Wednesday, May 22, 2013

As the old saying goes, "The real scandal... Washington isn’t what’s illegal -- the real scandal is what’s legal.”

According to Apple CEO Timothy Cook (above):

“It’s important to tell our story, and I’d like people to hear directly from me,” he told Mr. McCain and the other senators.

Apple, he testified, pays “all the taxes we owe — every single dollar.” 

And, as crazy as that sounds, I'm sure he's right.

According to Citizens for Tax Justice and the Institute on Taxation and Economic Policy (my emphasis): 

...a major study of the federal income taxes paid, or not paid, by 280 Fortune 500 corporations found, among other things, that 30 of the companies paid no net federal income tax from 2008 through 2010. New information for 2011 shows that almost all these 30 companies have maintained their tax dodging ways.

In fact, all but four of the 30 companies remained in the no-federal-income-tax category over the 2008-11 period.

In response to all this, liberal writer Matthew Yglesias writes 
here and here that the corporate income tax should just be scrapped altogether:

Rather than trying to mend the tax, we ought to end it and replace it with something else. My preference would be to structure its replacement to ensure that the costs are born by  
rich executives and wealthy shareholders rather than middle-class workers. That suggests curbing the current tax preference for dividend income over labor income. That way corporate profits that are paid out to firm owners would end 
up being taxed about as much as they are today, but profits reinvested in hiring new workers and expanded capacity wouldn’t be. Or if the concern is that too much of the benefits 
of a corporate income tax cut would accrue to highly paid executives, we could raise the payroll tax cap so highly compensated workers would pay more. A conservative might prefer to replace the corporate income tax with cuts to 
Medicaid or the EITC to make low-income families pay. The whole range of options is worth debating. But the goal 
should be to replace the mystery meat of the 
corporate income tax with a clear target. Pick who or what we want to tax, and tax it deliberately. 

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