Corp. Whines About Taxes (It Doesn't Pay)

(The cartoon above is by Dan Wasserman in The Boston Globe.)

Last week, Susan Ford (a senior executive at Corning, Inc.) testified before the House Ways and Means Committee. She was there to complain about the high rate of taxes for United States corporations. Here is some of what she said:

American manufacturers are at a distinct disadvantage to competitors headquartered in other countries. Specifically, foreign manufacturers uniformly face a lower corporate tax rate than U.S. manufacturers, and virtually all operate under territorial systems which encourage investment both abroad and at home.

After listening to that, a person might think that Corning had paid an enormous amount of taxes to the U.S. government -- an amount so large it is making it hard for the company to compete. She even went on to say that Corning had paid an effective tax rate of about 36% in 2011. To put it bluntly, that is an outrageous lie!

Corning did make a really nice profit between 2008 and 2011 -- about $3 billion. And they should have paid a nice chuck of that in taxes, but they didn't. The truth is they were one of several American corporations between 2008 and 2011 that paid no taxes at all -- that's right, not a single penny. In fact, it's even worse than that. From 2008 to 2010 they actually got a $4 million refund from the U.S. government. And their actual tax rate for 2011 was a negative 0.2%.

The 36% taxes she referred to the company paying is what the company might owe if they brought their foreign earnings back home to this country. But those taxes have not been paid because the money is still languishing in foreign bank accounts (to prevent having to pay any American taxes on it).

Frankly, I'm having a lot of trouble feeling sorry for a corporation that pays no taxes. And until it does start paying some taxes, I'm not sure they even deserve to be heard on how onerous the American tax system is. Bring those foreign profits home, pay taxes on all of the profits, and then we can discuss whether the tax rate is too high or not.

P.S. -- That "territorial system" of taxing corporations that Ford (and Mitt Romney) would like to create is estimated to cost this country another 800,000 jobs.