The urge to “soak the rich” can sometimes override common sense.
A report by the Government Accountability Office says most of the 100 biggest corporations in the United States have subsidiaries in countries with very low taxes. While there are many reasons a company may have overseas businesses, some undoubtedly use the subsidiaries to shield earnings from taxation.
That angers some lawmakers, including Sen. Byron Dorgan, D-N.D. In an Associated Press article on the report, he went so far as to call some companies that used offshore tax havens “tax dodgers.” But news accounts did not claim that the companies had illegally evaded their tax liabilities. Apparently, they simply sought to minimize their taxes — just as individuals use legal exemptions and deductions to reduce their tax bills.
Also troubling to critics is the fact that some American companies that have saved tax dollars by having subsidiaries in low-tax countries have gotten federal bailout money.
We are not fond of bailouts, but we have to wonder what the critics would have the companies do. If Congress suddenly forbids foreign tax shelters and a corporation’s tax burden grows by millions of dollars, that clearly would not reduce its need for a bailout. To the contrary, it would be in even worse financial condition and crying out for more help.
High U.S. taxes are why corporations try to shelter income in the first place. Punishing them with still higher taxes will not help them create jobs or grow our economy.
That doesn’t mean the complex U.S. tax code shouldn’t be simplified. It should. But so long as companies are using legal means to reduce their tax bills, it’s hard to blame them.
The mega-wealthy have always made their bucks on the backs of struggling workers. The reason companies decided to hightail it to India and China is because they could buck human rights laws, work people under conditions not allowed in this country and pay them pennies on the dollar. At the same time, they had no concern about the plight of their loyal workers in this country and the decimation of our manufacturing base here. As we are seeing the fruits of this greedy practice, now our country is falling like a house of cards while greedy execs still sit on piles of dough and think of reasons they shouldn't have to pay up their taxes. I have no compassion for them and neither should any citizen in this country. It's time we have laws and services to support individual taxpayers and corporations should grow a conscience about the merit of their workers instead of the size of their wallets.
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