Reveals Strong Bipartisan Opposition to Corporate Tax Loopholes
First Poll on Overseas Tax Haven Reforms Finds Rejection of “Territorial” Tax System
April 9, 2013, Washington, D.C. – Small business owners oppose the current system for taxing U.S.-based multinational corporations, according to a new poll. The national scientific poll released today by the American Sustainable Business Council (ASBC) and the Main Street Alliance (MSA) – two national business policy groups – shows that support for reform is bipartisan and widespread.
This new poll is the first to query small business owners on specific policies for addressing overseas corporate tax havens.
Current tax law enables companies to defer indefinitely taxes on profits earned overseas. The ASBC-MSA poll tested three possible reforms: ending deferral, instituting a territorial system, and establishing combined reporting. The report of poll results may be found here: http://asbcouncil.org/sites/default/files/library/docs/MSA_ASBC_poll_reportTaxesApril2013
Key findings from the survey include:
· More than four out of five small business owners (85%) oppose a territorial tax system, which would permanently exempt offshore profits from U.S. taxation.Across party affiliation, 67% or more are strongly opposed to the proposal.
· 76% of small business owners support closing overseas tax loopholes by implementing a unitary combined reporting system, which would limit the ability of corporations to avoid taxes by shifting profits offshore. A majority (55%) are strongly supportive.
· 64% support ending deferral, a provision of current tax code that allows corporations to indefinitely defer payment of U.S. taxes on profits made or shifted offshore. Across parties at least 62% support this idea.
· By a margin of more than two to one, small business owners prefer to close corporate tax loopholes rather than cut government programs. Both Democratic and Republican small business owners preferred closing loopholes to cutting spending on education, infrastructure or defense.
· Respondents in the survey were politically diverse, with a strong plurality of Republicans or Independents who lean Republican: 47% identified as Republican or Independent-leaning Republican; 27% as Democratic or Independent-leaning Democratic; and 26% as Independent or other.
“I’m not afraid as a small business to compete with the big boys,” said Henry Passapera, a member of the Main Street Alliance and the co-owner of P&R Trading, an international supplier of airline parts and equipment based in East Rutherford, New Jersey. “But when big corporations use offshore tax havens to avoid their tax responsibility, it puts small businesses like mine at a competitive disadvantage. If you want to fly the American flag at your corporate headquarters, you ought to pay your fair share of taxes.”
“All businesses are hurt when we allow tax loopholes for big companies while cutting budgets for public education, research and infrastructure,“ said Josh Knauer, a business leader in ASBC and President and CEO of Rhiza Labs, a Pittsburgh-based software company. “Tax dollars were a vital component in America’s past innovations and infrastructure, fostering economic success. The taxes we pay, wisely invested, are the down payments on our future success.”
“Policy makers now have poll data showing that small business owners are strongly against instituting a territorial system, which would make permanent the broken tax system we have now,” said Scott Klinger, Tax Policy Director for ASBC. “Corporate income taxes as a share of the economy are at a 60-year low, and many U.S. multinational corporations pay higher taxes in foreign nations than they do here. So the last thing we should do is lock in an unearned, anticompetitive deal that will hurt the economy as a whole.”
“Small business owners see two problems with the current system for taxing U.S. multinationals,” said Joshua Welter, Director of Special Projects for MSA. “First, they know we can’t afford these loopholes, since the reduced revenue forces cuts in economy boosting investments, such as education, Social Security and Medicare. Second, the overseas tax structure is a big thumb on the scale for big companies, and a thumb at the nose of small business.”
To view the full survey results, visit: http://asbcouncil.org/sites/default/files/library/docs/MSA_ASBC_poll_reportTaxesApril2013
Poll results reported here represent findings from a scientific national phone survey of 515 owners of small businesses (with 2 to 99 employees), commissioned by the American Sustainable Business Council and the Main Street Alliance and conducted by Lake Research Partners. The nationwide live phone survey was conducted between March 14-25, 2013. It has a margin of error of +/- 4.4%.
The Main Street Alliance is a national network of state-based small business coalitions. MSA and its state affiliates create opportunities for small business owners to speak for themselves on issues that impact their businesses and local economies. www.mainstreetalliance.org
The American Sustainable Business Council and its member organizations represent more than 165,000 businesses nationwide, and more than 300,000 entrepreneurs, executives, managers, and investors. ASBC informs and engages policy makers and the public about the need and opportunities for building a vibrant and sustainable economy. www.asbcouncil.org