Thomas J. Gibson of the American Iron and Steel Institute ("Reform Taxes," Aug. 27 letters) correctly points out that the U.S. statutory corporate tax rate is the highest in the world. What he doesn't mention is that corporations pay only a fraction of the statutory rate -- sort of a "Leona Helmsley" thing. The General Accounting Office recently determined that the average effective tax rate for large U.S. corporations is 12.6 percent. This tax rate puts us well below every single European Economic Community member, with Japan to boot.
But wait -- there's more. There are at least two dozen large U.S. corporations that are paying no corporate taxes at all. There are even companies that accumulate enough federal subsidies and tax breaks so that the federal government actually owes them money. From 2008 through 2011, GE, Boeing and Verizon all had negative corporate taxes.
In the postwar era, U.S. manufacturing dominated world markets in terms of both quality and quantity. But from 1950 on, the percent of federal taxes (including payroll taxes) paid by corporations has fallen from 32 percent to 17 percent while the percent paid by individuals has increased from 45 percent to 63 percent. It should be obvious that decreases in corporate taxes will translate into increases for individual taxes.
U.S. manufacturing needs to make itself more competitive, true, but not by shunting more corporate tax burden onto the U.S. citizenry. We need to get more competitive the "old school" way. Not by branding better, but by being better. And part of being better would entail making top management leaner and more accountable. The ratio between average CEO compensation and average worker pay in the United States was 475:1 in 2011. In Germany it was 12:1 and in Japan, 11:1. And who's eating our lunch right now? 'Nough said.