation indefinitely on foreign profits. Congress can and should close these (and other) loopholes.”
At a time when income inequality is a significant societal issue, big business should not be allowed to skirt by making massive earnings but not contributing in return. The U.S. needs more dollars for better roads, bridges, energy and water systems. Those infrastructure improvements, which benefits corporations, cannot and should not be carried by everyday Americans alone.
This country needs everyone to contribute their fair share. That’s how we get more people working and improve this nation for the greater good.