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Proof that Corporate Tax Cuts Have Done More Harm Than Good

The percentage of taxes that corporations pay today are near the record lows of the United States’ total tax bill, even though these corporations are bringing in huge profits. Although this is happening, the unemployment rate still remains high. A study completed by the Center for Effective Government and National People’s Action shows the damage done by having corporations pay low taxes and the effect on state budgets. The study shows that a small increase in the amount of taxes large corporations pay will have positive effects such as restoring cuts in education and public services, and could possibly restore over three million jobs. As federal aid was declined to state budgets more and more, many states have cut back on taxes claiming that doing so would benefit their economy and create jobs. One example of this was a tax exemption on corporate profits passed directly to individual owners in the state of Kansas. This kept Kansas in a recession. Hard working employees were stuck with paying the taxes that corporations got out of paying. Corporations get out of paying taxes in loopholes such as offshore tax havens, the “executive pay loophole” that allows corporations to deduct performance bonuses from their tax receipts, and the “stock-based pay loophole” that allows companies to deduct billions from their tax bill. People can see that cutting the taxes of corporations is not helping the economy in any state. It is not helping form jobs, and Americans agree it needs to be stopped.

Source:

Richard Long, “More Proof Corporate Tax Cuts Have Done More Harm Than Good”Campaign for America’s Future, Sunday, 30 March 2014 http://www.truth-out.org/opinion/item/22772-more-proof-corporate-tax-cuts-have-done-more-harm-than-good

Students Researcher: Karen Sewell, Indian River State College

Faculty Evaluator: Elliot D. Cohen, Ph.D., Indian River State College

ETHICS ALERT

The ethical problem raised in this article is the fact that because large corporations are not paying the taxes they should be paying, the funding for public services, education, and job growth in the economy are negatively affected. This is an ethical problem because it has to be decided whether or not corporations having tax cuts are right or wrong. Many Americans believe it is wrong for them to pay taxes when large corporations are not paying as much as they could be, especially when many of these corporations make high profits.

When the taxes of the large corporations are cut, they are giving less money back to the government, even though their profits are high. Many Republican states cut back on taxes, thinking it would increase the amount of jobs being created. A study completed by the Center for Effective Government and National People’s Action shows that cutting those taxes will help no one but the corporations. It proved wrong that “cutting corporate taxes will stimulate job creation and grow the economy.” The study shows that increasing the amount that corporations pay in taxes will restore cuts made in education and will increase job growth in the economy. The principle behind cutting taxes of corporations is not a bogus one.

Allowing these tax cuts means working Americans would have to pay more in taxes to make up for the loss of the corporations’ money. A cut in these taxes is a cut in the funding of education. Also, cutting the taxes of corporations is cutting funding for public services, and ultimately stopping the increase of jobs in the economy. None of these things I have mentioned would be in the interest of the American people. The only interest served is that of the corporations to maximize their profits.

People don’t trust large corporations as it is. If they knew that tax cuts given to large corporations was the real reason why there are decreases in available money for education, schools, libraries, jobs, and other public services, they wouldn’t tolerate it. The media therefore needs to cover this story rather than censor it. One major problem, however, is that the mainstream media is itself one of these self-serving corporations.

 

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