The latest TIME documents the reasons why — despite a nominal federal corporate tax rate of 35 percent — “corporations paid just 12.1 percent of their domestic income in federal taxes in Washington’s most recent fiscal year.”
Companies are supposed to be taxed at 35%. Why are they paying so little?
In part to stimulate the economy. Uncle Sam gave companies the right to write off 100% of the purchase price of new equipment in 2010 and 2011. That has direct benefits of spurring investment and creating jobs.
The rate also reflects firms’ deft use of loopholes. The portion of federal taxes paid by corporations has been shrinking for decades. In 1943 it was nearly 40%, a high-water mark. In 2010, corporations accounted for 9% of the nation’s tax bill.
According to tax attorney Howard Barnet, multinational corporations have more tax-avoidance tools than ever.
Roy Cordato would like to see the effective corporate tax rate fall even lower … to zero.
