Guest AuthorForcing corporations to pay what they owe can be a tough job. But when I worked in the insurance business and was responsible for getting a corporation to provide compensation for causing an accident or injury, I always collected.
That’s why I’m disappointed some politicians in Washington are talking about giving up on collecting all the taxes due on the $2 trillion in corporate profits stashed offshore. It’s time to make corporations accountable for their responsibilities. They should pay what they owe.
A plan is afoot to charge corporations less than half the normal 35 percent tax rate and use the revenue to replenish a depleted federal transportation fund. Depending on the size of the tax break agreed on — President Obama has suggested going down to 14 percent, congressional Republicans want to go much lower — the American people could give up nearly $400 billion in potential revenue. That’s money we could use to repair roads, bridges and transit systems, and attend to lots of other public needs as well.
We’ve got to stop letting corporations off the hook. Florida certainly needs its share of any renewed federal highway funding, but one of the reasons traffic is so bad along the Interstate 4 corridor is that homebuilding companies don’t install the infrastructure that’s required to support new developments. Then, nobody holds them accountable.
A good place to start demanding corporate responsibility is by having companies pay their taxes, in full and on time. The reason $2.1 trillion has accumulated offshore is that a loophole called “deferral” allows U.S. multinational corporations to delay paying taxes on overseas profits until they bring the money home, which they often never do. After subtracting a credit for any foreign taxes paid, there is $600 billion in uncollected U.S. corporate taxes sitting offshore.
Those tax dodgers are trying to duck out of their responsibilities as American corporations.
They insist the problem is that the official U.S. corporate tax rate of 35 percent is too high. But hardly any companies actually pay it.
The multinationals with all the offshore profits have paid only about six percent on them—and that money goes exclusively to foreign countries. Here in America, loopholes reduce the actual taxes paid to a fraction of what’s on the books. Corporations paid just 13 percent in one recent year, according to a congressional report.
Then there are the worst offenders: huge, profitable corporations able to game the system so effectively that they wind up paying nothing, or even getting refunds. Over a recent five-year stretch, the list of corporations with a zero federal income tax bill includes Priceline.com, Verizon and General Electric, according to Citizens for Tax Justice.
If corporations paid their fair share instead of dodging their taxes, we could accomplish a lot. Take just one problem: homelessness. I doubt there’s a wooded patch in Central Florida without an encampment, and if you drive past rent-by-the-week motels on weekday mornings, you’ll see dozens of kids from homeless families waiting for the school bus. Florida could certainly use more financial resources to help address this problem.
The truth is that it’s not even in the long-term interests of corporations to allow American communities to deteriorate like that. But corporations rarely look beyond the next profit report. They see their responsibility as only to their shareholders, not to their country. But they should pay what they owe in taxes.
I have some experience with short-term corporate thinking. When I worked in the insurance business, every claim was considered fraudulent until proven otherwise. Many innocent people suffered as a consequence. Because those people weren’t shareholders of the company, they didn’t matter.
Our political leaders should stop listening to the complaints of big corporations about a tax rate almost none of them pay. Instead, lawmakers should hold corporations accountable and collect the taxes they owe. As a member of the Senate Finance Committee, Florida’s U.S. Sen. Bill Nelson is in a good position to make that case for us in Washington. He can be a leader in demanding corporate responsibility.
Paul Heroux, recently retired, owned his own home repair business serving Central Florida and is a member of the Main Street Alliance of Florida. Column courtesy of Context Florida.
