Commentary: Offshore loopholes unfair to small businesses
I run Craftsman House Gallery & Café in St. Petersburg. As a small-business owner, I’m proud to support my community and my country by paying my fair share in taxes.
It’s distressing to me, however, that many of our country’s multinational corporate giants don’t feel the same way. Some don’t pay any taxes, while others pay a fraction of them. How is it fair that the wealthiest corporations don’t pay taxes while many small business owners on Main Street struggle to survive?
I recently returned from a trip to our nation’s capital, where I joined small-business owners from across the country to ask our elected leaders why only some businesses are expected to pay their fair share in taxes. I was pleased to speak with a number of our Florida delegation, including Congressman Patrick Murphy, Congresswoman Kathy Castor and aides of Sen. Bill Nelson.
I told them that whatever they think about taxes, there should not be loopholes that let large multinationals book their profits to tax havens like the Cayman Islands, where they pay no taxes. It’s outrageous that there is a single building in the Cayman Islands that is home to nearly 19,000 “corporations.” We should be able to agree that all businesses — large and small — should compete on a level playing field.
Tax-haven loopholes cost an estimated $90 billion in lost revenue each year, and every dollar corporations avoid in taxes means another dollar paid by someone like me. It also means more cuts to public programs and investments that help make America a good place to do business. Large multinationals get all the benefits of American infrastructure, security and education, but force the rest of us to foot the bill. No one — least of all a wildly profitable company like GE — should get a free ride.
I hope that my representatives take what I said to heart. If they do, they’ll soon have a chance to prove it as they consider renewing two offshore tax breaks: the “active financing exception” and “controlled foreign corporation look through rule.” These ridiculous loopholes will be gone from the tax code if Congress takes no action.
I was disappointed to find out that the Senate Finance Committee — where our own Sen. Nelson serves — caved to special interest pressure by extending these loopholes. Even though the corporate lobbyists won the first round, our elected leaders can still stand up for small business owners.
Our elected leaders should focus on a fixing the tax code so that small businesses don’t face a competitive disadvantage. The tax dollars saved by closing offshore loopholes could be put to better use by reducing the deficit or, more importantly, investing in infrastructure and education, which is what truly makes America a good place to do business.