Billionaire investor Warren Buffett says that it’s a “myth” that high taxes are “strangling” U.S. corporations.
In a Monday op-ed for The Wall Street Journal, Republican presidential candidate Rick Santorum called for the corporate tax rate to be halved from 35 percent to 17.5 percent to “[r]estore America’s competitiveness.”
CNBC’s Andrew Ross Sorkin asked Buffet what he thought the highest rate should be.
“What the rate should be are rates that bring in about 18.5 or so percent of GDP [gross domestic product] as revenue,” the Oracle of Omaha explained. “The interesting thing about the corporate rate is that corporate profits, as a percentage of GDP last year were the highest or just about the highest in the last 50 years. They were 10 and a fraction percent of GDP. That’s higher than we’ve seen in 50 years.”
He continued: “The corporate taxes as a percentage of GDP were 1.2 percent, $180 billion. That’s just about the lowest we’ve seen. So our corporate tax rate last year, effectively, in terms of taxes paid for the United States, was around 12 percent, which is well below those existing in most of the industrialized countries around the world.”
“So it is a myth that American corporations are paying 35 percent or anything like it. Incidentally, 1.2 percent of GDP or 12 or so percent of corporate profits actually paid, that is a rate far, far, far below what we’ve seen in the United States. … Corporate taxes are not strangling American competitiveness.”
David Carr with a thoughtful piece on how the Obama administration deals with leakers.
UPDATE: Oh, here’s a good one:
Growing concerns over Iran’s nuclear facilities may prove to be all for naught. Officials from the global intelligence company Stratfor allegedly discussed that Israel may have already destroyed the Iranian nuclear facility, according to one of the emails released by Wikileaks Monday.
In one of the over five million emails leaked, the conversation centered on Israeli Defense Minister Ehud Barak praising the news of deadly munitions blasts at a base of Iran’s elite Revolutionary Guards.
“I think this is a diversion. The Israelis already destroyed all the Iranian nuclear infrastructure on the ground weeks ago,” one intelligence official wrote in an email dated November 14, 2011. “The current ‘let’s bomb Iran’ campaign was ordered by the EU leaders to divert the public attention from their at home financial problems. It plays also well for the US since Pakistan, Russia and N. Korea are mentioned in the report. ”
One other Stratfor official allegedly indicated a similar finding.
“Israeli commandos in collaboration with Kurd forces destroyed few underground facilities mainly used for the Iranian defense and nuclear research projects,” he wrote on November 13, 2011. “Even if the Israelis have the capabilities and are ready to attack by air, sea and land, there is no need to attack the nuclear program at this point after the commandos destroyed a significant part of it.”
From: George Friedman
Date: Sat, 20 Feb 2010 09:41:03 -0600
To: Secure List
Subject: Insight–for internal use only–On pain of agony
Internal use only
Some nuggets from meeting:
Kissinger believes that the Israelis are in a panic and will attack Iran. Erdogan has made it clear to him that he plans to break with Israel at some point and reorient toward the Islamic world. He intends to be their leader. Paul Volcker regards the Greek crisis as potentially a mortal blow for the EU. He would
like to see an IMF tranche. He also said that Nicholas Brady is behind both this and the Volcker principles Obama adopted. When I asked Brady how he expects to get the the U.S. to go along with an IMF bailout, he shrugged and said they won’t, but that’s the only choice. Volcker is now doubtful the Euro can survive.
Brady is convinced it will. Kissinger thinks Volcker and Brady are missing the real crisis which is in Iran and potentially Russia. Volcker also says that the Bank of England and the French will go along with the Volcker rules on an international basis–that is returning to a variety of Glass-Steagal. The Japanese will do whatever is said, and in Germany only Deutsche Bank really makes decisions. Sarkozy told him he would come in.
So there may be an international convention on restructuring banks under way–Volcker is pretty careful in what he says and doesn’t promote himself more than the average bear, so this may be the case. Nick Brady thinks so too.
Total confusion on situation in China, but more on Obama. They don’t understand who is running China policy. The decision to meet with the Dalia Lama strikes them as particularly bizarre. But China is the least of the discussion. It is about Greece and Iran. China is kind of an afterthought.
I asked Tim Reed who ran Resolution Trust Corporation during the S&L crisis under Nick Brady whether a new RTC would have been better as a supplement to TARP and he agreed but said that Paulsen was so panicked he wasn’t thinking and Bernaecke and he were just responding.
One sense I’m getting here is that the American elite, along with Europe’s, China’s and just about everyone but Russia’s his suffering from three problems: First, none are really aware of the political pressures on other elites. Second, they completely misunderstand the alienation of the publics, three, except for Volcker, they think this can be handled by the elites among themselves. We have a crisis of the elites, in my view.
I get to hold forth in an hour or so, and I’m going to argue that Iran is going out of control because of the elite crisis. No decision making is going on and the decisions that are being made won’t be supported in the public. The only country that is acting decisively and can do so is Russia.
This is for our own internal use. This must not be published or discussed outside Stratfor.
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Mac McClelland at Mother Jones has another great undercover piece:
“Leave your pride and your personal life at the door,” the lady at the chamber of commerce says, if I want to last as an online warehouse worker.
[…] Speed-walking back to the electro-trauma of the books sector, I wince when I unintentionally imagine the types of Christmas lore that will prevail around my future household. I feel genuinely sorry for any child I might have who ever asks me for anything for Christmas, only to be informed that every time a “Place Order” button rings, a poor person takes four Advil and gets told they suck at their job.
I suppose this is what they were talking about in the radio ad I heard on the way to work, the one that was paid for by a coalition of local businesses, gently begging citizens to buy from them instead of off the internet and warning about the importance of supporting local shops. But if my coworker Brian wants to feed his new baby any of these 24-packs of Plum Organics Apple & Carrot baby food I’ve been picking, he should probably buy them from Amazon, where they cost only $31.16. In my locally owned grocery store, that’s $47.76 worth of sustenance. Even if he finds the time to get in the car to go buy it at a brick-and-mortar Target, where it’d be less convenient but cost about the same as on Amazon, that’d be before sales tax, which physical stores, unlike Amazon, are legally required to charge to help pay for the roads on which Brian’s truck, and more to the point Amazon’s trucks, drive.
How did this happen? Why was Arne Duncan serving on a panel with Michelle Rhee, who’s under investigation by his department?
Richard L. Hyde is one who believes that Mr. Duncan should keep his distance. Last year, Mr. Hyde directed 60 state agents in a nine-month investigation of cheating in the Atlanta public schools. They identified 178 teachers and principals in nearly half of the city’s schools who cheated — 82 of whom confessed. The case they built is so strong that criminal indictments are expected.
Mr. Hyde said that to get witnesses to cooperate in such investigations, they must believe that the political leadership is committed. “I’m shocked that the secretary of education would be fraternizing with someone who could potentially be the target of the investigation,” he said. “The appearance of a conflict of interest is troubling because it can cause the public to lose faith in the investigation.”
In Atlanta, the governor at the time, Sonny Perdue, provided extensive resources for the inquiry and then stayed away. “I purposely kept a very low profile and let investigators do their work,” Mr. Perdue said in an interview.
Gee. You don’t suppose the secretary of education is less than committed to nailing Rhee, do you?
How did we sink to where less than 12 percent of workers are represented by unions? To where the corporate media allows perversely false phrases such as “right to work” to enter the language? More here.
Last week, while working on a documentary about hunger in Michigan, Russ Russell had an experience that left him speechless.
“I was visiting with this family and one of the little boys said he wasn’t going to eat,” said Russell, development director for Forgotten Harvest, a Detroit-based nonprofit that rescues and redistributes fresh food. “He said, ‘Oh, I’m not eating dinner because it’s my brother’s turn tonight. Tomorrow is my night.’”
On Wednesday, state officials charged with helping to meet the needs of Michigan’s poorest and most vulnerable citizens publicly told a much different story. Maura Corrigan, director of Michigan’s Department of Human Services, assured lawmakers that changes to a core social safety-net program — cash welfare assistance — aren’t producing the kind of wide-scale woe critics predicted.
“There hasn’t been an uptick in the food banks; there hasn’t been an uptick in the homeless shelters,” Corrigan told the state’s House Appropriations subcommittee on human services, the Detroit Free Press reported Thursday. “It’s a dog that didn’t bite, as far as we’re concerned.”
Three months after implementing a plan to push many long-term welfare recipients off the state’s rolls, Michigan is deeply divided about its impact. It’s as if Russell and Corrigan are talking about different states.
[…] “You have to wonder if they are asking the right questions, really looking in the right places or if it’s just too early for the problems to show clearly,” said Gilda Jacobs, president and CEO of the Michigan League for Human Services, about Corrigan’s testimony and the impact of the changes to the welfare rolls. “I’m certainly hearing stories.”
Food banks and other agencies that help the needy are reporting a rise in those seeking help. Some of the more than 200 agencies to which Forgotten Harvest, a nonprofit that distributes fresh food, now have 30- to 45-day wait-lists for access to their food programs, Russell said. Forgotten Harvest provided the food for 12 million meals in 2008; if trends from the first two months of this year continue, the agency expects it will need to provide 36- to 40 million meals.
At the Gleaner’s Community Food Bank in Detroit, the agency distributed 22 percent more food between October and January than it did during the same period one year ago, staff said. But it’s unclear how much of the increase can be attributed to safety net program cuts.