Business is business, but not all businesses are alike. Sure, we all want to make money and see our enterprises thrive. But there are big differences between a multinational corporation on the one hand, and a Main Street store or a midsize firm like my family’s publishing company in Smyrna…and it’s not just the size of our bottom line.
Facing a federal budget crisis—a crisis largely created by declining revenues—the American people understand that the difference that really matters is how much a business contributes to the common good in the form of taxes. And there the differences may surprise (even anger) you.
American businesses, both big and small, enjoy great benefits from our national resources: We all ship our products over the interstate highways, staff our companies and derive innovative ideas from our great public universities, and rely on democratic governments and fair judicial systems for a stable society. So, when we turn a profit, we should all chip in to support those public investments through a fair tax system.
Owners of local restaurants, repair shops, gas stations—and even small publishing houses like mine—follow the same general tax rules as middle-class families, filing a return each year and paying the tax due. But the managers of multibillion-dollar, international corporations have other options, options that often result in stiffing our federal and state governments on their tax bills.
Tax-avoidance methods vary, but they basically amount to a shell game: using accounting tricks to move money around the globe with the click of a mouse, claiming income was produced in places like the Cayman Islands with low or no taxes, even if the corporation’s only presence there is a post office box. Meanwhile, here at home where the real business is done, you and I pick up the tab for the infrastructure to make that business possible. The bottom line is, we are being shortchanged.
And we’re not talking peanuts here. Earlier this month, the respected U.S. Public Interest Research Group (PIRG) reported that offshore tax loopholes (used by both corporations and wealthy individuals) cost the federal government $150 billion a year. State governments suffer, too: Delaware alone lost $220 million last year.
This is money that could be used to hire teachers, fill potholes, or find the next important medical cure. It’s money that would eliminate the need to borrow so much and allow us to pay down our existing debts. It’s a bill that, if the corporations aren’t paying, your family and America’s small businesses are—either in higher taxes, reduced services, or higher debt.
Corporate tax avoiders in recent years have included some of the best-known names in business: General Electric, Bank of America, Boeing, Verizon—even Delaware’s own DuPont. Between 2008 and 2010, according to another report, co-authored by PIRG and Citizens for Tax Justice, these five plus 25 other big corporations (the “Dirty Thirty”) had combined profits of $163 billion, and not only didn’t pay any federal income tax on that profit, but actually received over $10 billion in refunds. DuPont alone made over $10 billion in profit, and got $72 million in refunds.
I’m not anti-business. I couldn’t very well be, since I own one. And I’m not even opposed to big business. I just believe that we should all play by the same rules. And I believe that we shouldn’t raise middle-class and small-business taxes; or cut important public investments like education, health care and highway repair; or go deeper in public debt, all in order to allow huge, profitable corporations to continue to shirk their tax-paying responsibilities.
We deserve better. As Congress debates our national priorities, we deserve corporate tax reform that puts a greater premium on investing in America and less emphasis on investing in the Cayman Islands. Although the “fiscal cliff” is behind us, more federal budget deadlines lie ahead. As representatives of the state with more incorporated businesses than any other, Senators Carper and Coons should lead the way on corporate tax reform, making sure that more tax revenue from our biggest companies is central to any future deficit-reduction deals.
Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.