Sunday, September 04, 2011

Corporate America, Victims

It's a charge made frequently by Rush Limbaugh. "This nation," he bloviated Friday, "is being held hostage by a small band of ideological radicals who have contempt for the American people and our economic system."

Rush did not specify who constitute this "small band of ideological radicals" because no such group is running anything these days. Tax cuts extended for the wealthy, a raise in the debt limit conditioned on domestic spending cuts, a health care bill based on a proposal by Rush's favorite think tank, the Heritage Foundation. If these are "ideological radicals" in Washington, they're ones embarrassingly conservative.

More interesting, though, is the "contempt for the American people" this band has. Because it is the self-identified "El Rushbo" who on Friday (as he does ad nauseum) complained that President Obama "takes money from some people and some industries, redistributes that money to those who do not create, who do not work, and have not earned it, because he believes they are the ones who have been screwed."

Limbaugh on previous occasion(s) has made clear who comprise that second group: anyone (except corporations) who receive a subsidy from any branch of the government, whether they be poor children benefiting from a food stamp program, the poor receiving services through Medicaid, the elderly obtaining health care through Medicare, or Americans lacking a job receiving unemployment compensation. And he made clear on Friday who his favored "some people and some industries" are: "Now, corporations pay a 35% tax rate in this country," Rush claimed. "It's the highest in the world. They pay a ridiculously high federal corporate tax for the most part based on what other countries tax their companies."

If Rush had said "their statutory tax rate" or even "their tax rate," it would have been pretty slick. Instead, he decided to claim "corporations pay a 35% tax rate," which is identical with the statutory tax rate. Surely, even if Limbaugh believed that corporations pay a lot compared to their counterparts in other industrialized nations, he would know that it is not the full 35%. After all, he is fond of their loopholes and and will defend to 3:00 p.m. eastern time their right to keep them.

It is a lie that won't die, despite heavy evidence. As the table above indicates, the effective tax rate for American corporations, while higher than in Russia, France, and the United Kingdom, is lower than that paid in Germany, Canada, India, China, Brazil, Japan, and Italy. And as a percentage of GDP, corporate taxes are lower in the U.S.A. than in 24 of these other 25 nations of the Organization for Economic Cooperation and Development (OECD), exceeding those only in Iceland (Figure 2.7 here).

"Contempt for the American people?" It's a trait Rush Limbaugh is intimately familiar with.

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