Roll Call: Time for Plan C - Close the Floodgates on Corporate Tax Dodging

Op-Ed By Holly Sklar and Scott Klinger
Roll Call, Dec 28, 2012

With President Barack Obama’s Plan A that includes cuts to Social Security benefits and Speaker John A. Boehner’s Plan B that continues tax cuts for most rich Americans, it is time to consider Plan C — closing the costly loopholes that allow U.S. multinational corporations to use accounting tricks to dodge as much as $100 billion in taxes each year.

Bloomberg recently reported, for example, that Google has been using accounting maneuvers to shift $10 billion of profits to tax-free Bermuda ...

America’s small business owners across the political spectrum reject big business attempts to dress up their U.S. profits in Bermuda shorts in order to reduce their tax bills. In a nationwide poll of small business owners earlier this year, 91 percent of those surveyed said it is a problem that U.S. multinational corporations use accounting loopholes to shift their U.S. profits to offshore subsidiaries — often little more than a brass nameplate and a P.O. Box — to avoid taxes.

While U.S. corporate profits are at a 50-year high, U.S. corporate income tax collections as a percent of GDP are at a 50-year low. In 1952, U.S corporate income taxes accounted for 32 percent of the federal government’s revenues; last year this number was less than 8 percent. Corporations want to benefit from America’s market, infrastructure and public services — everything from roads to schools to first responders to taxpayer-funded research; they want others to pay for it.

Unfortunately, President Obama and many members of Congress favor revenue-neutral corporate tax reform, which would make today’s historically low corporate tax contributions permanent, depriving the Treasury of trillions of dollars of corporate tax revenue in the decades to come. The last thing we need is to reward corporations for shifting profits and jobs offshore. ...

Read full op-ed at Roll Call