Timothy Geithner
Every now and then I read dozens of versions of so-called reporting on stories that are important to the establishment, just to marvel at the shallowness of the reporting and the shocking level of co-ordination among the mainstream “news” outlets. I went through this exercise this morning on stories about President Obama calling for reducing the corporate tax rate from 35 to 28 percent.
It doesn’t matter who you read — the New York Times, any of the smaller newspaper chains with Washington bureaus, or the web sites of cable news channels including Fox — all the stories followed the same formula and included the same establishment quotes. I did not find a single mainstream story that compared Obama’s proposed corporate tax rate to individual tax rates. Some stories mentioned that Obama wants to raise taxes on millionaires and leave tax rates the same for people making under $200,000, but I did not find a single story saying what those rates are.
What all these stories is avoiding is telling readers that the establishment wants higher tax rates for individuals than for corporations. As far as I can tell, Obama wants a tax rate of 30 percent for those making more than a million a year. As for those making less than $200,000, the current tax code for individuals taxes income above $171,551 at 33 percent. No one bothered to report this. Only those of us with memories greater than 18 hours can hold such inconvenient facts in our heads at the same time.
The other thing that all the mainstream tax stories have in common this morning is that they make some sort of lame comparison with Mitt Romney’s tax plan. All the stories say that the U.S. corporate tax rate is the highest in the “developed world” other than Japan. Some of the stories even say that many corporations pay less than the nominal tax rate.
When you analyze all this “reporting” for what it is — propaganda — this is the message that they clearly want us to get: They are setting the stage for lower corporate tax rates, regardless of what happens with the presidential election. And does any reality-based taxpaying American believe that tax loopholes for corporations and the super-rich will be closed, given the corruptness of the Congress and the lobbyists who own Congress?
The other thing that the establishment and the corporate media don’t want Americans to know is that, despite all the hoopla about corporate tax rates in the U.S. being high (which is not true because no corporation pays the nominal rate), the tax on capital gains is absurdly low — 15 percent. In other developed countries, the tax on capital gains ranges from 20 percent to 35 percent and even 50 percent. Most Americans probably don’t understand that it’s the capital gains tax that rich people pay. That’s why Mitt Romney’s tax rate is 13.9 percent. Never in my working life did I pay a tax rate anywhere near that low.
Only the DailyKos shows the usual left-wing concern with reality rather than establishment blather and misdirection:
As has been widely reported for years, the effective (read: actual) corporate tax rate is far lower than the 35 percent headline rate that gets all the bad press. Last year, Citizens for Tax Justice reported on the 280 most profitable Fortune 500 companies. Findings? Thanks to tax breaks and subsidies, the average effective tax rate over the three-year 2008-2010 period was 18.5 percent and the companies enjoyed subsidies of $222.7 billion. During at least one of the three years, 78 highly profitable companies paid zero taxes and 30 actually had a negative tax rate.
But that’s not the worst of it. In 2011, according to the Congressional Budget Office, the effective corporate tax rate fell to 12.1 percent, the lowest level in 40 years. This comes at time when corporate profits are at a 60-year high.
One source reported that Rush Limbaugh says that Obama plan for corporate tax rates would actually raise corporate taxes by closing loopholes, as though that’s bad.
Update: A friend sent this link to a detailed and wonkish piece, published today, on tax policy. I am not in the least surprised that only a socialist organization is willing to do thorough, real-world reporting on tax policy. It’s very important to understand why this is so. Tax policy screws working people while favoring corporations and the rich. That’s only going to get worse, regardless of who wins the next election. The establishment media won’t report in any serious way on tax policy, because they serve the establishment. The right-wing media not only doesn’t report, but also distorts, because it serves the interests of corporations and the super-rich. So the only honest reporting about tax policy comes only from those who are getting screwed by tax policy.
Update 2: My old colleague Dan Froomkin now checks in on corporate taxes. Once again, only the left can be wonkish and thorough. Everyone else must keep on skipping — and help keep the American people the stupidest people in the developed world.
