Crony Capitalism via Tax Favors
Citizens for Tax Justice finds that 12 big U.S. companies paid an average -1.5% rate during 2008-2010, while earning $171 billion in profits. If they had paid at the full 35% U.S. statutory rate, they would have coughed up about $60 billion in taxes, the study says. Instead, they actually got a little money from the government, on net – about $2.5 billion. GE was the number one recipient.
The problem with this study, because Citizens for Tax Justice is a liberal group, is that they want to use this study to RAISE taxes on everyone, espeically the rich and evil corporations. Take away the tax breaks and make the rich pay!
The real issue that this study illustrates is how crony capitalism distorts the market. Companies will do whatever is required to get these favors from the government, regardless of whether they would grow the economy or help the country. And we taxpayers end up picking up the bill, not only for the remaining costs of government, but for the highter costs of everything we purchase caused by this subsidy-seeking corporate behavior.
So these special tax breaks for corporations should definitely be reduced – but that savings should be rolled back into tax RATE reductions for everyone, so that everyone gets to keep their money, and the government stops distorting the marketplace by picking favored buisinesses and activities to subsidize. This frees up the economy to grow and make EVERYONE richer.