Debunking another GOP myth: The U.S. already has low corporate taxes (and corporations still don’t pay the taxes they owe)

Posted by AzBlueMeanie:

During negotiations over raising the federal debt limit, congressional Republicans have been defending tax loopholes for corporations (corporate welfare subsidies), Paul Ryan Responds To David Brooks: We Won’t Cut Tax Loopholes To Reduce Deficit, Only To Finance More Tax Cuts, asserting that America has a high corporate tax rate that is stifling economic growth and job creation. Contrary To GOP Claims, U.S. Has Second Lowest Corporate Taxes In The Developed World:

[T]he Center for Tax Justice (CTJ) has crunched the most recent data from the Organization for Economic Cooperation and Development (OECD), the Office of Management and Budget, and the Census Bureau, and finds that “the U.S. is already one of the least taxed countries for corporations in the developed world.”

As a share of GDP, the U.S. had the second lowest tax rate, behind only Iceland. This statistic flips on its head the often-repeated Republican charge that America has the second highest corporate tax rate in the world (which is only true on paper). In 2009, U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.

Conservatives love to point out that other OECD countries have lowered their corporate tax rates in recent years, but they conveniently ignore that “these countries have also closed corporate tax loopholes while the U.S. has expanded them.” As CAP Director for Tax and Budget Policy Michael Linden has noted, the U.S. is actually a very low-tax country across the board.

Recently, conservative commentator Bill Kristol chastised his own party for pretending that lowering the corporate tax rate is a cure-all for America’s economic woes. . . “Republicans are making a mistake if they focus on big businesses and corporate tax rates. Corporations have a ton of cash. The corporate tax rate is not killing big business in America.”

Despite this low corporate tax rate, two-thirds of corporations operating in the United Stated paid no income taxes (1998-2005), Most U.S. Corporations Pay No Income Tax – NYTimes.com, and many received a tax refund due to tax credits and tax subsidies (corporate welfare). G.E.’s Strategies Let It Avoid Taxes Altogether – NYTimes.com (March 24, 2011).