After watching the 60 Minutes piece on the corporations this past Sunday it is clear that if we want to have corporate jobs in America in the future we can’t increase taxes (and you know how it hurts me to say this). We are being underbid by every other country in the world, by a lot. Our corporate tax rate is 35%. Companies are locating their headquarters in Switzerland (15% tax rate) or Ireland (12.5% tax rate). These companies aren’t swayed by patriotism or loyalty to America. They have shareholders. Their loyalty is to their bottom line. They say they will lose their shareholder if they don’t follow the lowest tax rates.
Even if we believe that they should have to pay their taxes; that apparently will not happen. They have the best lawyers. There is no way we can pass laws that they cannot figure out how to sidestep. There is no way we can insure that they will have to pay.
So if we think we want our corporations back, if we don’t mind being forced to do something we suspect is counterproductive, then we have to give in to the demands that we lower tax rates for corporations and simplify the tax codes. But we also must remember, 60 Minutes reminds us, that the last time corporations were allowed to bring their profits home without taxes they did not use these taxes for hiring. If we lower corporate taxes and these companies don’t come back, if they then twist our arms again until we deregulate in whatever ways they demand, how stupid will we feel. Wasn’t Ireland one of the PIIGS nations, or European Union countries whose economy was failing? Has the presence of all those corporations in Ireland helped their economy?
Whatever we do it’s “a bitter pill to swallow” and perhaps “we’re damned if we do and damned if we don’t.” Those old clichés sometimes come in real handy.
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