Our elected officials in Washington, D.C., talk a good game when it comes to supporting the needs of small-business owners like my husband and I. We run Blockwise Engineering, a manufacturing equipment business in Tempe, Ariz. Like all good small-business owners, we do our civic duty and pay our fair share of taxes to help ensure that our communities have good schools, well-kept roads and other services we sometimes take for granted.
Apparently, it’s up to regular citizens and small-business owners like us to bear the brunt when it comes to paying for these services. Some multinational giants like General Electric pay nothing in federal income taxes because our current tax code contains numerous loopholes they can exploit. How is that fair?
I asked that question to our elected officials on a recent trip to Washington, D.C., with other small-business owners from across the country. I was pleased to hear that Arizona Sens. Jeff Flake and John McCain are trying to take action to support small businesses.
I told Arizona’s members of Congress that whatever they think about taxes, we should be able to agree that all businesses – large and small – should compete on a level playing field. There should not be loopholes that let large multinationals use tax lawyers and accountants to book their profits to tax havens like the Cayman Islands, where they pay no tax. Tax haven loopholes cost an estimated $90 billion in lost federal revenue each year. On top of that, we lose $286 million here in Arizona. Every dollar corporations avoid in taxes means another dollar paid by someone like me, or cuts to public programs and investments that help make America a good place to do business. Large multinationals get all the benefits of American infrastructure, security and education, while we foot the bill. No one – least of all a wildly profitable company like GE – should get a free ride.
I hope my representatives really listen to my message. If they do, they’ll soon have a chance to prove it, as Congress is now considering whether to renew two offshore tax breaks, the “active financing exception” and “controlled foreign corporation look-through rule.” By not taking action, Congress could close these loopholes.
Corporate lobbyists of course will continue pushing to keep the loopholes, and so far it has worked, as the Senate Finance Committee caved to special interest pressure by extending them. Big business may have won the first round, but our elected leaders can still stop this nonsense and stand up for small-business owners and most other taxpayers.
It’s time for our elected leaders to focus on a different kind of competitiveness. It’s time to fix the tax code so that small businesses don’t face a competitive disadvantage compared to large multinationals. The tax dollars saved by closing offshore loopholes could be put to better use by investing in infrastructure and education, which is what actually makes America a good place to do business. For the good of all Americans, let’s hope our elected officials do more than just talk when it comes to leveling the playing field.
Libby Goff and her husband run Blockwise Engineering, a manufacturing equipment business in Tempe.