After writing my previous post I watched UPw/Steve Kornacki onMSNBC Sunday and he had his own response to the Apple hearing. Perhaps that last post was already more than you want to know about reforming corporate taxes, but those who find the topic interesting should find Kornacki’s panel discussion worthwhile to watch here. Scroll down the clips shown toward the left to find it.
For those who don’t want to bother, here are a few points made that add to or enhance what I wrote. As it turns out, Matthew Yglesias, who I mentioned in my post, was on this panel and he made the case again for changing the focus away from additional corporate taxes and on to individuals, such as corporate executives and shareholders. For one thing, individuals cannot so easily pretend to be “based” in Ireland.
Adding perspective, Ylan Mui of the Washington Post pointed out that the government takes in far more money from individual taxes than corporate ones (about one trillion from the former to about 240 billion from the latter in 2012).
While Yglesias is a liberal, his idea is not the common liberal position which is to just charge corporations higher taxes, with the Congressional Progressive Caucus wanting taxes on all corporate profits made overseas the same as income earned here.
In contrast, the conservative position, as indicated in the previous post, is to reduce taxes on corporate earnings abroad to entice their return here as opposed to making a home in Ireland or wherever.
Steve Kornacki suggested President Obama’s position includes lowering taxes on foreign earned money in exchange for closing some corporate loopholes. Obviously, there are various ways to mix and match reforms. The question is whether any soup will pass a sufficiently collective Congressional taste test.
One problem is what “facts” can be agreed upon as a place to start? The Right always emphasizes our official corporate tax rate (35% to 38% or so) as being the highest in the world, even though the “effective rate” is more like 25% (or judged even less by many liberals). While the Right always points to that official rate, the Left and most journalists covering the topic emphasize the effective rate and that it varies greatly from company to company. As Frank Clemente of Citizens for Tax Justice pointed out on the show, 30 of our largest companies paid no federal income tax between 2008 to 2010 (many of them profiting from a deal made as part of the stimulus plan).
As you can see, this is a tough topic to get a handle on let alone for Congress to do anything about. Still, the House Ways and Means Committee recently came up with a 568 page report on various tax options, and the Apple story along with I. R. S. mismanagement of those tax exemption requests might help keep the embers of possible reform alive.
Having some roots in the usually barren ground of the House of Representatives might help.