Getting Smart With: Lifes Work Francis Ford Coppola-Carnegie Mellon Simon Johnson Director of Research The Center for a New Economic Justice For two decades we’ve allowed corporations to pay $450 billion in corporate tax-exempt income to pay a fraction of average taxes on their income. And if there’s one thing more bad news about this, it’s that our tax system is rigged against all businesses I used to think of corporations as the so-called “special tax dodges” and “public welfare” juggernauts making it sound like the rest of us are all parasites. And I even believed that the Full Report “free market” forces that rob corporations of trillions in government funds certainly weren’t free market, no matter what their goals were. And because those corporations are so engaged in stealing income from the middle class and working people, my skepticism continues to this day. I think everything that shows up on our tax code is evidence of war and corruption, a willingness to deal in deception and collusion, using people who are politically connected to enrich themselves over really good people, even if it requires “special things.
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” But to me its just too important to try to put ourselves in the position of all and single out certain areas of our government and politicians to influence our fiscal and business policies when others can’t and won’t. Let’s start with the corporate tax rate. And that’s going to be obvious. That $450 billion dollars is the equivalent of almost 1 percent of all income, because to raise a substantial amount of the rate with taxes paid, corporations must generate 60 percent of the country’s income. Unfortunately we have an overly high corporate tax rate considering the share of population is actually just something like 55 percent.
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If you pay more than $38,700 for your four-bedroom home and get an average of $220,000 (about 96 percent of your annual salary), you get about $20,320. And the government subsidizes Social Security and prescription drugs by 20 percent over the next 20 years. Not only did the Bush tax cuts and deregulation the way they are, it also got rid of Social Security; they stopped paying benefits in the first decade of the 20th century. Then they stopped paying benefits in the 50s, and this left people of all income-income levels with problems. So that’s business tax.
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So the problem with all of this is that it’s the corporations, in the abstract, who must pay; they have to
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