Say what you will about big business, but many of the nation’s largest multinational companies play a huge role in the nations overall economy as well as it’s political showdowns. When it comes to politics, huge companies often complain, along with republicans, that the country’s corporate tax rates are way too high, bad for business and simply not fair. On the other hand, those on the left of the political world claim that big businesses are dodging their fair share of taxes and leaving many of the country’s small businesses with the bill. So it’s no surprise that this election year has included much debate about each candidate’s plans and proposals for corporate taxes. What is surprising, however, is that many of the country’s biggest companies are also some of the biggest donors to Hilary Clinton’s campaign.
On the surface, that would appear to be a huge contradiction. Why would some of the nation’s largest companies, which are subject to some of the highest tax rates, donate to the candidate that has clearly stated she will not lower corporate tax rates? In fact, she has stated that she might even raise them. Even the current president has discussed lowering corporate taxes at least a little. Clinton, on the other hand, has no such plans. So why would any of these companies give to her campaign? The answer, although they would likely never fess up to it, is that it doesn’t really matter what Clinton does with the corporate tax rate, because most of them don’t really pay any taxes anyways. Don’t believe it? According to a report from the General Accounting Office the country’s largest companies paid an effective tax rate of a measly 14 percent from 2008 to 2012. Some companies don’t pay any taxes at all, and still others actually have a negative tax rate.
There are many examples of this in the corporate world, including Apple, Microsoft, Amazon and many others. The funny thing is, most of the biggest companies that pay the least amount in taxes are actually some of Clinton’s biggest supporters. Meanwhile, Clinton is constantly talking about corporate tax evaders and how they need to be reigned in so they pay their fair share. The difference is that even though Clinton claims she would not lower the rates and that she might even increase them, she wouldn’t actually be changing the tax system as it currently stands. That means, that despite the higher rates, big businesses would still be able to use the current loopholes and deductions to keep their effective tax rates way down by manipulating the system. As long as the current system is in place, big business wins.
That spells bad news for small and medium sized businesses because they don’t qualify for most of those loopholes and thus pay a higher effective tax rate than the large corporations. What’s more, these big corporations also get the benefit of receiving government contracts and subsidies that allow them to essentially take advantage of other taxpayers’ money. So, even though on the surface Clinton sounds bad for big business, in reality as long as she doesn’t disrupt the system, large corporations will continue to prosper and she’ll continue to get their campaign donations.
This post was published on October 3, 2016