In our highly partisan environment there seems to be very few issues that Republicans, Independents and Democrats agree on. This partisanship is easily seen in Congress but is also alive with voters across the country. Small business owners are often no different than their customers in demonstrating divergent opinions on issues depending on their political preferences.
So when we find an issue on which small business owners agree, regardless of partisan leanings, we should take notice. And when that agreement centers on one of them most contentious matters that Congress will soon be addressing, our elected officials in Washington need to pay close attention. Such is the case involving federal tax fairness between small business and large, multinational corporations.
Small business owners are keenly aware that multinational corporations are legally escaping paying much, and often all, of the highly publicized 35% U.S. corporate income tax rate. In a poll released early last year by the American Sustainable Business Council (ASBC) and others 80 percent of the small business owners surveyed said that U.S. multinational corporations using accounting loopholes to shift their U.S. profits to offshore tax havens is a problem. Seventy-five percent said that big corporations using tax loopholes harms their own small business.
Accounts of giant businesses like Boeing, General Electric, Pfizer, Microsoft and Honeywell International using offshore tax loopholes to dramatically lower their taxes – often to zero — are all too common. U.S. Public Interest Research Group just released report showing that each of America’s small businesses on average picks up the tab for $3,067 to cover the costs of tax avoidance by U.S multinational corporations playing the offshore profit-shifting game.
It is clear to small business owners that the ability of these large corporations to minimize their tax liability through offshore tax loopholes is contributing to our nation’s budget problems and is harmful to the small business community. This awareness of multinationals shirking their tax responsibility has resulted in a bipartisan small-business owner consensus on the need of large, multinational corporations to pay their fair share of taxes.
Last month ASBC and the Main Street Alliance (MSA) commissioned a scientific telephone survey of over 500 small businesses across the country. As national business organizations representing small and medium size companies, both ASBC and MSA have advocated for equitable taxation on big business profits to invest in the country’s infrastructure and address the national debt.
Here are some of the overwhelmingly bipartisan consensus results of that ASBC/MSA small-business owner poll just released.
—More than three quarters of small business owners support closing overseas tax loopholes with a unitary combined reporting system:
75% or more of Republican, independent and Democratic small business owners support this approach, which is successfully used by states to stop corporations from shifting the location of profits to avoid taxes.
—More than four out of five small business owners oppose a proposal to institute a territorial tax system (a system that would eliminate U.S. taxes on profits made or shifted offshore):
85% of small business owners oppose a proposal for a territorial tax system. Across party lines, at least 67% strongly oppose the proposal.
—Small business owners support ending deferral of taxes on foreign profits and requiring US corporations to pay income taxes on income earned overseas:
—When asked if foreign earnings of US corporations should be taxed after given credit for foreign taxes paid, 64% of small business owners expressed support. Within each party affiliation, at least 62%, expressed support.
These results should send a clear signal to Congress and the President from the country’s small business owners. The priority for reforming our nation’s tax code is to stop multinational corporations from using offshore tax havens to avoid paying their fair share of taxes. And these elected leaders are also put on notice to not support any proposal for a territorial tax system for multinational corporations that would lock in what small business owners of all political persuasions view as completely wrong and unfair.
Frank Knapp is vice-chair of the American Sustainable Business Council and president and CEO of the South Carolina Small Business Chamber of Commerce. American Forum 3/13.This article previously appeared in The Hill.Posted - Copyright © 2022 Eastern Group Publications, Inc.