Corporate Tax Deals Won't Fix The Economy

The Republicans have convinced much of the American populace that this country is in trouble because the deficit has grown too large. And since taxes can't be raised for ordinary Americans in the midst of a recession, people have been led to believe that the only thing that can be done is to cut programs, even programs that are necessary to educate our youth, take care of the elderly, provide for medical care, and help Americans in financial distress.

But the fact is that these good and much-needed programs are not the problem. The real problem is that we keep cutting taxes for the rich and giving corporations sweetheart tax deals that result in putting the tax burden on workers and the middle class. And this is happening at a time when the rich and the corporations are making more money than ever. They don't need all the tax breaks they are getting.

Take General Motors (GM) for instance. A few years ago they were in deep trouble, but the combination of declaring bankruptcy and a government bailout has them back in the black. But even though they are making a nice profit this year, they won't be paying any taxes. That's because the government is letting them mark off their losses from previous years -- to the tune of $14 billion in taxes they won't have to pay.

While it is normal to let a company write off previous years losses on their taxes, it is not normal to let them do this after they have declared bankruptcy and had much of their debt forgiven. But the government is going to let GM do it anyway. And that is just wrong. They have enough of the taxpayer's money already.

And GM is not the only U.S. corporation that is avoiding paying its fair share of taxes. While Exxon pays billions of taxes to other countries, they pay nothing to the United States government in taxes. And this is true of far too many large corporations. Some even get tax breaks for outsourcing American jobs (a tax provision the Republicans protected in the last session of Congress).

The truth is that cutting programs that benefit ordinary Americans and cutting taxes for the rich and the corporate interests will not help this country out of recession -- only creating jobs will do that. But job creation requires the government spend some money -- money they would have if the rich and the corporations paid their fair share of taxes.

Some of you may think that lowering taxes for corporations means they will hire more workers. That has been proven to not be true. Businesses only hire workers when they need them to deliver the goods or services they offer, regardless of what the tax rate is. If a corporation doesn't need more workers to deliver their product properly, then those tax breaks just go into their bank accounts (and into huge bonuses for management).

The Republicans are just wrong with their subsidies and tax breaks for the corporations. They don't need the help, but the American people do. And the people could get the needed help if the corporations (and the rich) paid taxes.