Home » Opinion » Foreign Views
Big US corporations must pay their fair share of taxes
Print Edition
PRESIDENT Obama is right to address the urgent need to modernize our once grand infrastructure. Unfortunately, the presidentÕs corporate tax reforms would leave us in a deeper hole down the road.
The PresidentÕs plan to cut corporate tax rates responds to the tireless mantra of US multinational corporations that AmericaÕs tax rates hurt their global competitiveness. In reality, American corporations are enjoying their highest level of profits in 60 years while their federal income taxes are close to the lowest level.
The Government Accountability Office recently reported that large profitable US corporations paid an effective federal tax rate of just 12.6 percent in 2010, a rate lower than many small businesses and middle-class families.
Large corporations like Pfizer, Bank of America and Google have avoided paying their fair share of US taxes by abusing offshore tax havens and using accounting gimmicks to disguise US profits as foreign profits.
US corporations are holding about US$2 trillion offshore to shield it from US taxation. These corporations have gamed the tax system, contributing mightily to the deficit while leaving small businesses and households to pick up a greater share of the cost of public services and infrastructure Ñ from schools and police to roads and safe drinking water.
While the details arenÕt clear, the PresidentÕs plan includes a one-time fee on offshore profits — much lower than the regular corporate tax rate — that he wants to use for investing in our country’s aging infrastructure and other priorities. Small businesses applaud increased investment in bridges, ports and other needed infrastructure that will also create jobs and put money on Main Street.
However, history shows that rewarding corporate tax dodgers with hundreds of billions of dollars in tax breaks — as happened with the 2004 tax holiday that promised job creation and delivered a windfall to CEOs and shareholders instead — only accelerates tax haven abuse in the future.
Ending corporate tax dodging is not a Republican issue or a Democratic issue; it’s an American issue.
Whether called a one-time fee or a tax holiday, a corporate tax amnesty policy is completely unacceptable to small businesses.
The President could close offshore tax loopholes without temporarily or permanently cutting corporate tax rates through a number of bills currently pending in Congress.
Moreover, lobbyists who could not prevent the top-bracket Bush tax cuts from being reversed are saying that the President’s plan for reducing corporate tax rates to 28 percent, with a lower 25 percent rate for manufacturers, should be accompanied by a reduction in top tax rates for individuals in order to be fair to small business owners.
This is another effort to use middle-class small business owners as a foil to help hedge fund managers, wealthy lawyers and big businesses.
Tax reform should be about building a vibrant 21st century economy for all businesses, not rewarding big corporations for free loading on the rest of us.
Knapp is the president and CEO of the South Carolina Small Business Chamber of Commerce and co-chair of the American Sustainable Business Council Action Fund. Copyright: American Forum.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
