Margot Dorfman: Big business tax holidays are bad for small business, bad for America
The U.S. Women’s Chamber of Commerce strongly opposes legislation in Congress that would reward U.S. multinational corporations with massive, unwarranted tax discounts to bring back hundreds of billions in U.S. profits they shifted offshore to avoid paying taxes in the first place.
So called “Repatriation Tax Holidays” are nothing more than unfair, anti-American giveaways to big businesses that have lobbying and political donor clout in Washington, D.C.
Rewarding big business for anti-American and anti-competitive behavior, which undermines small business, is not the way to lead America back to prosperity and economic leadership. And it’s sure not the way to create American jobs. According to the Bureau of Economic Analysis, between 1999 and 2008, U.S. multinational corporations reduced their domestic employment by 1.9 million jobs; they increased their employment overseas by 2.4 million jobs.
Small businesses care about America, our communities and our families. We care that our government has the funds to keep our roads and transportation working, educators preparing our next generation, and resources to defend our country. We create most of America’s new jobs.
We don’t have millions to spend on lobbyists for the purpose of securing undue and unwarranted favoritism. It is time to end, not extend, the double standard for big businesses, which employ thousands of lobbyists, accountants and attorneys for the purpose of not paying their fair share of U.S. taxes.
To make matters worse, many of these big businesses are profiting from big federal government contracts – contracts paid for by taxpayers. Big businesses receive unfair cost advantages that make it harder for small businesses to compete and win federal contracts. And they systematically rob the United States of tax dollars by shifting their U.S. profits offshore through tax havens and other anti-American tax dodging.
We should not reward this behavior. We should stop it.
Studies have shown that a similar supposedly “one time” 2004 repatriation tax break did not achieve positive results. It did not produce promised U.S. jobs or increased investments in research and development, or reduce our deficit. Instead, big firms paid out more dividends and engaged in stock buy-backs, increased their executive compensation and increased their stockpile of money offshore.
Rather than helping America, another big-business tax holiday will continue to undermine America’s economy and reinforce the offshoring and anti-American tax strategies employed by big multinational firms. The congressional Joint Committee on Taxation has estimated that the tax breaks under consideration would cost the U.S. Treasury nearly $80 billion over ten years.
Big business tax-dodging schemes are grossly unfair to America’s Main Street businesses. We’ve seen the shrinking small business share of business receipts over the last decade. A report published by the U.S. Small Business Administration Office of Advocacy, Development in Women-owned Businesses, found that between 1997 and 2007, publicly-held firms (companies whose stock is publicly traded), which represent only 3 percent of all firms in the U.S., dramatically grew their percent of total business receipts from 55 percent to 64 percent. During this same period, private firms lost a wrenching 9 percent market share.
That was before the economic meltdown, which devastated small business. The continued growth of big business squeezing out revenues-based market share growth has at its roots the many and growing advantages big businesses secure through Congressional influence every year.
Tax breaks, tax havens, tax holidays, bailouts and all the other unwarranted privileges afforded big business must stop. America can’t afford to keep treating Main Street businesses like second-class citizens.
It’s time to restore American values, including holding big business accountable for paying their fair share of taxes to support our domestic economy and infrastructure.
The U.S. Women’s Chamber of Commerce demands that Congress stand up for Main Street American businesses who must compete in a marketplace that is already skewed against us. Our lawmakers should reject a new tax giveaway for big business. They should tell America’s big businesses to stop their tax dodging through offshore tax havens – and just bring the money home!
Margot Dorfman is CEO of the U.S. Women’s Chamber of Commerce™, representing 500,000 members nationwide. A copy of this article previously appeared in The Hill.