I used to think the foundation of America rested upon hardworking small business owners like myself — based on opportunity, loyalty and equality. Now, I’m not so sure.
The recent wave of corporate inversions — the practice of reincorporating a business abroad, done typically to avoid paying U.S. taxes — has caused an uproar, especially among the small business community. Although Walgreens Co. ultimately rejected moving its headquarters to Europe, just over a month later, Burger King decided to buy out Canadian restaurant Tim Horton’s and move its headquarters north. Following suit is the medical device company Medtronic with a move to Ireland. When will it end?
We can boycott company after company, but it isn’t any use when the root of the problem lies in our dysfunctional tax code. According to a U.S. Public Interest Research Group report, loopholes and tax haven abuse cost us an estimated $90 billion in federal income taxes each year.
As a small-business owner in Des Moines, I play by the rules and pay my taxes to support our American economy. I create jobs that will continue to support our local economy. When the playing field is so uneven it makes it hard to realize this dream.
When companies partner or “move abroad”, by shifting assets on paper, this leaves other companies and private citizens to pick up the tab for the taxes escaped by the inverted companies. A written signoff shouldn’t change your tax bill.
Inverted companies continue to benefit from access to America’s consumer market, a well-educated work force trained by our school systems, strong private property rights enforced by our court system and American roads and rail to bring products to market — all supported by our tax dollars. They should have to pay the same taxes as the rest of America’s businesses in order to support these things that make our country strong.
Unfortunately we have a Congress continually mired in gridlock and too busy with endless election campaign cycles to do the hard work of tax reform. We must demand of our legislators a return on the investment we put in them to do their job!
If you do business in America, you should pay your taxes. No one should get a free ride.
• Lora Fraracci owns EarthMadeClean, a residential and commercial cleaning business in Des Moines. Comment: email@example.com