Small domestic firms protest that the tax incentives benefit mainly the larger firms or multi-state corporations. They said that the small firms are treated disproportionately by business tax structures at the local level as well as state level also.
If we look at the U.S. from the year 2008 to the year 2010, the most profitable U.S. corporations sheltered half of their profits from taxes. And they are thankful for the tax subsidies totaling nearly 4224 billion, this is according to the analyses of Citizens for Tax Justice in the year 2011.
Many of the large companies including Boeing, Exxon-Mobil, and General Electric, procured $175 billion in profits, but the amazing thing is that their combined tax rate was negative 1.4 percent. Well, these large corporations should thankful to the subsidies which they acquire about $64 billion from oil depletion allowances and from wire-offs from overseas profits and other loopholes.
But all these subsidies didn’t just come by an accident or a good fortune. According to a study at least 30, Fortune 500 firms pay their lobbyists more than they pay in taxes. And that is the bad luck of the small firms that most of the small firms can’t even afford lobbyists. So, there is nothing to hide that the benefits of tax incentives flow mainly to Wall Street (large firms), no Main Street (small firms).
And the larger firms must be thankful for these incentives because no major company pays the full federal corporate tax rate of 35 percent. The highest three-year usual rate paid by any of the 12 large organizations in the Citizens for Tax Justice Study was 14.2 percent. And this rate is less than many of the small firms.
This is the fact that the starters must bear more of the cost of national defense, healthcare, and the other necessary programs when the organizations shrink billions of dollars in federal taxes. So the effect of state-local incentives has different effects on large firms and small firms. The small business also pays the price for corporate assistances.