Supercommitte Democrats’ Betrayal and Some Suggestions for the 99 Percenters (continued)

The 99 percenters can also become a counter-force to a building consensus that corporate taxes have made U.S.-based corporations noncompetitive in the world economy. Even former president Bill Clinton has proposed reducing corporate taxes from 35 percent to 28 percent.

Corporations paid about 30 percent of total U.S. taxes in the 1950s and their share is now down to under seven percent. The corporate share of taxes paid to state governments is now only 50 to 60 percent of what it was at its height. According to a 2007 study by the Bush Treasury Department, between 2000 and 2005 U.S. corporations paid only 13.4 percent of their profits in corporate income taxes, well below the Organization of Economic Corporation and Development (OECD) average of 16.1 percent

The Congressional Budget Office has concluded that two-thirds of U.S.-based corporations pay no federal income tax. A study of the top 100 corporations in the Fortune 500 found that 25 paid their CEOs more than they paid in income taxes. A 2008 study by the Government Accountability Office showed that 83 of the 100 largest companies operate subsidies in nations that are considered to be tax havens.

A look at just two very large corporations reveals the egregious nature of our corporate tax structure. General Electric earned $14.2 billion in profits in 2010, paid no corporate income tax and actually accumulated $3.2 billion in tax credits. Prudential Financial lowered its tax bill by establishing 36 subsidiaries in tax-haven countries. It paid its CEO $16.2 million last year and received a $722 million refund on its federal corporate income taxes.

Thus, the 99 percenters can advocate a corporate tax structure going back to the provisions found in the tax codes of the 1950s, when corporations were contributing a much larger share of the tax burden and the economy was booming.

A final suggestion I would make is that the 99 percenters should work to help revive organized labor. Labor unions once constituted 25 percent of the labor force and now they are down to about seven percent. The fruits of economic activity are going increasingly to ownership, management and shareholders. The consequence of the public antagonism toward organized labor, set in motion by the very destructive presidency of Ronald Reagan, has come home to roost, as workers don’t have the financial resources to contribute to demand, the main driver of business growth. It is not taxes nor government regulations that are holding up business growth: it is lack of demand.

The Washington Post reported that half of all U.S. workers earned less than $26,364 in 2019 — the lowest median wage since 1999, adjusted for inflation.

In the final analysis, it was the growth of organized labor that was a major factor in building the middle class in the United States.

Free trade agreements have facilitated production of products by very low-paid workers, thereby contributing to the outsourcing of U.S. jobs — 2.4 million overseas jobs created by U.S. firms since 2000, while they slashed 2.9 million jobs in the United States. Thus, 99 percenters should oppose any more free trade agreements and lobby to use exit provisions to get out of those we have previously signed.

Footnote: It is not a good idea to lean too heavily on tax polling of a very fickle U.S. general public. A Washington Post-ABC poll taken in the last few months showed that 75 percent supported tax hikes on millionaires and another poll found that more than two-thirds favored tax hikes on households earning $250,000 or over. However, a Washington Post-ABC poll in 2010 found 54 percent supporting extending all the Bush tax cuts.

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