Overhaul tax structure
We need a major overhaul of our obscene tax structure. Current efforts are ineffective. There is a political cry to decrease the corporate statutory income tax rate of 35 percent.
A recent report by Citizens for Tax Justice depicts the five-year average effective tax rate for major corporations. Only 12 companies paid a 35 percent rate. Twenty-three companies had a negative tax rate.
Boeing and Verizon for example have a negative rate. AT&T’s average rate was 6 percent, Exxon Mobil was 14 percent and Coca Cola was 13 percent. Remember, this in an average rate for five years.
Corporations use tax havens and other special provisions in the Internal Revenue Code to reduce their taxes. We cannot blame the corporations for taking advantage of these tax gimmicks. Our ire should go to members of Congress and lobbyists who pass and promote these special benefits.
The tax laws should be designed to generate sufficient revenue to pay for enacted appropriations. This is not to say that desirable social and economic goals shouldn’t be encouraged. When they become embedded in ongoing tax provisions, changes are very difficult. If these efforts have to be approved annually by the budget process, it is somewhat easier to remove benefits that are no longer effective.
Of course, recent Supreme Court decisions that give a louder voice to those in affluent positions may negate reasonable debate.