The 50-year swindle.

• Author: Bagdikian, Ben
• Position: Corporate income tax

The Enron scandal is simply a case of the big guys making it easier to dramatize the bag of tricks that hundreds of members of the Fortune 500 dip into all the time. As far as mainstream media were concerned, these, by and large, were arcane matters of international trade and finance--nothing to worry the citizenry about. But when reports surfaced that Enron did not pay corporate income taxes in four of the last five years, suddenly The New York Times managed to put on page one a story noting that a "growing percentage of large companies pay no income taxes."

If Secretary of the Treasury Paul O'Neill has his way, that percentage will grow to 100 percent, since he favors abolishing corporate income taxes. What would this mean for average American taxpayers? Simple, he says. The ordinary taxpayers would make the usual payments. On top of that, they would pay what would have been the corporations' taxes. Continuing to tax corporations, O'Neill told the Financial Times, is "an abomination."

O'Neill's candor is almost touching. "Abolishing the corporate tax would inevitably lead to higher personal income tax," the Financial Times of London reported on May 20, 2001, after interviewing him, "but Mr. O'Neill believes such a move would reduce the overall tax burden and promote economic growth."

His absolutist vision sounds radical, but it really isn't. It is merely the logical last step in a fifty-year process of successful corporate lobbying. Year by year during the last half of the twentieth century, Congress and the Internal Revenue Service have shifted the national tax burden away from corporations and onto the backs of individuals and families.

The numbers are painfully simple. After World War II, corporations and individuals carried the tax burden together. Year by year, this has been altered until the corporate-individual split is now closer to 20-to-80--and guess who pays the 80 percent?

In 1953, if you count only income taxes, not various other excises, sales taxes, and special duties, individuals and families paid 59 percent of federal revenues and corporations 41 percent, according to The Statistical Abstract of the United States. By the latest confirmed figures in the Abstract, the corporate share has dropped from 41 to 20 percent, while that of individuals has increased from 59 to 80 percent.

Part of the fifty-year stealth attack has been the compression of the progressive income tax brackets. Today there is the smallest difference in our income tax history between the rates paid by unrich individuals and those paid by corporations and the wealthy. Until the Reagan Administration, the top rate had been 70 percent. Reagan got the official top rate down to 50 percent. The top rate is now 39.6 percent, but like the top bracket historically, those individuals and corporations rich enough to be in that bracket seldom pay that rate because they can afford the most skilled...