July 02, 2012
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The Super-Rich and the Rest of Us
Some Outrageous Facts About Inequality
by PAUL BUCHHEIT
Studying inequality in America reveals some facts that are truly hard to believe. Amidst all the absurdity a few stand out.
1. U.S. companies in total pay a smaller percentage of taxes than the lowest-income 20% of Americans.
Total corporate profits for 2011 were $1.97 trillion. Corporations paid $181 billion in federal taxes (9%) and $40 billion in state taxes (2%), for a total tax burden of 11%. The poorest 20% of American citizens pay 17.4% in federal, state, and local taxes.
2. The high-profit, tax-avoiding tech industry was built on publicly-funded research.
The technology sector has been more dependent on government research and development than any other industry. The U.S. government provided about half of the funding for basic research in technology and communications well into the 1980s. Even today, federal grants support about 60 percent of research performed at universities.
IBM was founded in 1911, Hewlett-Packard in 1947, Intel in 1968, Microsoft in 1975, Apple and Oracle in 1977, Cisco in 1984. All relied on government and military innovations. The more recently incorporated Google, which started in 1996, grew out of the Defense Department’s ARPANET system and the National Science Foundation’s Digital Library Initiative.
The combined 2011 federal tax payment for the eight companies was just 10.6%.