ATF Ally The Main Street Alliance placed the following op-ed in The Des Moines Register. ReShinda Young wrote: “Some big corporations put off paying billions of dollars in U.S. taxes and they’ll keep on doing it unless we reform the system and demand they pay what they owe.”
With our envelopes signed, sealed, and in the mail we can all breathe a sigh of relief that another tax season has passed, and our responsibilities have been met. That is unless you have made it your business to dodge your taxes indefinitely. Some big corporations put off paying hundreds of billions of dollars in U.S. taxes and they’ll keep on doing it unless we reform the system and demand they pay what they owe.
American corporations are liable for U.S. taxes on all their profits, no matter where in the world those earnings were made. (They get a credit equal to any foreign taxes paid.) But a loophole in the law known as “deferral” allows them to avoid actually paying the bill on offshore earnings until they bring that money back to the United States.
With an incentive like that, it’s little wonder American corporations have stored up more and more earnings overseas — a staggering $2.4 trillion, according to the latest estimate by Citizens for Tax Justice. The unpaid tax bill is a similarly staggering $700 billion. That’s U.S. taxes they already owe but chose not to pay.
The really big offshore tax dodgers are an exclusive group. Apple, alone, owes $61 billion in U.S. taxes. Drug giant Pfizer’s unpaid tax bill is $35 billion. Microsoft owes $34 billion.
Even though corporations field an army of lobbyists to create and defend loopholes like deferral, reform is still possible. In early April, the Obama administration issued new rules that make it harder and less profitable for U.S. companies to dodge their taxes simply by adopting an overseas mailing address. The biggest such offshore-relocation tax-dodge ever proposed, under which Pfizer would have zeroed out its $35 billion tax bill, was prevented by these timely rules changes.
Now Congress has to get on the ball and put an end to deferral. Not only does fairness require corporations pay their taxes every year like the rest of us, but those huge unpaid corporate tax bills, if collected, could make a real difference in all our lives.
As a young entrepreneur, I’m sometimes asked to speak to classrooms of children. While I hope my story is inspiring, what I learn from my school visits is just the opposite: vital programs ranging from physical education to art are being cut because of a lack of funding.
And when I hear my family members and friends who are in the health profession talk about their day at the hospital, they aren’t discussing new cures or treatments. It’s often about how patients’ options were limited by inadequate insurance. The Affordable Care Act has improved our nation’s health care system, but we still need greater public investment.
My store supports many fundraisers for education and other worthy causes, but there’s only so much private charity can do.
Corporate tax dodging is a triple whammy for small business owners like me. First of all, along with all other taxpaying citizens, we have to fill the gaps when corporations avoid paying their fair share. That means paying more ourselves, suffering inferior services, watching the national debt climb — or some unfortunate combination of those options.
Next, inadequate public revenue from big companies spells trouble for small business. For example, kids emerge from underfunded schools unprepared for work, and business districts deteriorate from lack of infrastructure repair and maintenance.
Last, but far from least, tax-dodging multinationals get yet another unneeded financial edge on Main Street entrepreneurs who dutifully pay their taxes every year. No bag of corporate mass-produced popcorn can match my shop’s Heavenly Crunch, but we should all be playing by the same rules. Public policy — including tax policy — should even up the odds between the big and small economic players, not make them longer.
Our senior U.S. senator, Chuck Grassley, is a high-ranking member of the tax-writing Finance Committee. Iowans like me who object to big corporations with huge offshore profits sitting out Tax Day this year and every year should let him know. It’s time to end deferral, collect the $700 billion big corporations owe us and take away their incentive to keep piling up profits overseas.
ReShonda Young is founder and co-owner of Popcorn Heaven in Waterloo and she sits on the National Executive Committee of the Main Street Alliance.