(Editor’s note: In honor of National Tax Day, we’re rerunning an article that originally appeared last May 31 under the headline “Editorial: God bless taxes.”)
Default Lines column, June 2011 edition of eSchool News—The Institute for a Competitive Workforce, an affiliate of the U.S. Chamber of Commerce, has issued a new report calling for urgent action to improve U.S. math and science instruction.
Called “The Case for Being Bold: A New Agenda for Business in Improving STEM Education,” the report makes a series of common-sense recommendations that reformers have heard before: rethink teacher hiring and training practices, redesign schools for the 21st century, use technology to personalize instruction, create opportunities for local professionals to help teach students part time … and so on.
Those are laudable goals. But I have a bold suggestion of my own for how businesses can help improve education: Pay their fair share of taxes.
In lobbying for tax reform, the Chamber of Commerce and other members of the business community have long argued that the corporate tax rate in America is the highest in the world. Although that’s true of the top statutory rate, which is 35 percent, very few large corporations pay that much—and many pay far less.
A report issued in February 2011 from the Center on Budget and Policy Priorities shows that the average corporate tax rate—that is, the share of profits that U.S. companies actually pay in taxes—is about 13 percent. What’s more, “when measured as a share of the economy, U.S. corporate tax receipts are actually low compared to other developed countries,” the report said.
General Electric made headlines earlier this year when it was revealed the company earned $14.2 billion in profits in 2010 but didn’t pay a dime in U.S. taxes, thanks to crafty accounting practices that took advantage of existing—and perfectly legal—tax loopholes.
But GE is far from alone. As the tax filing deadline for 2011 approached, independent Sen. Bernie Sanders of Vermont published a list of 10 hugely profitable corporations that have managed to avoid paying U.S. taxes. ExxonMobil topped the list, having made $19 billion in profits in 2009. ExxonMobil not only paid no federal income tax that year; it actually got a $156 million tax rebate from Uncle Sam, according to SEC filings.
These figures should prompt outrage at a time when state legislatures are taking away the right of educators to collectively bargain and other benefits, and when governments and local school systems are slashing educational programs—in the name of balancing budgets.