Pundits and economists both agree that if Congress doesn’t act, the “fiscal cliff” could cripple our economy. Closing offshore corporate tax loopholes is the practical solution to this looming “fiscal cliff” that members of both parties, and their constituencies, should be able to agree on.
Corporate tax dodging places an unfair economic burden on the American public and small businesses, and closing these loopholes would generate greatly needed revenue for the new year.
Each year, 83 out of America’s top 100 corporations avoid paying an estimated $150 billion in taxes by using armies of tax attorneys to hide their American-made profits in bank accounts and shell corporations just off our coasts. American companies like Wal-Mart, Coca Cola, Pfizer – which benefit from our educated workforce, infrastructure, and security – keep more than 70 percent of their cash offshore. Some of America’s largest, most profitable corporations even made money off our tax code between by avoiding taxes altogether and receiving tax rebates from the government!
$150 billion is not chump change. With that money, we could more than make up for the $109 billion of spending cuts set to take affect in January. We could build and staff the first manned outpost on the moon. We could achieve 37.5 percent of the $4 trillion debt reduction goal. Or, we could give a tax cut of $1,068 to every taxpaying American.
Here’s the point: When corporations exploit offshore tax loopholes, the rest of us are left to pick up the tab through cuts to spending, more debt, and higher taxes. Right now, this kind of tax dodging is perfectly legal, but it’s unfair and, quite frankly, wasteful. That lost revenue could be better spent on any number of public priorities.
There are some tough budget decisions ahead, but this should be an easy one: Close the offshore tax loopholes that provide tax-free havens for American corporations.