August 1, 2013

Fact Check: Corporate Tax Dodging and the Power of Myth

By William Rice, Americans for Tax Fairness

Business coalitions have been springing up like weeds recently to push for even lower taxes for huge corporations. ACT, LIFT, RATE, TIE: the acronyms are dizzying—and so is the hypocrisy underlying the groups’ efforts. After all, they’re trying to generate popular support for corporate tax cuts that would endanger basic safety net programs like Social Security and Medicare, further widen the nation’s wealth gap, and balloon the deficit.

On top of that, among the corporations complaining about America’s supposedly onerous corporate tax rates are some of the nation’s most aggressive tax dodgers. ACT (Alliance for Competitive Taxation)’s members include Bank of America, DuPont, FedEx, General Electric, Honeywell and Verizon—all of whom have used loopholes in the tax code to avoid their fair share of taxes in recent years.

So it’s not surprising that illogic would creep into ACT’s arguments. On its website’s “Myths vs. Facts” page, we’re told:

FACT:…Since the [United Kingdom] adopted a territorial system [which lowers corporate taxes], it has attracted high-paying jobs, including from large U.S. companies that have moved their headquarter operations to the UK. It is estimated that over 40 U.S. and foreign companies currently are looking to relocate their headquarters to the UK.”

But further down the column we learn:

MYTH: Businesses go abroad to avoid taxes.

Fact and myth will undoubtedly continue to mingle as corporations make their case for ever bigger tax breaks, all paid for by the American people.