Could it be that we're starting to wake up to the inequities in our income tax laws?
The Donald Trump "tax reform" law passed in December 2017 was supposed to eliminate the unfairness that had become so commonplace in recent years. Ordinary Americans can't escape paying taxes, but wealthy individuals and mega-corporations get by with paying little or nothing.
The 2017 law dramatically lowered the corporate tax rate, but we were promised in return that the lower rates would end the practice of stashing money overseas, and companies would now at least pay their share of U.S. taxes — albeit it at a lower rate. Something is better than nothing, we were told.
It's now apparent, however, that the new law has made things worse when it comes to the U.S. collecting corporate taxes.
According to recent accounting, the list of those paying zero roughly doubled during the first full year of Trump's new law, which not only lowered the tax rate from 35 to 21 percent, but actually expanded the loopholes which allowed them to escape taxes all together. In fact, several not only didn't pay taxes on multi-billion-dollar profits, but also received rebates.
Leading this category was the hugely successful Amazon, now the country's largest retailer. Amazon reported profits of $10 billion in 2018, paid no federal taxes, plus collected a small rebate.
Filling out the top five list of tax avoiders were Delta Air Lines with $5 billion in profits, Chevron, General Motors and EOG Resources, all of which made between $4 billion and $5 billion during the 2018 tax year.
The claims that the "tax reform" would convince corporations to bring back the profits they had stored in low-tax countries haven't worked out nearly as well as hoped, either. Much of that off-shore money was supposed to go to workers' wages and benefits, but a significant portion has been used to buy back corporate stock from shareholders.
So it's no wonder that the U.S. Treasury has experienced a significant drop in revenues and the national debt is skyrocketing, all the while the nation's economy is booming. Some economists shudder to think what this means to the economic health of the country in years down the road.
The New York Times reported last week that the continued tax inequity issue is beginning to resonate with many working people, especially since the large field of Democratic candidates is beginning to include the issue, along with health care and immigration, in appearances around the country.
General Motors is a favorite target. While workers are losing jobs thanks to the corporation's decision to close several plants, GM paid zero taxes on $4.32 billion in income.
"What was promised to these people were more jobs," said the president of the United Auto Workers union at beleaguered Lordstown, Ohio, where the city has been devastated by GM's closing of the plant that made the Chevy Cruze.
"When you give them a tax break and they take the jobs away, that's like a double whammy. That's a lose-lose," David Green told the Times.
Meanwhile, the Times' story pointed out, Democratic candidates like Bernie Sanders, Elizabeth Warren and Amy Klobuchar have offered versions of corporate tax reform they would push if elected.
Warren, for instance, wants a new system that would tax corporations 7 percent on every dollar over $100 million in profits they earn anywhere in the world. She says that under her plan, Amazon would have paid $698 million in taxes last year rather than getting by with nothing.
Sanders, of course, has long pushed for a new way to capture corporate taxes, including on money stashed overseas. Klobuchar would hike Trump's 21 percent back to 25 percent and use the extra revenue to help pay for bridges, roads and airports that are sorely in need of updating.
What more and more citizens are beginning to realize is that allowing corporate America to escape paying taxes to help pay for the government services they routinely receive is not a sustainable plan. Individual taxpayers can't be expected to carry the load, nor can future generations shoulder an ever-increasing national debt.
But they can't expect a different result if they pick a president who only a few days ago admitted to escaping taxes for several years while losing a billion dollars, but described it all as a "sport."
A sport, perhaps, for the rich, not for the rest of us.
Dave Zweifel is editor emeritus of The Capital Times. firstname.lastname@example.org, 608-252-6410 and on Twitter @DaveZweifel.
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