Right now, Senator Wyden is deciding whether or not to support the recently released Portman-Schumer international tax reform framework. The Main Street Alliance of Oregon, and our partners at Americans for Tax Fairness believe that this proposal fails two principles of corporate tax reform.
First, corporate tax reform should raise a significant amount of revenue over the long term, not be revenue neutral, in order to help meet our country’s critical needs. Second, our tax code should not incentivize corporations to invest in foreign countries rather than the United States, such as by allowing them to pay a lower tax rate on their offshore profits than on their domestic profits.
Join business owners from all over Oregon in calling on Senator Wyden to oppose the Portman-Schumer framework, and support corporate tax reforms that increase revenue in the US. Our communities and businesses depend on it!
Please oppose the Portman-Schumer international tax reform framework, and ensure that any tax reform generates new revenue for our country. As Oregon small business owners, we have three specific concerns with the framework:
- The framework brings the United States closer to a territorial tax system, which is bad for Main Street businesses like ours. Our current tax system requires U.S. corporations to pay U.S. taxes on their foreign earnings, less credits for foreign taxes paid. A territorial tax system would eliminate most U.S. taxation of offshore profits creating an incentive for companies to move jobs offshore and disguise domestic profits as offshore profits. This give extractive, multinational corporations even more of an unfair edge over domestic companies and small businesses.
- The framework establishs a very low tax rate on $2.1 trillion in existing offshore profits, costing billions of dollars that could be used to create jobs and improve services here at home. The framework proposes a one-time transition tax would be assessed on the $2.1 trillion in U.S. corporate profits that are currently offshore and not taxed here. Many of those profits have been booked in tax havens where companies have no assets or even employees. This would be a huge giveaway to companies that have engaged in the most egregious international tax-avoidance schemes. A 14% tax rate would hand ten companies alone $82 billion in tax savings, according to Citizens for Tax Justice.
- The framework will create a huge new tax loophole, the patent or innovation box. A patent box would allow corporate profits earned on intellectual property, like patents and trademarks, to be taxed at a much lower rate than domestic profits are taxed. One of our nation’s biggest offshore tax loopholes is the ability of corporations to characterize their income as derived from intellectual property. Multinational corporations don't need another tax break, we need to close loopholes like these, not create new ones.
Rather than create new loopholes that reduce corporate taxes as the Portman-Schumer framework would do, big, extractive corporations need to start paying their fair share like the rest of us. Only then will we have the revenue needed to ensure economic security for families and seniors; to make investments in education, energy, roads and research needed to grow the economy and create jobs; and to help reduce the deficit.
The Main Street Alliance of Oregon Small Businesses