USA Today on Thursday published a new installment in what is an old, familiar story: Fortune 500 companies raking in billions in profits while paying next to nothing in taxes.
This comes as House Majority Leader Eric Cantor is proclaiming that House Republicans would not entertain raising taxes in exchange for ending the economy-slowing, job-killing federal budget sequester, with its mindless cuts to essential government services.
“Raising taxes” in conservative Republican parlance includes closing tax loopholes and ending corporate tax avoidance schemes if the net result is more revenue to the federal government. In other words, any effort to close the escape hatches corporations and the wealthy use to evade taxes has to be “revenue-neutral.” There’s no asking the one segment of the economy that is doing fantastically well – the top 1 percent and large corporations – to shoulder a fair share of the burden of helping support the uplift of the remaining 99 percent.
We cannot accept these terms of the debate. With all of the gains of economic growth going to the top, and the rest of the economy falling behind, budget negotiators must both end the devastating sequester and end tax evasion schemes in a way that raises revenue for the essential functions of government.
Sign this petition to send a loud, clear message to Congress that we expect those who are doing well in today’s economy to pay their fair share and end their gaming of the tax system. Tell Congress to pass the Stop Tax Haven Abuse Act.
This Senate bill, sponsored by Sens. Carl Levin (D-Mich.), Sheldon Whitehouse (D-R.I.), Mark Begich (D-Alaska), and Jeanne Shaheen (D-N.H.), should be a centerpiece of the budget negotiations. The legislation would take several measures to end the ability of American corporations to escape taxes by laundering profits through offshore subsidiaries. It would also eliminate tax deductions corporations receive when they move domestic operations overseas, and would take away the incentive of American corporations to move intellectual property developed in the United States to offshore entities so that profits on that intellectual property can’t be taxed in the U.S.
“We should close these loopholes on principle,” Levin said recently on the Senate floor. “They are blatantly unfair, and we should end them, regardless of our deficit, regardless of whether sequestration is in effect. But surely, at a time when sequestration is harming families, national security, life-saving research, students and seniors, we should close these loopholes and dedicate the revenue to ending sequestration.”
The schemes targeted by this legislation rob $150 billion a year from taxpayers. That is enough money to pay for all of the federal government’s food assistance programs, Head Start programs, veterans health care programs, and Pell Grants for college students – and still have money left over. The losses due to corporate tax avoidance equal 20 percent of the projected fiscal 2013 federal budget deficit.
The rogues’ gallery of corporations listed by USA Today that pay an effective tax rate of zero percent include such household names as Verizon, MetLife, Public Storage, Seagate Technology and News Corp. A favorite conservative talking point is that the top corporate statutory tax rate is 35 percent, among the highest in the world. The reality is virtually no company pays at that rate; the average is closer to 13 percent, according to the Government Accountability Office, a lower rate than in many industrialized countries.
That’s thanks in part to schemes with names like the “double Irish with a Dutch sandwich,” which companies like Google, Apple, Microsoft and, most recently, Twitter use to keep their American-earned profits out of the hands of American tax collectors – and away from the public programs that support the profitability of these companies.
It is simply unacceptable for Cantor or anyone else to suggest that corporations making record profits can’t be asked to do their share to support the common good, while people who are economically struggling must sacrifice more. Common decency, fairness and the need to shift our political conversation away from budget-cutting to the more urgent priority of growing the economy and creating jobs dictates that there should not be a budget deal that allows the continued abuse of tax havens and avoidance schemes.
Sign our petition to let Congress know that ending tax haven abuse and insisting that corporations pay their fair share has to stay on the negotiation table, regardless of the intransigence of conservative Republicans.