Unlike other election years, in which social issues have tended to dominate the discourse, the upcoming election is largely focused around tax law – specifically corporate tax law. As a part of his campaign, independent Vermont Senator Bernie Sanders has been posting “memes” that include pictures of himself alongside memorable quotes.
This one in particular, which depicts Sanders holding an orange microphone, has garnered attention. The text reads, “Want to better understand why we have a federal deficit? In 1952, the corporate income tax accounted for 33 percent of all federal tax revenue. Today, despite record breaking profits, corporate taxes bring in less than 9 percent. It’s time for real tax reform.”
In terms of political efficacy, the meme is right on point. A growing sentiment in America says that the rich should be made to bear a higher tax burden in response to the massive wealth inequality experienced in the post-recession country. Concerns about corporate tax evasion, especially the hot-button issue of corporate inversions, could not be higher.
In short, the statement is sensational. This sensationalism led PolitiFact.com to verify the statement, resulting in a “mostly true” verdict. The Senator’s figures were almost exactly on the money, but two important factors cast doubt on the truth behind the statement’s meaning.
1. PolitiFact.com determined that the year was cherry-picked. In fact, 1952 was the third-highest year in history for corporate tax as a share of GDP, coming at a time when the U.S. was at the top of its game from an industrial perspective. That said, later figures show a smaller, but still significant decline in corporate taxation as a share of GDP.
2. The rise of “pass-through” organizations changed the shape of the corporate taxation landscape. Because of changes in tax rates and rules, many businesses now pass all profits onto shareholders or investors, meaning that no corporate income tax is collected. These shareholders must still pay taxes individually, further skewing the trend away from corporate income tax.
This week Senator Bernie Sanders made the news with this comments on tax reform. As tax attorneys both Frank L. Brunetti and I have written extensively the current state of tax reforms in the U.S. Check out the lastest posts and get the full scoop:
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Monmouth County's Next Development Wave: What Developers and Investors Need to Know
Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]
Are Your Conversations with AI Shielded from Discovery? Courts Are Split
Whether a client’s prompts to a generative AI tool and the documents it produces are protected from disclosure depends on the case type, who claims protection, and whether counsel was involved. In United States v. Heppner, a New York federal judge ruled that a criminal defendant’s communications with an AI platform were protected by neither […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
