Last week, Reuters reported on a new study detailing how a majority of Fortune 500 companies use offshore tax havens to avoid their full U.S. tax responsibility.
Nobel-prize winning economist Joseph E. Stiglitz tells Bill Moyers that these lucrative tax loopholes are contributing to widening income inequality and hurting economic growth in the U.S.
Yet, the response from some in Congress appears to be doubling down on offshore tax avoidance – pushing to renew offshore tax loopholes as part of an unpaid for “tax extenders” package, and giving full-throated endorsement to the notion of a so-called “repatriation tax holiday,” a patriotic sounding name for what amounts to a “get-out-of-taxes-free” card on profits booked offshore.
Corporate tax dodgers’ apologists often claim that returning offshore profits to the U.S. – even at a severely discounted tax rate – would bring with it new revenue for economy-boosting investments in America.
This week, a new report from the Joint Committee on Taxation, Congress’ non-partisan scorekeeper, threw cold water on that claim. Bloomberg reports that, while a repatriation tax holiday would temporarily return some new revenue to American soil, the Joint Committee on Taxation has concluded that such a move would ultimately cost the U.S. treasury $95.8 billion over the next decade.
For small businesses, corporate offshore tax dodging is a two-headed beast. The first devours resources necessary for economy-boosting investments, while the second breathes fire onto small business competitors who pay their fair share of taxes, unfairly exacerbating the competitive advantage large corporations already enjoy.
Main Street Alliance leader Deb Field, co-owner of Paperjam Press in Portland, Ore., writes in a guest column in the Oregonian:
“I'm proud to pay my fair share of taxes. Most of us realize that it's the price of sustaining our public infrastructure, schools, legal system and other things essential to making America an excellent place to do business. Corporations that take advantage of all America has to offer and then refuse to pay their fair share in taxes are shirking their civic responsibilities.”
Tim Foster, owner of Patriotic Motors in Spokane, WA, sums it up in the Spokesman Review: “Corporations making record profits shouldn’t need tax breaks that are paid for on the backs of hard-working Americans and small businesses.”
If Congress wants to boost the economy, combat widening income inequality, and support small business success, it’s time to cut offshore corporate tax dodging beast off at the head(s).