Tuesday, May 05, 2009

Shock Post: Horrid corporations actually pay taxes

Late nights and Google can make strange bedfellows for bloggers. Imagine the surprise at finding this letter regarding the increase in revenues (ie. taxes) received from US corporations circa 2003 to 2006:

Dear Mr. Chairman:

In response to your letter of May 11, 2007, the Congressional Budget Office (CBO) has reviewed the available data and analyzed the sources and underlying causes of the growth in revenues since 2003. This analysis shows that the overall increase in revenues as a share of gross domestic product (GDP) since 2003 is disproportionately accounted for by increases in corporate income tax revenues.
The letter is from the then head of the CBO, now President Obama's Director of OMB, to the Chairman of the US Senate Budget Committee. So, during those years two interesting facts come to light:

1) The increase in tax revenues is "disproportionately accounted for by increases in corporate income tax revenues", and
2) An increasing GDP may just have accounted for higher tax revenues coming in to government despite then lower rates of taxation.

(Editor's note: This post does not address the other fact on the table. That which demonstrates corporations do not actually pay tax even if the marginal rate is 100%. Corporations collect taxes from individuals and pass them along to government. It is individuals who actually pay corporate taxes in some form of higher prices, lower wages and/or lower returns on capital.)

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