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How Progressives Can Win The Corporate Tax Battle

Ryan Shaw |
April 24, 2012 | 2:00 p.m. PDT

Staff Columnist

Exxon Mobile paid an effective tax rate of just 17.6 percent in 2007 after they took advantage of all the deductions and loopholes. (Steve Snodgrass, Creative Commons)
Exxon Mobile paid an effective tax rate of just 17.6 percent in 2007 after they took advantage of all the deductions and loopholes. (Steve Snodgrass, Creative Commons)
The tax brackets in this country only apply to you if you are an average person.  It's meaningless If you are a corporation that can afford an army of lawyers and accounts to take advantage of all the loopholes your friends in Washington cleverly planted into the tax code. 

Progressives can make a strong argument for getting rid of tax loopholes for corporations while appealing to the most powerful interest in the country: the American consumer.      

The Wall Street crowd's temperament toward corporate tax is that it's too high.  In fact, it's the highest in the world at around 39 percent.  What they don't tell you is that many of the large corporations don't actually pay anywhere near that rate.  According to the regularly cited Congressional Budget Office, Exxon Mobile paid an effective tax rate of just 17.6 percent in 2007 after they took advantage of all the deductions and loopholes.  That same year, the average effective rate for individuals was 20.4 percent.  That's 20.4 percent for the rich, poor, and middle class consumer alike.  What the government is effectively saying is that you, the consumer of all income levels, are not as important as the supplier Exxon Mobile.  This is dumb economics and it's what holds us back from having a thriving economy. 
 
Households drive the economy in a Capitalist system.  Without demand there would be no need for a supply.  Without you, the buyer (no matter how much you earn), there would be no supplier.  Without you there would be no Exxon Mobile.  Tell me who is more important to the economy now?  You the consumer is what drives the economy forward, but apparently our politicians don't realize that.  America is all about consumption, so why are our politicians protecting the most profitable suppliers in the world at the expense of consumers?  It's just plain bad economics. 
 
The real tax rate for Exxon should at the very least be the same as what we the consumers have to pay.       
 
If progressives are serious about winning the battle on corporate taxes, they need to get off the rich vs. the poor kick.  It's not a winning battle in today's politics.  Consumer vs. Supplier - now that's a winning battle.  It's a message that can appeal to all households of any income level.  That's essentially all of America.  We need to make this fight about how suppliers are taking advantage of all consumers, aided and abetted by the government's effective corporate tax rates.  We need to get off the moral crusade and start talking in dollars and cents.  We have the better economic message we just have to prove it. 

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