"It’s nothing new for Republicans to favor the rich over the poor; that preference is as old as the Grand Old Party itself. And there’s nothing new about the rich buying off politicians in order to get richer. It’s the world’s second-oldest profession, and it has much in common with the first. Today’s GOP agenda aims to overturn the Great Society, and the New Deal, and to return America to the laissez-faire policies of Herbert Hoover — only this time, with multinational corporations, globalization and an information-technology-enabled financial bubble machine."
The rich and the corporations get away with not paying their fair share in taxes, influencing the laws of this country with fancy lobbyists and expensive lawyers. They also run the propaganda cartels known as mass media (TV and newspapers). It is a myth that we have a free and independent press. O.J. Simpson got away with murder due to his expensive lawyers. Motley Crue's Vice Neil got off a drunk driving charge with community service. Anyone else would get prison time for these acts. Big companies pollute with impunity, such as Exxon and BP. They in fact actually buy off the politicians and take advantage of loopholes with corrupt attorneys, getting out of paying taxes and getting themselves off the hook for crimes they commit.
"The current economic downturn has opened up enormous gaps between revenues and expenditures in the budgets of the vast majority of states. Tax revenues are flat or declining, and spending pressures are growing as families with unemployed workers require state-financed medical assistance and income support. New spending demands associated with security and public health concerns are compounding the states' fiscal crises.
As they work to close these budget gaps, state policymakers are facing difficult decisions about whether to cut state services and/or raise taxes.[1] State officials may also wish to consider policy options that could increase the yield of existing revenue sources. In particular, they may wish to scrutinize their tax structures for unintended and unrecognized loopholes that allow some individuals and businesses to avoid paying their fair share of taxes, and then take steps to minimize such tax-avoidance opportunities.
The Corporate Income Tax Is a Fading Source of State Revenue
State corporate income taxes are long overdue for a thorough examination. The corporate income tax laws of the majority of states are riddled with loopholes that permit many large multistate corporations to avoid paying tax on a significant share of their profits. The growing sophistication of corporations in exploiting these flaws has undoubtedly contributed to the declining significance of the corporate income tax in state tax structures over the past two decades. According to the U.S. Census Bureau, corporate income taxes supplied 10.2 percent of state tax revenue in the states levying them in 1979, but just 6.3 percent in 2000.[2] (See Table 1.)
The steady erosion of state corporate income taxes is revealed as well in estimates of the effective state corporate income tax rate. The effective corporate tax rate is the rate at which corporations actually pay tax on their profits, as opposed to the rate that is nominally imposed. The effective corporate tax rate is measured by dividing actual corporate tax collections by an estimate of "true" corporate profits. Top nominal state corporate tax rates are generally in the range of 6-10 percent; only five of the 45 states imposing corporate taxes (including the District of Columbia) have top nominal rates less than 6 percent. A recent report by the Congressional Research Service estimated, however, that the average effective state corporate income tax rate declined from 5.3 percent in 1979 to 3.8 percent in 1998."
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