The House tax bill’s a gift to companies that offshore profits and jobs
Gary Kalman | 11/23/2017, 6 a.m.
The bill sponsors say they are ridding the tax code of loopholes but, according to the text of the bill, oil, gas, and mining companies are exempt from even the 10 percent tax on extraordinary profits. They get a free pass. Banks and financial services are exempt as well. Apple, perhaps the most well-known and largest tax dodger, would get a free pass on its tax avoidance practices in Ireland and additionally be incentivized to move operations offshore.
In addition to complicating the tax code and incentivizing offshoring, the impact of these changes will further disadvantage small businesses and wholly domestic companies. Main street businesses do not — cannot — offshore their profits and play the games. Large businesses have built-in advantages such as bulk purchasing discounts and cheaper access to capital. They are inherent in a free market, and small business owners knew about those when they made the decision to open a business. But when government puts its thumb on the scale of big over small, that is an unfair advantage and one we should not accept.
All of this raises some basic questions: Why are we favoring foreign profits over domestic profits? And why are we incentivizing companies to move operations offshore?
The reality of the House tax bill does match the rhetoric used in selling it. We should reject this bill and work to close the offshore loopholes, stop the gaming, and ensure a fair and level playing field.
Gary Kalman, is the Executive Director at The FACT Coalition, a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system.