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:
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
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!
