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The Bridge to Prosperity: Reverse Reckless Cuts, Restore Our Infrastructure, and Revive Jobs

May 15, 2014

The United States is facing a growing infrastructure crisis and a lingering jobs crisis.Most of America's infrastructure was built in the decades directly after World War II. Each day in America, more than 700 water mains break. Seventeen percent of water pumped by municipal pumping stations never reaches consumers' faucets – a waste of 2.4 trillion gallons of precious water each year. Potholes on the nation's roads cost the average family $355 in additional car repairs annually, deficient roads and bridges will cost businesses an estimated $43 billion a year in transportation delays and shipment rerouting, and too many children attend schools with leaky roofs, rattling windows, and decrepit plumbing.Five years into the economic recovery, nearly ten million Americans remain unemployed, more than a third of them for more than six months. There's only one open job for every three people who want to work.A large portion of America's infrastructure in the U.S. is funded by federal monies. Despite the obvious need for better infrastructure and for more jobs, Congress has failed to invest in important infrastructure repairs that our communities need. According to the American Society of Civil Engineers, it would take a sustained annual investment of $125 billion a year to bring our roads, bridges, dams, levees, water systems and sewers, and school buildings up to 21st century standards. Making that sort of investment would create 2.5 million good new jobs and would ensure U.S. cities can compete with those in other modern nations.We can invest in infrastructure and jobs if we recapture the $150 billion of tax revenue that leaks out of the Treasury every year, by plugging the corporate tax loopholes that wealthy individuals and prosperous multinational corporations use to avoid paying taxes. We need to make sure those who benefit most from the public structures and services provided by the federal government pay their fair share of the costs of keeping our nation's infrastructure in good shape.Invest now, build a platform for business growth, and create jobs in the bargain. To build and maintain the public structures that make private economic activity possible, the federal government should increase spending on programs that pave the way for future growth. Such investments would spur immediate job growth, creating a "virtuous circle" of more money circulating in the economy, more job creation, and more tax dollars flowing in to federal, state, and local governments from sales taxes, payroll taxes, and income taxes.

The Disappearing Corporate Tax Base: How to Reclaim Lost Tax Revenue to Rebuild State Budgets

March 27, 2014

Corporations should pay for the public structures that support the national economy and allow their own businesses to prosper. Without a legal and political structure so supportive of commerce and industry, or a national infrastructure for energy development, research, transportation, and communications, or an educated workforce, America would not have the largest economy in the world. That economy allowed American corporations to prosper and our middle class to grow. Businesses that have done well in America should do right by America. It's time for all corporations to step up and contribute to the public systems that ensure we have a free and democratic society in which every American can succeed and thrive.

The Corporate Tax Rate Debate: Lower Taxes on Corporate Profits Not Linked to Job Creation

December 3, 2013

The American corporate tax system is badly broken. Some corporations pay more than a third of their profits in federal income taxes, while other equally profitable firms pay nothing at all. On average, corporations pay just 12.6 percent of their profits in federal income taxes, according to a recent study by the U.S. Government Accountability Office.Corporate and political leaders keep telling us that cutting corporate tax rates will create jobs.Our examination of the evidence found no relationship between cutting tax rates on corporate profits and job growth.We examined the job creation track record of 60 large, profitable U.S. corporations (from a list of 280 Fortune 500 companies) with the highest and lowest effective tax rates between 2008 and 2010 and found:22 of the 30 corporations that paid the highest tax rates (30 percent or more) on their reported profits created almost 200,000 jobs between 2008 and 2012. Only eight of the 30 firms paying high tax rates reported reducing the number of employees between 2008 and 2012.The 30 profitable corporations that paid little or no taxes over three years collectively shed 51,289 jobs; half of these low-tax firms created some jobs, and half shed jobs between 2008 and 2012.Lowe's, the nation's second-largest home improvement store, paid over 36 percent in taxes on reported profits of $9 billion between 2008 and 2010, and hired an additional 28,820 employees between 2008 and 2012.Verizon, the nation's largest wireless provider, reported $32 billion in U.S. profits between 2008 and 2010, yet received tax refunds totaling $951 million and reduced the number of employees by almost 56,000 between 2008 and 2012.In 2004, when a temporary "tax holiday" on offshore profits was put in place, 58 firms brought $218 billion in profits back to the U.S. under the program, for a savings of $64 billion on their taxes. In the following two years, those 58 firms eliminated 600,000 jobs.In 2012, U.S. corporations reported earning nearly $1.8 trillion in profits. Had they paid the 35 percent tax rate on those profits, total corporate tax receipts would have been $630 billion (rather than the $242 billion they actually paid), and the deficit would have been reduced by nearly a third.Today, large U.S. corporations report more than $1 trillion in cash or liquid assets. They have the funds to invest in new jobs, should they choose to do so. We found no evidence that cutting the tax rate on corporate profits induces firms to create new jobs in the United States. However, several legal loopholes and deductions do discourage job creation in the U.S. and should be eliminated. This would raise significant revenue and make the tax code fairer.