Updated: December 2, 2013 11:38AM
The yahoos in Congress need to understand they are not representing their own little province. They are U.S. representatives and senators and what they do affects the entire country, if not the world.
Voters have a responsibility to put some effort into learning about political candidates and their positions. Primary elections are important. Apathic voters are partly to blame for this latest fiasco.
Attack the tax havens
Amid the fighting in Congress over the budget and the debt ceiling, one fair and timely budget solution seems to be nearly forgotten — closing the offshore tax haven abuse that costs us an estimated $150 billion in federal revenue every year.
Tax loopholes aren’t illegal, but they’re not right. By using accounting tricks and taking advantage of our inefficient and loophole-ridden tax code, many large U.S.-based multinational corporations make their profits appear to be generated offshore, thereby avoiding paying U.S. taxes.
Some glaring examples: Microsoft keeps about $60 billion offshore, on which it would owe nearly $20 billion in U.S. taxes; Pfizer uses accounting gimmicks to shift the location of taxable profits offshore, allowing it to report no federal taxable income in the U.S. in five years; and Google achieved an effective tax rate of just 2.4 percent on its overseas profits between 2008 and 2010.
This corporate abuse of offshore tax havens allows corporations to avoid an estimated $90 billion in federal income tax every year, plus $40 billion to $70 billion lost from wealthy people who shift money offshore.
This tax dodging also deprives state governments of billions of dollars in revenue. Altogether, tax havens cost state governments nearly $40 billion in lost revenue in 2011. Illinois alone lost more than $2.5 billion in state revenue that year due to offshore tax loopholes, according to an Illinois PIRG report.
Fortunately, legislation has been introduced in the U.S. Senate to close the most deplorable loopholes and save taxpayers $200 billion over 10 years.
When wealthy individuals and large corporations abuse offshore tax havens, Americans and small businesses are forced to shoulder the burden. Every dollar that corporations avoid in taxes is balanced by average citizens paying higher taxes and coping with cuts to public programs, not to mention a higher federal deficit.
Illinois Public Interest Research Group, Chicago