According to a study released by the Scapegoat Society titled, Constructive Inquiry Into the Nature and Nuetralizing of Blame, scapegoating is,
[a] hostile social/psychological discrediting routine by which people move blame and responsibility away from themselves and towards a target person or group.
A new GAO study requested by Democrat Senators Byron Dorgan (North Dakota) and Carl Levin (Michigan) was released today with this inflammatory and misleading headline in Yahoo News, “Most Companies in U.S. Avoid Federal Income Taxes.”
And Senator Dorgan has already made political hay out of the study,
It’s shameful that so many corporations make big profits and pay nothing to support our country. It’s time for the big corporations to pay their fair share.
Here’s the problem, though: The great majority of U.S. companies operate as S corporations or Limited Liability Companies whose taxes are required to be paid by the shareholders or members of the company and not by the company itself.
Chris Edwards for the Cato Institute was quick to point this out,
[I]ncreasing numbers of limited liability corporations and so-called “S” corporations pay taxes under individual tax codes.
The IRS keeps statistics on the number of returns filed by type and here are the numbers for 2004:
Type of Return # Filed
C Corporations 1,834,390
S Corporations 3,518.334
Foreign Corps 200,000
Total of Corps 5,552,724
Percent S Corps 66%
As usual, cynical politicians are counting on Americans not to actually read the study. Most people have busy lives and will just read the headline and say to themselves, “those evil corporations make all that money and don’t pay any tax. Horrors!”
I think everyone should pay their fair share of taxes. But scapegoating the job creators that fuel America’s economy is both cynical and foolish. No wonder an ever increasing number of U.S. corporations are choosing to do business overseas.
Because the electorate includes fewer “haves” than “have nots” blaming the “haves” for America’s problems has long been a strategy of the left. But history shows us the havoc scapegoating a successful minority in order to assauge an unsuccessful majority can wreck. See Germany, circa 1933; Russia, circa 1917; and Cuba, circa 1959.
We would be well advised to heed these words of La Rouchefoucauld:
A readiness to believe ill of others, before we have duly examined it, is the effect of laziness and pride. We are eager to find a culprit, and loath to give ourselves the trouble of examining the crime.
13 responses so far ↓
1 D. Lynn // Oct 24, 2008 at 6:02 pm
Huh. Am I understanding this correctly? The C Corps were covered in the study, so they’re the ones referred to in the study as “most paid no tax. ” Is there a way of finding out what the S and limited liability Corps paid in INDIVIDUAL tax?
2 Peter // Oct 25, 2008 at 9:49 am
D. Lynn,
ALL corporations were included in the study, not just the C corporations.
And 66% of the corporations are S corporations that are not required to pay tax.
For statistics on S Corporations visit IRS S Corporation Stats
3 Ways & Means Chairman Charlie Rangel Wants to Reduce Corporate Tax Rate to 28% // Nov 17, 2008 at 1:12 am
[...] The GAO Study on Corporate Taxes and the Scapegoating of Corporations [...]
4 Repeal the Corporate Income Tax and Bring Those Jobs Back Home // Jan 18, 2009 at 9:55 pm
[...] few months ago the GAO came under fire for releasing a report that showed that most U.S. corporations don’t pay any tax at all.
5 WSJ: Time to Repeal the Corporate Tax // May 6, 2010 at 10:37 pm
[...] The GAO Study on Corporate Taxes and the Scapegoating of Corporations Bookmark & Share: [...]
6 Tax Lies: U.S. Corporations Pay Little or No Tax // May 14, 2010 at 12:10 am
[...] The GAO Study on Corporate Taxes and the Scapegoating of Corporations Bookmark & Share: [...]
7 US Business Tax Burden Increased in 2010 // May 17, 2010 at 8:10 am
[...] The GAO Study on Corporate Taxes and the Scapegoating of Corporations Bookmark & Share: [...]
8 Paul // Feb 15, 2011 at 5:40 pm
So, instead of going after News Corp for tax evasion, I should go after Rupert Murdoch.
LLC is not an accepted designation for tax purposes. They must file under another designation, according to your own link.
Thanks, D. Lynn, for the clarity there!
And thank you, Republican Mouthpiece Blog! You’ve helped me so much, by showing plainly how you people try to obscure the truth.
9 Paul // Feb 15, 2011 at 5:47 pm
“As usual, cynical politicians are counting on Americans to not actually read the study.”
How do I know you’re not doing the same, if you don’t give me a link to the study?
10 Peter // Feb 17, 2011 at 11:27 am
Paul,
Go after whomever you like.
LLC is an accepted designation for tax purposes, but you file the results of your operations on either a Schedule C form, a partnership form or an S corporation form. There is no LLC tax form.
The Republicans get all of their really good ideas from me, not the other way around. Thanks for the compliment.
11 Peter // Feb 17, 2011 at 11:33 am
Paul,
“How do I know you’re not doing the same, if you don’t give me a link to the study?”
You don’t.
12 Marc // Mar 21, 2011 at 2:24 am
You conveniently left out the part where the individuals getting the 20, 30, 40 mil–as bonuses–only pay 15% because they are considered “capital gains”.
Again, they are not paying their fair share, and I agree with the long, lost, conservative belief which says the wealthy should pay more than joe the plummer, because they have a responsibility to the same society that makes it possible for them to be this wealthy. Do you think they could be this successful in any other country? Didn’t think so.
13 Peter // Mar 21, 2011 at 9:21 am
Marc,
Thanks for visiting.
Every study I have read shows that the rich pay more than their “fair” share. Of course, people can spin those studies to their own advantage.
I don’t think you want the rich to pay more because they live in a society that makes it possible for them to be rich – the poor and the middle class live in the same society – but rather because they are successful in that society.
I think we should reward rather than punish people who support their own, do not become dependent on government and employee others.
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