I got an email from the Campaign for America's Future warning about efforts to scam the public on highway funding. It says the scheme is to:
Let corporations bring home the profits that they’ve stashed overseas, and they’ll lend some of it to pay for highways. They dodge the taxes they would otherwise owe. We get to borrow money to pay for our roads.US companies have been avoiding US taxes by keeping much of their money overseas.
Nearly three out of four Fortune 500 companies use overseas tax havens to avoid about $90 billion a year in taxes.So, what Congress may soon be doing is letting big business bring these billions back into the US tax-free, then those businesses will charge us interest to borrow some of the money to maintain safe highways to save lives.
This really angers me. It's not only the general idea, it's also my personal experience.
For a number of years, I worked in one state (which had a higher income tax rate) and lived in a neighboring state (which had a lower tax rate). I did not do this to avoid paying my fair share of taxes. When I got married, my wife had been living in a house with kids just across the state line. I was living in an apartment which wasn't big enough for the family. So, I moved into her house. When it came time to file income taxes, I found I had to file in both states. Since I was living in the state with a lower tax rate, it worked like this: I paid what I owed in my state of residence. Then I had to file a non-resident form for the state in which I worked - and pay that state what I would have paid if I lived there minus the amount I paid in my state of residence. The end result was the total I paid to the two states was the amount that would be charged by the higher tax rate state.
For working people, the tax laws are designed in the "Heads I win, tails you lose" fashion. For big business, it's "Heads business wins, tails working people lose". It would be easy enough to use a similar tax system for business - pay taxes to the country with lower taxes, then pay the US the diffeence between that and the US tax rate. Do that and there's not much benefit for corparations to keep their money elsewhere. Then they might keep all their money here and pay all of their taxes here. Then, we'd have all those extra billions in revenue and wouldn't have to take out loans to save lives.
Let's be clear. What I've written here has nothing to do with raising the corparate tax rate. It has nothing to do with changing corporate tax law to reduce how many deductions they can take. Or anything like that. It's just asking them to pay taxes on all of the income they take in which fits the current qualifications of being taxable income. It just means applying the kinds of tax laws used within the US for working people who live and work in more than one place. It's just asking that the majority of the population not be second class citizens, while the rich get to follow different rules.
The Campaign for America's Future isn't even asking for that. They're not saying big business should have to pay the difference between US and foreign taxes if they leave the money overseas. They're just saying if corporations bring all the money into the US, their tax bill shouldn't be zero. Yet, even that is probably too much to ask of our elected officials. I imagine you'll especially have trouble finding even a handful of Democrats who will say big business should have to follow rules similar to what I had to do.
[Note: While the above diary doesn't advocate a higher corporate tax rate, I see no reason why a corporation with $1 million of taxable income shouldn't pay the same tax rate as would be charged on $1 million of taxable salary income. That is another story - another one which neither party has any interest in.]