Don’t cry for rich folks and the corporations in President Biden’s sights for tax increases. Whatever the tax rules, corporate officers find loopholes to pay less than imaginable; and business lobbyists obtain friendly tax laws.
Janet Yellen decried the shocking gap of over $7 trillion in a decade between what we’re collecting and what should be collected for taxes owed. The top 1% of Americans fail to report a quarter of their income to the IRS.
Corporate tax payments (excluding payroll taxes) were 6.2% of federal revenue in 2020, while individual tax payments were 47%. The portion from business taxes fell from 23% in 1960 to 10% in 2000 to mid-single digits today. Republicans in 2017 said tax reductions for the rich and corporations would ignite an economic boom and produce more government revenue, but neither happened.
The proposed tax hikes are intended to offset existing tax breaks, which together with Trump tax cuts enabled 55 profitable companies to pay no federal tax in 2020. According to JPMorgan bank, the US should increase corporate tax rates to match other world economies. The bank concluded that ordinary Americans account for a greater share of tax revenue than in other countries.
That is clearly the case in Alabama which charges the fifth highest state and local sales taxes (and only one of six states taxing groceries), but is 49th in effective property tax rates. Our politicians saddle low and middle-class folks with the heaviest proportional tax burden. Cry out for fairness!