Monday, May 23, 2011

In This Economy Do We Really Need MORE Corporate Tax Breaks?

As discussed in the first article in this Blog, various media reports have noted that even though U.S. corporations are riding a wave of record profits and can afford to pay huge executive bonuses that are the envy of business executives around the world, the Ryan Budget would cut the corporate tax rates from 35% to 25%.  Surprisingly, there is some bipartisan support for the proposal even though President Obama and Congressional Democrats want to see a lower percentage reduction.

Supporters argue that the tax rate cuts would be offset by eliminating other unspecified U.S. tax code loopholes and tax breaks.  However, corporate lobbyists are certain to fight for the retention of their hard-fought tax breaks, so at a minimum that would be a long, hard-fought battle.
Corporate lobbyists have continued to claim that they pay an unfair share of taxes, but studies have shown that while in 1952 nearly one-third of all Federal taxes came from corporations.  By 2010, that share had dropped to just 8.9%. 

Congress has been very generous to corporations over the past 25 years.  Even at the 35percent rate, profits have continued to rise as result of tax credits that rarely fulfill their promises about stimulating economic growth, as well as tax loopholes and other laws that enable corporations to shelter earnings from abroad.

Many Democrats want to eliminate tax loopholes, but they want the savings to go to reducing the national budget deficit, not lower the corporate tax rates.  Progressive tax reform think tanks believe that the public and advocates for seniors, poor and low-income families, and people with disabilities must step up the fight for eliminating the loopholes to counter Republican plans to reduce the deficit by cutting Medicare, Social Security, and other entitlement programs.

Holy Guacamole! U.S. Supreme Court Denies Appeal by Chipotle Mexican Grill on Disability Access Lawsuit

On April 18th, the United States Supreme Court turned away an appeal filed by the Chipotle Mexican Grill Corporation after a Federal Appellate Court ruled that a 4-foot barrier in a waiting line in their restaurant design denied wheelchair users the right to see the food that they were ordering.  The appellate court found that the barrier “subjects disabled customers to a disadvantage that non-disabled customers do not suffer” in violation of the ADA. 

The plaintiff in the lawsuit that was originally filed in 2005 argued that the barrier he encountered in two San Diego area restaurants blocked his view of the counter, the purpose of which is to allow customers to inspect and watch every order they place.  The restaurants claimed that for purpose of ADA compliance they accommodated wheelchair users by bringing them spoonfuls of their preferred dish for inspection.  The appellate court had dismissed that purported “accommodation” and ruled that it did not match a customer’s personal participation in the selection and preparation of their food order.
The U.S. Supreme Court denied the appeal without any comment.  The corporation headquarters did not issue a press release.  A spokesperson said that they were retrofitting restaurants with a new counter design that makes the ordering process fully accessible.

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