Republicans Protect Corporation Tax Loopholes as “Job Creators’

Both political parties are scrambling to come with a deal as the debt ceiling crisis deadline hangs overhead. But even with the frightening consequences of the U.S. Government defaulting, it does not seem to deter the Republicans from protecting corporations from paying higher taxes. The Republican Party insists that a multitude of cuts must be made before a deal can be made on the debt ceiling yet they choose to overlook the elephant in the room.

Democrats have been trying to negotiate raising taxes on corporations and the wealthy in exchange for critical cuts to the budget, but through all the discussion Republicans would rather strip Medicare and Medicaid than touch their golden goose. Republicans have even spun corporations a new name, calling that they will not raise taxes on "job creators." Can you really call a corporation that has gone overseas to avoid paying taxes a ‘job creator’?

Corporations that pay no taxes

Over the last four years 99% of Republicans voted to protect tax breaks for companies who ship American jobs overseas. Republicans have opposed legislation in the past to close tax loopholes that encourage corporations to shift profits offshore. Corporations have been enjoying one lovely hay day because of it. Its called ‘inverted corporations’. Corporations hire accountants to make use of all the loopholes available to them. Accounting gimmicks such as setting up a mail box in another country or moving operations offshore has let many corporations pay zero taxes.

According to the "The New York Times" America’s largest corporation, GE paid no taxes at all in 2010 even though their pre-tax income was more than $14 billion. Over the past five years, General Electric has made $26 billion in profits and has received a $4.1 billion refund from the IRS. They are not alone. In fact two thirds of US corporations pay zero Federal taxes. Exxon Mobil made $19 billion in profits in 2009 but paid no Federal income taxes. In addition, it received a $156 million rebate from the IRS. Bank of America received a $1.9 billion tax refund from the IRS last year even though it made $4.4 billion in profits. Chevron made $10 billion in profits in 2009 and received a $19 million from the IRS. Boeing is another corporation that is enjoying tax loopholes. After receiving a $30 billion contract for the Pentagon to build 179 airborne tankers, it received a $124 million refund from the IRS. Goldman Sachs paid only 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion while receiving almost $800 billion from the Federal Reserve and U.S. Treasury Department. And Citigroup made more than $4 billion in profits but paid no Federal income taxes. Citigroup also received a $2.5 trillion bailout from the Federal Reserve and the U.S.

Corporations are re-incorporating overseas

Several lawmakers have introduced legislation aimed at stopping U.S. companies from moving overseas. Senator Charles Grassley and Senator Max Baucus said in a statement, "Prominent U.S. companies are literally re-incorporating in off-shore tax havens in order to avoid U.S. taxes. They are, in effect renouncing their U.S. citizenship to cut their tax bill. This is very troubling, especially now, as we all try to pull together as a nation."

Some members of congress believe that inverted corporations should be punished for renouncing their citizenship and that they should be taxed for making such unpatriotic decisions. Today, the U.S. taxes corporations 35% but in an effort to bring corporations back home some in congress would consider making a deal charging them only 5.35%. At that rate we could recover some $565 billion in tax revenue.

Corporations must do their share

Senator Bernie Sanders(I-Vt.) said that corporations and the wealthiest Americans must do their share to help bring down the debt. Sanders said in a Corporations must do their shareSenator Bernie Sanders(I-Vt.) said that corporations and the wealthiest Americans must do their share to help bring down the debt. Sanders said in a statement, "We have a deficit problem. It has to be addressed, but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people ant the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice."

Can we blame them?

The corporate tax system is structured in a manner to be beneficial to corporations. Can we blame them for taking advantage of the laws. Sure they lobbied for these tax laws but it’s the Republicans who refuse to eliminate their loopholes. And of course, why should they, since they put them there to protect their constituents. If there was ever any doubt of to who the Republican Party stands for, it's obvious now.

Even when our country faces default, the Republican Party will not consider raising taxes on the wealthiest of Americans. Their attitude reflects more than pigheadedness and politics as usual but a never say die mentality for their own financial gain. When Republicans insist that tax increase for ‘job creators’ is off the table, aren’t they really just lining their own pockets and those of their corporate friends? If any new jobs are being created they’re not in America. Moreover, it’s not good for anyone and not good for the country.

As more and more corporations leave the U.S. who will be left to pay taxes? Will the Republican Party worry about the fate of all the people who make America work everyday? The sad truth is they probably won’t give it a thought. They are so wrapped up in their own goals and the goals of the wealthy that no other consideration is important to them. If the Republicans continue to drag down the middle class and the poor at some point they will not be able to afford to live. When that happens it will be too late for America. Then what’s left of America and the Republican Party will have to ask who in the world will be and taking their order at the drive up window?