Leading up to Tax Day, many small-business owners like us spent hours hovering over our balance sheets, figuring out what we owed. Meanwhile, the accounting departments at multinationals like General Electric and Wells Fargo have been working at a fever pitch year-round to exploit every loophole in the tax code.
A report from Citizens for Tax Justice found that 111 companies managed to pay no federal income taxes at all in recent years. Many large multinationals hide their profits overseas in tax havens like the Cayman Islands, where they pay little to no tax. It's perfectly legal, and they have an obligation to maximize profits for their shareholders. But as a business owner who understands that taxes help support the infrastructure, security and educated workforce that make America a good place to do business, I am disgusted.
Tax haven loopholes cost an estimated $90 billion in lost tax revenue every year. That's not a problem, right? Our communities, schools and roads couldn't possibly have a need for that money. We're not in a constant struggle to maintain a balanced budget, and no social programs are in jeopardy of losing funding.
Lawmakers who refuse to make corporations pay their fair share must be living in an alternate reality. Legislation recently proposed by Republican Chairman Dave Camp of the tax-writing committee in Congress would lower the corporate tax rate by 10 percent and make it even easier for corporations to hide their profits abroad.
I just got back from a trip to Washington, where I joined small-business owners from across the country to tell our elected leaders -- enough is enough, it's time to put an end to offshore tax dodging. I hope that my representatives take what I said to heart.
If they do, they'll soon have a chance to prove it. Right now, Congress is considering whether to renew two offshore tax breaks with the arcane names "active financing exception" and "controlled foreign corporation look through rule."
If Congress takes no action (usually a pretty safe bet), these ridiculous loopholes will be gone from the tax code.
Unfortunately, I know that for every person like me that our representatives hear from, they hear from a throng of corporate lobbyists talking about how they need the loopholes to be "competitive."
I was disappointed to find out that the Senate Finance Committee caved to special-interest pressure by extending these loopholes. Even though the corporate lobbyists won the first round, our elected leaders can still stop this nonsense and stand up for small-business owners like us. I urge Sens. Dianne Feinstein and Barbara Boxer to stand with small-business owners by voting against renewing offshore tax breaks.
Corporations wish to be treated as "people" who can spend unlimited amounts of money to influence elections, but they don't want to be citizens of any country when the tax man comes a-knockin. Individuals are responsible for income earned worldwide, but corporations are only taxed when they choose to bring their money back into the states to pay dividends.
The rules shouldn't be rigged in favor of "people" with a bunch of money. Let's start restoring fairness to the tax code by closing corporate tax loopholes so that every business -- large and small -- has to pay its fair share.
Bryan Widener is co-owner of Doughbot Donuts, a robot-themed gourmet doughnut bakery south of downtown Sacramento.