In similar paint-by-numbers fashion, the Biden White House is flogging studies by liberal think tanks highlighting how many major corporations have avoided paying any income taxes in recent years. For example, the Institute on Taxation and Economic Policy estimated that at least 55 profitable companies (including Nike, Salesforce and FedEx) took a tax holiday in 2020.
What these ritualistic exchanges obscure is how much consensus there is over corporation taxation. The difference between the current 21 percent and Biden’s advocacy of 28 percent is relatively small. And, already, West Virginia Sen. Joe Manchin — the most important swing voter in America — wants to split the difference at 25 percent.
It is also significant that Treasury Secretary Janet Yellen has just proposed a global minimum corporate tax rate. This effort to create international unity on corporate taxation, as quixotic as it may be, reflects an awareness of GOP arguments that too high a corporate rate undermines U.S. competitiveness on a world stage.
But politics in 2021 is too toxic to easily compromise on anything. Everything becomes reduced to a naked struggle for power masquerading as principled differences on the issues.
New thinking needed
As a center-left columnist, my predilection is to believe that current corporate rates are too low. I will also admit that in any protracted debate, I would resort to the shorthand that economists who agree with me are always right and those who disagree are always wrong.