No money for food, but $350bn for Apple & friends?
US Uncut protest in Seattle, WA. By Simon Li.
What if your family’s finances were tight, and you had a water bill that you couldn’t afford to pay? What if you had a client who owed you enough to cover the water bill? Would you tell your family they would have to go without water, or would you tell your client to pay up?
While President Barack Obama and Congress are allowing spending plans that take $500 million out of the mouths of hungry kids and another $415 million from local cops, they continue to ignore the $100 billion we lose every year, thanks to corporate tax cheats.
Those tax cheats, which include the likes of Apple and Cisco, are buying up Washington’s best lobbyists to persuade Congress to let them bring back $1 trillion in profits they’ve stashed overseas, and pay just a 5 percent tax rate instead of the statutory 35 percent rate. The corporations are calling this scam the “Win America Campaign,” although this $350 billion giveaway’s only winners are the same corporate tax cheats who continue to bleed our economy dry every year.
Corporate tax holidays may mean higher returns for shareholders, but that certainly doesn’t create jobs. A similar 2004 tax holiday brought back $312 billion from 843 corporations at a reduced tax rate, only to see those benefits go to shareholders despite legislation aimed at preventing that from happening. Instead, those companies bumped up shareholder payouts between 60 and 92 cents for every dollar brought home. In fact, the Congressional Research Service has found that the largest beneficiaries of the tax holiday actually cut jobs in 2005-2006.
All a tax holiday would do is prove to these corporations that it’s profitable for them to continue stashing profits in tropical tax havens. The Win America Campaign would actually push us further into debt if we continued to erode our tax base. It would also mean that smaller U.S. businesses that actually play by the rules would see their taxes raised in order to give big corporations more handouts.
Bringing a trillion dollars back to the United States at just a 5 percent tax rate would cost us billions in lost revenue, which could instead be used for green job training programs for the unemployed, hiring more teachers, rebuilding roads and bridges, or health care. The $350 billion we would lose on a corporate tax holiday could instead reverse any of the numerous drastic budget cuts made to local law enforcement, Medicaid, and the like.
If America’s leaders are actually considering giving corporate tax cheats yet another tax holiday while cutting funding needed to keep government working for the rest of us, we need to seriously reconsider our priorities. These corporations owe it to the people who make them prosperous to be accountable and pay their fair share of taxes like the rest of us already do.
This latest lobbying effort by corporate tax cheats would only encourage more offshoring of jobs and income. If Congress really wants America to win, then Congress has the responsibility to stop the Win America Campaign in its tracks and make these corporate tax cheats pay their fair share.