Robert Wassman’s April 15 letter, “Reduce expensive entitlements,” misses the real problem all together.
As Sen. Carl Levin points out in a recent op-ed in the Lansing State Journal, while the top federal income tax rate for corporations is 35 percent, the actual effective tax rate for U.S. corporations is less than 15 percent.
Some of the largest corporations pay no taxes at all.
In 2011, individual citizens paid about $6 in income tax for every dollar that corporations paid. In 1980, the ratio was less than 4 to 1.
When taxes are taken as a percentage of the gross domestic product, corporations pay a third of the taxes that they did in 1950.
Corporations accomplish this by using tax-excluding shell companies in the U.S. and tax havens abroad. A prime example of this is Bank of America, which has 177 subsidiaries in the Cayman Islands alone.
The ongoing exploitation of tax loopholes by large profitable corporations has helped shift the tax burden onto American families and small businesses, and added billions of dollars to the budget deficit.