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mailmanBy introducing legislation to reduce the corporate tax rate, Richard Hanna perpetuates the myth that corporate tax rates in America are the highest in the world and that lowering them will magically create jobs.

While the top marginal corporate tax rate is 35%, the effective rate is much lower because of the many tax breaks businesses get such as accelerated depreciation, stock options, tax credits, and offshore sheltering. During the first half of the 2000's, corporations in all developed countries paid an average of 16.1% in taxes while American companies paid only 13.4%. A 2001-2003 study of Fortune 500 companies showed that 82 of them paid no income tax and, in many cases, actually received tax rebates resulting in a negative income tax.

The idea that lower corporate tax rates help the economy is contradicted by the fact that our economy was strong in the past when corporate tax rates were significantly higher. For example, during the 1950's and early 1960's the top rate was 52% and the corporations' share of all income taxes was close to 40%. Now corporations pay about 10% of all income taxes leaving individual taxpayers like you and me to make up the difference.

Continuing to shift the tax responsibility from corporations to individuals is another way we all get trickled on while multinational corporations and wealthy individuals get even wealthier.

Ted Laux
Lansing, NY

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