Epiphany. BIEBER ALERT. US healthcare is evil. Money is state religion, http://wp.me/p1fQnO-1y is required for healthcare, is wealthy elite agenda. Reboot democracy. http://wp.me/s1fQnO-start

Very good point Jon. To give an idea of how sick a 23% profit margin is:

The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others…but not by an inordinate amount.
http://money.cnn.com/2008/04/29/markets/thebuzz/

There’s no explanation short of political corruption for any industry to make money at a rate that makes Exxon and BP look like they’re run by student co-ops by comparison.

I should add that economist Dean Baker has been writing about this issue for years. To excerpt from his wonderful book The Conservative Nanny State (readable at link for free).

In addition to raising the price for people who buy drugs, the higher patent protected price makes many people unable to afford drugs. These people either go without certain drugs or use less than their prescribed dosage because of government patent protection.

The fact that so many people can afford to buy drugs at the free market price, but cannot afford them at the patent protected price, is one of the inefficiencies of the patent system. This cost is known by economists as “deadweight loss.” Economists usually get upset over deadweight losses when they are the result of a 10 percent tariff on pants or a quota on shirts. However, they are generally less troubled by the deadweight losses associated with patent and copyright protection, even when the losses are far more than the losses due to trade protection.

The rip off by pharma puts Barnum to shame and virtually every other rip-off industry. The taxpayers pay a larges proportion of the basic science and then it is just handed over for minor tweaking and patenting.

That said, there is no point in getting our panties in a wad over this as long as the blue dog conservative Obama and crowd are in office.

We’ve known for a long time now what O is. Now we’ve established his price. (I understand his campaign got 900 k from Goldman Sachs. Cheap date.)

Yup, the Obama Administration accepts plastic Mardi Gras beads to sell out Americans so PhRMA can make its billion$ and not pay taxes for years on end (statistics with links on the stream of 226demo). Folks should also be asking about the payoffs to politicians sitting in secret bank accounts.

“Asylum Leakers: UK justice double standards” (reported from London, Feb 26, 2011). Great footage of peaceful protesters including a Col Muammar Gaddafi look-alike.

Video: “Cut Benefits to Bankers, Not Public Services (One Good Cut)” (from PositiveMoneyUK ; UK petition)

Drug R&D is expensive, and would-be John Galts in the laboratory need to be adequately incentivized,
so keep your government hands off of the development of new drugs. Oh, never mind.

P.S. Kinsella Calls Out Big Pharma for “Bad Behavior” That’s Pushing Biotech Ventures “Almost to Point of Extinction”

Any net profit over 5% should be taxed 100%. This won’t kill new ideas America under FDR we built computers, under the much higher taxes of Kennedy we went to the Moon. Under Free Market regulation Reagan the Space Shuttle blew up the Debt went up etc.

…competitive free markets are for suckers…

But but but FREE MARKETS! Free markets enforce the discipline and make companies do what they should or go out of bidness, right? /s

We need to go to the streets. And I think direct the protest at the real enemy, the business MOTU such as pharma, demanding the government act. To protest the government is in someways to go along with the Tea Party anarchists and deflects attention from th e real villains and enemies of the people.

It is not appropriate to commit any medical care including medications to the free market and price on the basis of demand and supply. A person either needs a medication or treatment or not, and whether his condition is rare or not. As civilized people it is our moral obligation to provide care for the ill that is good enough. The current system is not only immoral it is ineffective for most and deteriorating at an alarming pace.

And then they control some artificial amount to be dispensed/sold so they can up the ante on refills….Racket!!

Its telling that Americans spend millions on a healthcare system so pricey many can’t afford the drugs and so effective that illegal immigrants live longer than Americans with insurance.

http://seattletimes.nwsource.com/html/nationworld/2003233307_hispanichealth29.html

Book Salon up with Julie Greicius, Elissa Bassist, and Antonia Crane’s Rumpus Women, Vol I. hosted by Amanda Marcotte

Wait to see what happens on Monday. Lobbyists read Ezra’s blog and they will add their spin in the comments section, usually something fantastical about how one has to consider the huge financial risk involved in drug development.

I once read Ezra’s blog regularly and the funniest thing I see in that post is the comment from Angrybear’s BruceWebb, who once scolded me for being too anti-HCR, saying the same things I was saying two years ago.

I have to tell you…the ripoffs don’t stop there! When you purchase Medicare Part D, you have a benefit of $2840 in drug costs, which doesn’t include the premiums you pay for the coverage. Here is an example…January 2011 plan paid $378.74 for drugs prescribed, patient paid $231.99 for their share. The insurance company then adds those two amounts together to show a “total drug cost” of $610.73, which is then subtracted from $2840. Now you have $2229.27 left in benefits which will be exhausted by the middle of April leaving you to pay 93% of generic costs and the balance of that $610.73 per month cost out of your own wallet while still paying a monthly premium for coverage for the rest of the year or until you reach $4550, which is when catastrophic coverage begins. As if that isn’t bad enough, if they refuse to cover a medicine you take, you pay for ALL of the cost and it is still deducted from the original $2840! The old man had a new diabetes med which wasn’t covered that cost an additional $236.99 a month for 30 pills ($7.90 per pill!). Our doctor advised us to change insurance companies yearly so that they couldn’t refuse to pay for drugs which were prescribed. This is with the improvements made in the health care reform bill, so you can just imagine how it was before that! This is a bill that was passed under the Bush administration and by both political parties. Gives you some idea of how little they value their constituents doesn’t it? They’d all be thrilled if we worked until we dropped dead and then they’d probably use our ashes to pave roads! They have you coming and going!

You don’t understand who the constituents are. The government under Bush and Obama exists to enrich the monopolistic corporations. Pharma is first in line.

This post is exactly right on the mark. The take-over of the American government by corporate interest has in effect created a set of monopolies across a whole range of industries. Libertarians like to glory in the market (though they don`t have any understanding of how markets actually work outside the imaginary world of first-year economics textbooks); what their lying eyes can`t seem to tell them is that we live in a world of increasing monopoly. There are a lot of reasons for this, and it would be a great book to sort them out; but one very powerful one is the power of corporations to bend the laws in their favor so as to reduce competition. The banking monopoly is currently the biggest and most profitable example; but health insurance (state monopolies)is the one the stands out. Big Pharma is another. I pay $18 a month for my lipitor substitute in Canada.

Importing from Canada isn`t the point. The drugs cost as much to produce for Canadian consumers as they do for Americans (virtually nothing). What is more important is going directly after the drug monopolies. But given how much money they can divert from sales reps to lobbyists and campaign funds, it isn`t likely to happen. Monopoly is a businessman`s best friend. The anti-trust department at DOJ is now moribund.

In India it is not uncommon for people in intense pain from illness or injury to throw themselves under a passing truck. Medicaid in my state is whittling away at the list of drugs they will pay for. My former wife recently discovered that a drug she has depended on since sustaining a spinal injury is no longer covered. If the government had already ended the wars, ended the war on drugs, ended corporate welfare and ended tax cuts for the rich I would not complain.

But we need to look at the bright side of our situation where corporate control not only means legal monopolies that force up prices, it also means excess military so as to get those welfare payments from the government for our corporations.

From National Geographic

“Scientists from NASA and a number of other institutions have recently been modeling the effects of a war involving a hundred Hiroshima-level bombs, or 0.03 percent of the world’s current nuclear arsenal, according to National Geographic. The research suggests five million metric tons of black carbon would be swept up into the lowest portion of the atmosphere.
The result, according to NASA climate models, could actually be global cooling.”

so the upcoming nuclear war – Korea – Iran – you chose – is going to save us from Global warming!

Partly “yes of course,” and partly, “Jeezus how could intelligent people be so stupid?” But unfortunately, mostly the latter.

Pharma is NOT a monopoly. At every stage, and in every aspect, competition is intense. To assert otherwise is ignorant.

A patent — in ANY industry — confers a limited monopoly on its holder, for reasons so obvious they’re actually written into the Constitution! No patents, little or no invention, lots more suffering and death. Full stop.

And BTW, thanks to meds, health care is a LOT cheaper and more effective. Could it be more so? Of course, and for a myriad of reasons and in many ways (eg, single-payer). But even with all its imperfection, the system with today’s pharma is an order of magnitude better than without.

Beware of simplistic dump-the-filthy-bathwater solutions. Tinkering and adjustment, yes definitely. Ending ridiculous privilege (eg, no negotiation by Medicare), duh. But revolution? Don’t be an idiot.

~~~ModNote: Welcome to FireDogLake. Best practice: not to call your fellow participants ‘stupid’, ‘ignorant’, ‘idiots’ in your first-ever comment.~~~

I have written to White House, Congress, and Medicare – to question Why my mothers asthma inhaler costs Medicare and US consumers = $320, but the same exact inhaler in Canada = $90, and John Aravosis says in France = about $80.

No one ever responded to me. Think what that savings to Medicare costs would be.

I’m so disgusted that Big Pharma gets away with this in the US Govt.

The Pharma industry may be inordinately profitable. There have been huge and consistent layoffs, R&D has been cut, and business in all the industries associated with R&D is hurting. They may be sitting on cash, but their pipelines are considered pretty empty and their favorite drugs-of-abuse (hard on meds) are getting old. Patents and patentability can be mixed blessings. We have Progestins instead of Progesterone as birth control; one may have side effects, the other not; one may not be ‘patentable’. It does cost a great deal to ‘develop’ a drug. Much of the cost is in the clinical trials. I think the govt. should run these, for a couple of reasons: smaller companies would not be forced to partner with either venture capital or big Pharmas, and companies would have less chance of rigging trials that hide toxicity, as with Tylenol.
A big gripe of monopoly ownership is in publishing, particularly scientific publishing. Even libraries are kept behind a pay-wall. Scientific publishing is an astounding racket: Work which was funded by government, and conducted in tax-free institutions, is owned not by the government, the tax-free institutions, or those who conducted and communicated the work, but by a private enterprise called a publishing house. And we have to pay to see it. This, to me, is the largest impediment to any technological progress.

I don’t know the facts in your mother’s specific case, but for other drugs, it works essentially like this:

The United States pharmaceuticals industry is market-driven. This allows inventors to sell their products for approximately what the public is willing to pay for them (a lot!) and if the drug is popular, recoup their costs (in the $billions) plus handsome profits. The existence of the U.S. market-driven approach provides enormous opportunities for other nations (almost everyone else). Companies are able to make money in other nations by selling at any price above marginal cost (much less than what we pay in the U.S.).

And this is why we CAN’T pay what other nations pay today:
1. drugs cost a fortune to develop whether they are a success or not
2. if the United States did not let market forces drive profits for the drug manufacturers then either
3a. innovation would be curtailed or
3b. other nations would be be required to make up the revenue shortfall by charging higher prices

Essentially, the United States public subsidizes worldwide drug research by paying market prices for successful drugs – which is why comparing prices to Canada, Mexico, France, Indonesia or just about anyone else is flawed.

They have a 23% profit margin. That will need to be reduced.

And that may happen though the mechanism for something like this will be tricky. Tricky at best – at least in a “can realistically happen” sense. This leads to a patch on patch approach as the “unexpecteds” mount.

“We will tax all corporate profits over 10% at a higher rate!” sounds simple enough. Then they use a foreign-based subsidiary of their umbrella corporation to ship them the raw materials they need at a much higher cost so their profits are lower. “Then we’ll just refuse to pay their high prices!” Convincing people to boycott their meds can be difficult politically – and they can always threaten to move their production facilities to more “friendly” environments or raise their costs on mid-price products. “Then we’ll erect trade barriers… increase government research grants for domestic firms… nationalize the pharmaceutical industry!” Yeah… tricky. And it still only covers part of the problem…

When you say, “they have a 23% profit margin”, “they” aren’t a single corporate entity producing all drugs in the United States. If the overall industry profit margin were reduced to say, 15%, through some combination of taxes and reduced government payments, that could cause serious problems for many smaller firms who produce useful drugs that we want – potentially impacting their ability to continue producing quality products.

The same “give me one number to simplify a complex scenario” problem occurs all the time. Unemployment, GDP, the stock market, CPI, foreclosure rates, the list goes on and on.

Dear Bleh. I might be able to accept your point if: the United States were the only country with a profitable, responsive Pharmaceutical industry. We’re not. Other countries don’t issue the absurd patent protections we do, and their industries are robust enough to compete. To use your words: “Full Stop”.
I also might buy that corporate B.S. you spout IF most of the essential research wasn’t done in public universities on MY DIME. I’m a former professor at a State University, and my wife is a Tenured Professor. Just in case you don’t know how it works, Universities do this research, but public funds are limited. So in order to secure adequate monies, researchers are forced to look for non-public funding sources. This means selling patent rights for any medicines developed to drug companies. By no means does the company pay for most of the research, in some cases they get these rights for just a few thousand dollars. With the public funding the lion’s share. We pay the salaries of the researchers and assistants, record keepers, administrators etc, and we help pay for the student’s tuition’s. It’s really a very cozy arrangement, and part of the reason why the Pharma industry is so fabulously profitable in this country.
I’m not going to insult you by suggesting you’re stupid. I’m going to directly impugn your motives: go back to work. GlaxoSmithKline isn’t paying you to come in here and Troll for them.

reply to victorx:

I’m not sure any corporations actually pay taxes, could be a myth they made up. I confess, I’m not concerned with their welfare in the slightest, quite the contrary.

“[Gibson] explains, “I have one dollar in my wallet. That’s more than the combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America. That means somebody is gaming the system.”

Indeed, as politicians are asking ordinary Americans to sacrifice their education, their health, their labor rights, and their wellbeing to tackle budget deficits, some of the world’s richest multinational corporations are getting away with shirking their responsibility and paying nothing. ThinkProgress has assembled a short but far from comprehensive list of these tax dodgers — corporations which have rigged the tax system to their advantage so they can reap huge profits and avoid paying taxes:

[...]”

http://thinkprogress.org/2011/02/26/main-street-tax-cheats/

@transparait -

I’m as much against crony capitalism and sweet-heart deals as anybody. Crony capitalism offends anti-capitalists and (relatively) free market capitalists equally.

I wanted to comment on your earlier post about the 23% net profit margin from the (major) drug industry – which I assume comes from Ezra Klein’s article via Yahoo Finance – along with darkcycle’s comment about university research dollars. There is an excellent article published by the CBO in 2006 that describes the pharmaceutical industry, the nature of its profits, productivity and research, and “what happens to the money they bring in”.

http://www.cbo.gov/ftpdocs/76xx/doc7615/10-02-DrugR-D.pdf

I strongly recommend looking at it though it is a bit of a read (about 65 pages). The CBO gives many insights into the industry and I have listed some of the on-topic conclusions below:

1) the standard metrics for measuring profitability do not apply well to the pharmaceutical industry because so much of their assets are tied up in knowledge gains (thus increasing their assets and reducing their return on assets to “good but not outrageous” profitability). It does not look like Ezra Klein was aware of the CBO report or considered it in his comment and so we may need to reconsider the 23% number.
2) the nature of government supported R&D is generally in basic research (mechanisms for diseases) rather than practical research, conducting clinical trials, and ultimately gaining FDA approval. In this manner, the public gains by having multiple solutions found to the same problem.
3) insurance – particularly Medicare and Medicaid – affects the amount and direction that corporations are willing to invest in medical research.
4) though they are achieving high profits, the drug companies are apparently re-investing enormous amounts of money into further R&D and use internal cash due to the high cost of borrowing money for a risky investment that could take 12 years to come to fruition.

Not mentioned in the CBO piece, but money that is not used to pay of debts, obligations or reinvested in further research comes out in stock dividends which the public has access to (and many people may be invested in without knowing it via their 401k’s).

No patents, little or no invention, lots more suffering and death. Full stop.

“When he was asked in a televised interview who owned the patent to the [polio] vaccine, Salk replied: ‘There is no patent. Could you patent the sun?’”

Translation, Jonas Salk was an f’ing moron and quite possibly history’s greatest monster. Full stop. On the other hand, perhaps you should click through to the Dean Baker book above and go to chapter 4:

Patent monopolies might be a bad mechanism for financing prescription drug research, but we still need to find a way to pay for research, since the market by itself will not be sufficient. There are a number of different ways that research can be supported and in fact already is supported. The federal government already spends more than $30 billion a year supporting bio-medical research, primarily through the National Institutes of Health (NIH). This spending has enjoyed widespread political support, especially from the pharmaceutical industry, which has vigorously pushed for increased spending over the last two decades. (Under the current system, NIH research is effectively a subsidy to the pharmaceutical industry.)…

This alternative system would likely also save consumers and even the government a substantial amount of money. The Center for Medicare and Medicaid Services (CMS) projects that the United States will spend $450 billion on drugs in 2015.13 If these drugs were all available at generic prices, the cost would be approximately 70 percent less, a savings of $310 billion. CMS projects that the government will be spending $190 billion on prescription drugs in 2015. If it could save 70 percent on its prescription drug costs, this would amount to $130 billion in 2015. The government would still be ahead even if it will be spending $50 billion a year in prescription drug research at that point. Consumers would then be saving from both lower taxes and much lower drug prices.

I think we need to expand the public’s grasp of what exactly “Big Government” really consists in.

Big Government is not just expanding Medicaid eligibility “at the expense of taxpayers,” Big Government is also the legislative creation of privatized tollbooths with toll costs that bear little relationship to the cost of doing business.

Populist Repugnants like to talk about “lowering costs” when it comes to heathcare reform, but they have no conceptual grasp on how the government assists private enterprise in inflating the costs that THEY then pay–which is probably more than they pay in taxes:

“What have been lost are the Progressive Era’s two great reforms. First, minimizing the economy’s free lunch of unearned income (e.g., monopolistic privilege and privatization of the public domain in contrast to one’s own labor and enterprise) by taxing absentee property rent and asset-price (“capital”) gains, by keeping natural monopolies in the public domain, and by anti-trust regulation. The aim of progressive economic justice was to prevent exploitation – e.g., charging more than the technologically necessary costs of production and reasonable profits warranted. This aim had a fortuitous byproduct that made the Progressive Era reforms seem likely to conquer the world in a Darwinian evolutionary manner: Minimization of the free lunch of unearned income enabled economies such as the United States to out-compete others that didn’t enact progressive fiscal and financial policy….

We have entered the most oppressive rentier epoch since feudal European times. Instead of providing basic infrastructure services at cost or subsidized rates to lower the national cost structure and thus make it more affordable – and internationally competitive – the economy is being turned into a collection of tollbooths.”

http://www.counterpunch.org/hudson05202009.html
Michael Hudson “The Tollbooth Economy”

Of course, one of the problems is that the costs of healthcare are hidden from the public by layers and layers of extra-governmental bureaucracy. Including the portion of their total compensation that is paid by their employers, washing the costs of everything through healthcare financing companies, and–not least of all– the resulting insanity making dance of negotiation between healthcare providers and the healthcare financing companies that has providers assigning huge price tags to procedures (and prescription drugs) knowing the financing companies will negotiate them down, but which uninsured individuals are forced to pay.

Now that’s another tollbooth, one that compels the healthy into “buying insurance,” thereby funding the very same healthcare financing companies that are driving the insanity in the first place–in order to engage in non-productive rent extraction.

That’s the unbound capitalist state in action. ie., the real meaning of “Big Government” today.

Of course, healthcare financing companies–DON’T call it “insurance”–are pikers in comparison to those finance corporations with their vampire suckers jammed right into the Federal Reserve-US Treasury, which Hudson discusses as well:

“ A second Progressive Era aim was to steer the financial sector so as to fund capital formation. Industrial credit was best achieved in Germany and Central Europe in the decades prior to World War I. But the Allied victory led to the dominance of Anglo-American banking practice, based on loans against property or income streams already in place. Today’s bank credit has become decoupled from capital formation, taking the form mainly of mortgage credit (80 per cent), and loans secured by corporate stock (for mergers, acquisitions and corporate raids) as well as for speculation. The effect is to spur asset-price inflation on credit, in ways that benefit the few at the expense of the economy at large.”

There’s no need for private investors to invest in business, when they can profit off asset bubbles, created in effect by the Federal Reserve and bailed out by the US Treasury when they pop. This means more taxes for Tea Baggers.

It’s killing us on EVERY front, and the government IS doing it.

Here we go. Can’t swing a deat cat without running into more and more Big Government. From today’s news, and straight from the US Treasury itself:

“Geithner takes a leap. He wants US banks to take the lead in these countries’ financial development. His words are worth quoting at length:

“I don’t have any enthusiasm for…trying to shrink the relative importance of the financial system in our economy as a test of reform, because we have to think about the fact that we operate in the broader world…It’s the same thing for Microsoft or anything else. We want US firms to benefit from that…Now, financial firms are different because of the risk, but you can contain that through regulation.”

There are three serious problems with this view. First, Geithner ignores everything that we know about the pattern of financial development around the world. It is very rare for financial systems to develop without major crises. In fact, experience in recent decades confirms what should have been obvious from previous centuries: as countries grow and accumulate savings, they become increasingly prone to financial collapse. Given Geithner’s extensive international crisis-fighting experience at the US Treasury, the International Monetary Fund, and the New York Federal Reserve, his current naiveté on this point is simply stunning.

Second, Geithner assumes that risks at the largest US firms can be contained through regulation, when all our knowledge points directly to the contrary. Even the strongest supporters of the Dodd-Frank reform legislation emphasize that it only went part way towards reducing the incentives for major financial institutions to take big risks.”

http://www.project-syndicate.org/commentary/johnson17/English
Simon Johnson, “Geithner’s Gamble”

Still MORE taxes for Tea Baggers when international bubbles burst and the US banks fail. Bailing out the global casino is definitely Big Government.

Also, where’s my “Third Party”?

“But if Gingrich couldn’t control his hard-line freshman class of 73 members in 1995 — he jokingly referred to them then as “a third party” — it’s hard to imagine how the kinder, gentler Boehner will control his 87 freshmen, many of them lacking government or legislative experience, let alone the gene for compromise.”

http://www.nytimes.com/2011/02/27/opinion/27rich.html?nl=todaysheadlines&emc=tha212
Frank Rich, “Why wouldn’t the Tea Party shut it down?”

Koch brothers, PHARMA, insurance companies, Wall St. It’s all over, we are done. And Glenn and Rush will convince the sheep to vote for it, and be content with getting rid of abortion, affirmative action, EPA, and all those pesky ‘socialism’ things that eat up some chump change out of the federal treasury, Tax cuts for rich people? OMG, why are rich people still paying any taxes at all? We are neck deep in the big Muddy, and all we care about is dropped calls!

I guess my “third party” is still in Greece–they are shutting it down:

“ATHENS, Greece — They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can’t pay. Even doctors are joining in, preventing patients from paying fees at state hospitals.

Some call it civil disobedience. Others a freeloading spirit. Either way, Greece’s “I Won’t Pay” movement has sparked heated debate in a nation reeling from a debt crisis that’s forced the government to take drastic austerity measures – including higher taxes, wage and pension cuts, and price spikes in public services.

What started as a small pressure group of residents outside Athens angered by higher highway tolls has grown into a movement affecting ever more sectors of society – one that many say is being hijacked by left-wing parties keen to ride popular discontent.”

(My, how unconscionable).

http://www.forbes.com/feeds/ap/2011/02/22/general-eu-greece-i-won-apos-t-pay_8319311.html
“I Won’t Pay” movement grips debt-ridden Greece”

“In one of their frequent occupations of the toll booths on the northern outskirts of Athens recently, protesters wore brightly colored vests with “total disobedience” emblazoned across their backs, and chanted: “We won’t pay for their crisis!”"

“We are neck deep in the big Muddy, and all we care about is dropped calls!”

Financial “journalists” care about dropped calls. Not only is it a good way to force ATT-Verizon to lower the cost of their calling plans, but if they keep on talking about Facebook, Google, Apple, Microsoft, and MA Bell’s sclerotic Evil Empire, then maybe we’ll ignore the vampire squid suckers jammed directly in the Fed-Treasury, sucking the big bucks out of the Tea Bagger pocket on the sly.

I know AT&T-Verizon is a bunch of pikers. They wish they were in the financial sector. All they get is retroactive immunity for helping out the effing Big Government.

(Not that that was a good idea).

Question:

Should we give the D-Party “retroactive immunity” for helping out the effing Big Government?

According to GAO 65% of US corporations pay no taxes.

it’s hard to imagine how the kinder, gentler Boehner will control his 87 freshmen, many of them lacking government or legislative experience, let alone the gene for compromise.”
On top of that, some of them are as as dumb as dirt – not just refusing to compromise but to stupid to realise that a compromise exists.

@carver – I’m curious as to where you got this number.

I think this may fall into the wide range of things that are “technically true but completely misleading”. Many corporations – specifically S corporations and partnerships – have their corporate income flow through to their owners or partners as salaries for which they pay personal income rather than corporate income tax.

These (generally) small businesses pay taxes on their income just not under the heading of “corporate income tax”. The 65% number sounds about right for the percentage of S-Corporations and partnerships among companies that are not sole-proprietorships.

An example: you and I both work individually (sole proprietorships – not counted in the corporation lists) as private tutors (you in history, me in mathematics) making about $5,000 per month each in revenue for which we pay personal federal income taxes. As we talk about our expenses, we decide that we could save on costs such as advertising, rent, phone, etc. if we formed a two person partnership. Now we are a VERY small corporation bringing in $10,000 per month as before with two people working there and we are counted as a corporation for purposes listed above. If our partnership were required to pay corporate income taxes and then the remainder given to us as salaries for which we paid personal income taxes, we would be double-taxed – possibly out of existence – and we would never form the partnership in the first place. That might make the percentages look better, but it would unnecessarily increase the cost of doing business and not provide any additional federal tax revenue.