BSP In the News
- The Hill: Frank Knapp, Small business opposes multinational corporations' tax avoidance
- Minimum Wage News at our BUSINESS FOR A FAIR MINIMUM WAGE website
- The Hill: Report: Taxpayers shoulder burden for offshore tax haven use
- Paramus Post (NJ): Offshore Tax Havens Cost Average Taxpayer $1,026 a Year, Small Businesses $3,067
- U.S. PIRG, Sen. Levin, Small Business Leaders Release "Picking up the Tab 2013: Average Citizens and Small Business Owners Pay the Price for Offshore Tax Havens"
- American Forum: Scott Klinger, Half Time at the Federal Budget Super Bowl
- Philadelphia Daily News: Talking Small Biz
- Triple Pundit: Don’t Blame Google and Starbucks For Minimizing Tax Bills
- Roll Call: Time for Plan C - Close the Floodgates on Corporate Tax Dodging
- CFO: Small Biz, the Fiscal Cliff, and the Big, Bad Bank
- Westerly Sun: Business leaders urge change in tax system
- McClatchy Tribune News Service: A plea for tax fairness from small businesses
- UPI: 'Fiscal cliff': Is there a Plan C to avoid tax increases, spending cuts?
- Madison Capital Times: Wisconsin business owners join national call to raise corporate taxes
- Charlotte Observer: Charlotte small business owners urge tax reform
- Politico: 'Revenue-neutral' tax reform takes hit
- National Journal: Sen. Levin, Small Businesses Push for Corporate Tax Hikes
- Washington Post: Sen. Levin wants corporate tax revenue in a fiscal cliff deal
- The Hill: Corporate revenues must be in debt deal
- Accounting Today: Small Business Leaders Urge Closing of Corporate Tax Haven Loopholes
Letter to Congress: No "Repatriation" Tax Holiday for U.S. Multinationals
June 14, 2011
Dear Senators and Representatives,
As business organizations with small business members throughout the United States, we call upon Congress to reject pleas by U.S. multinational corporations for short and long-term tax holidays on profits held offshore, and to instead close the tax loopholes that reward companies for transferring U.S. profits, jobs and investment abroad.
Too many corporations have turned their tax departments into profit centers, using aggressive accounting manipulation to disguise U.S. profits as foreign profits. This is done for the express purpose of avoiding tax payments. Now we find a coalition of corporate tax avoiders demanding a tax holiday in order to bring home the funds they shifted offshore to avoid paying taxes. This proposed “repatriation“ would not be a win for America. It would cost the U.S. Treasury $80 billion according to the Joint Committee on Taxation and increase pressure to cut government spending on services our businesses depend on. We also oppose changing to a territorial tax system, which would accelerate the use of aggressive accounting techniques to shift domestic profits to overseas tax havens, permanently rewarding those who seek to avoid their taxpaying responsibilities.
Bloomberg Business Week recently illustrated examples of this tax avoiding behavior: Forest Laboratories “sells nearly 100 percent of its drugs in the U.S. – and cuts its U.S. taxes dramatically by attributing the bulk of its profits to a law office in Bermuda. … Google reduced its income taxes by $3.1 billion over three years by shifting income to Ireland, then the Netherlands, and ultimately to Bermuda.” We need to stop this irresponsible tax avoidance, which undermines the U.S. economy, and assure that all businesses play by the same tax rules.
There is simply no excuse for repeating a policy that’s a proven failure. In 2004, a corporate “repatriation tax holiday” was passed with the promise of stimulating domestic investment and creating jobs in the United States. Instead, studies showed that the beneficiaries of the tax holiday used their repatriated earnings to give a huge windfall to corporate owners and shareholders – including many CEOs – in the form of stock buybacks and dividends. For example, the National Bureau of Economic Research found that a dollar increase in repatriated earnings “was associated with an increase of almost $1 in payouts to shareholders.” In the wake of the tax holiday, U.S. multinationals eliminated more American jobs and shifted even more income and investment to offshore tax havens.
Corporate taxes, like individual income taxes, support the public services and infrastructure upon which all businesses depend. These include a publicly educated workforce, transportation systems, safe drinking water and sanitation, the judicial system, taxpayer-funded research (which played a crucial role in health advances and the creation of the Internet, for example), federal emergency response and so on. But, the public services and infrastructure underpinning a healthy economy are now being cut dramatically because of inadequate revenues.
When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs. A transparent corporate tax system that assures all companies – large and small – pay for the services upon which our businesses, our customers, our workforce and our communities depend, would help restore the economic vitality and domestic job creation we all seek.
Business for Shared Prosperity
Frank Knapp, Jr.
President and CEO
The South Carolina Small Business Chamber of Commerce
Main Street Alliance
American Sustainable Business Council
American Made Alliance
National Latino Farmers and Ranchers Trade Association
Social Venture Network
Sustainable Business Alliance
Wealth for Common Good
Maine Small Business Coalition