Jun 21, 2004
The House and the Senate have both approved lowering the tax on corporate profits from 35% to 32%. The Senate bill passed by a vote of 92 to 5, that is with the full support of both the Democrats and Republicans.
The two bills are somewhat different, and the differences still need to be worked out. But they all agree on the essentials – to cut the corporate income tax.
Both bills continues the long term reduction in the tax on corporate profits. In 1965 taxes on corporate profits provided 24% of all money the government took in. In 2003 taxes on profits provided only 10%. During the same period the personal income tax share of all government money stayed about the same at 41%. The big change was in Social Security taxes, which were 19% of all government money in 1965 and more than doubled to 41% in 2003.
But the Social Security tax is sharply regressive, which means that the rich pay a much smaller portion of their income in the tax than workers do. Executives getting million dollar salaries pay only one half of one% of their income in Social Security taxes, while workers pay the full 6.2%. That's because only the first $87,000 a year is taxed – if you earn more, you pay no more tax.
This action in the Congress occurred without much publicity, but it means another multi-billion dollar gift to the owners of the corporations that will be paid for by the rest of the population.