Corporate profits peaked under President George W. Bush in 2006 near $1.7 trillion. The recession then plunged corporate profits to $1.0 trillion by the 2008 election. (Check that: during the economy's nadir, corporations were still coming out ahead.) Since the election of radical Marxist redistributionist Barack Obama, corporate profits have more than doubled to $2.2 trillion. Hmmm... so Obama hasn't come for your guns or your profits...
...but wait! President Obama is coming for a chunk of the profits that corporations are hiding overseas. Yesterday the President announced a plan to grab half of the funding for his six-year, $478-billion infrastructure investment plan from a one-time, 14% tax on current overseas corporate profits stashed overseas, plus a 19% tax on future overseas profits that opponents say still helps big corporations dodge their fair share of taxes.
Meanwhile, Senator Bernie Hunhoff (D-18/Yankton) would like us South Dakota voters to talk about taxing corporations to fund education. Senate Joint Resolution 2 would place this brief, straightforward proposal for a constitutional amendment on the 2016 general election ballot:
The Legislature shall impose an education franchise tax by imposing a tax on the profits of corporations doing business in South Dakota. However, this section does not apply to any insurance company subject to a tax on gross premiums or financial institution subject to the bank franchise tax. The revenue and interest generated by the tax, less the cost of administration, is dedicated to improving the salaries of elementary and secondary public school teachers. The Legislature shall establish the rate of taxation.
Senator Hunhoff's proposal recognizes that South Dakota already imposes income taxes on bankers and insurers (which taxes have yet to lead to an exodus of bankers and insurers). SJR 2 gives the Legislature control over the tax, allowing it to set the rate based on the economy, the needs of the school districts, whatever may come up each session. SJR 2 goes and gets money that President Obama won't be taking, since U.S. Senators John Thune and Mike Rounds will surely work their darnedest to prevent that federal tax from happening. As is Bernie's wont, SJR 2 comes from a bipartisan team of sponsors, including Senator Hunhoff's Highway 50 neighbor Rep. Ray Ring (D-17/Vermillion) and veteran West River legislators Sen. Bruce Rampelberg (R-30/Rapid City) and Rep. Thomas Brunner (R-29/Nisland). These Republicans can sponsor this bill without saying they are advocating a new tax; they could vote for it and contend that they just want the people to decide if a corporate tax is an appropriate way to raise teacher salaries (which would be a nice counter to the impression their Gettysburg colleague Senator Corey Brown is creating that Republicans don't trust voters).
As I noted Saturday, the richest South Dakotans have been surfing that wave of corporate profits to claim more than 50% of our state's post-recession income growth. The average one-percenter in South Dakota makes 31.7 times as much as the average teacher in South Dakota, a disparity that is higher only in Wyoming, North Dakota, and Connecticut. Don't count the top 1% or earners, and South Dakota teachers still make 21.2% less than the average individual income.
Moving some income from the corporate tier, where profits have doubled since the recession, to the teachers who build the corporate workforce seems just. Let's put SJR 2 on the ballot and debate a corporate profits tax in 2016.