About 15 Congressional staff and 15 others attended a briefing yesterday at the U.S. Capitol. They were there to learn more about how tax haven abuse by U.S. based multinational corporations is harming our country. The event was sponsored by the FACT (Financial Accountability and Corporate Transparency) coalition.
|Chuck Collins (Institute for Policy Studies), Nick Shaxson
(author of “Treasure Islands”, Rebecca Wilkins (Citizens for
Tax Justice) and Frank Knapp at the front steps of the U.S. Capitol
You might be wondering why a guy representing small businesses in South Carolina is here in such a prestigious building and with such prestigious company.
South Carolinians have a long tradition of concern with being treated fairly. For those of you who know your Revolutionary War history, tax fairness was the issue. A large percentage of the battles were fought in the Palmetto state and it was in the swamps and fields of South Carolina that the war turned in the favor of the colonies.
One hundred and fifty years ago this week, South Carolinians ignited a Civil War because they didn’t think they were being treated fairly by the federal government.
Eleven years ago I and other founded the South Carolina Small Business Chamber of Commerce and one of the reasons was tax unfairness between big and small businesses.
In the past two weeks, my organization has been fighting another fairness issue. Amazon.com insists that they won’t build a distribution center in our state if it isn’t exempted from collecting sales tax on sales to customers in the state.
We oppose this exemption because it would create an unfair competitive advantage for Amazon over our brick-and-mortar and on-line retailers all across the state.
So here we are at tax season and again the issue is tax fairness.
The use of tax havens by U.S. based multinational corporations is clearly unfair to small businesses in South Carolina and across the country.
Multinationals avoiding paying U.S. taxes means that the small CPA firm of the Chairman Emeritus of our chamber competes with H&R Block that pays an effective tax rate of only 12.5 percent.
Multinational corporations avoiding paying U.S. taxes means that another founding board member who started a community bank has to compete against bank of America that paid no U.S. taxes in 2009 and 2010 as well as against Wells Fargo that paid less than zero U.S. taxes in those years because of a tax rebate.
Multinational corporations avoiding paying U.S. taxes means that one of our current board members, who is developing health care information software must compete against GE that, as we know, paid no U.S. taxes last year.
The small businesses that we want to create and are creating the jobs this economy needs should not be competitively disadvantaged to multinational corporations by our own tax law that are clearly unfair.
Beyond the competitive unfairness, small business should not be paying more in taxes for all the services we need from the federal government because multinational corporations are avoiding paying U.S. taxes.
Small business owners might not enjoy paying taxes, but they are very patriotic and are big supporters of fair competition.
Offshoring profits to tax havens is neither patriotic nor competitively fair. More and more small businesses are coming to realize this situation and are raising their voices to call for change.