Full disclosure: as my good friend Anthony Ahlegian said last week, we at The Carroll News interpret full disclosure as “transparent, unbiased, encompassing and relevant information.”
I agree wholeheartedly, but in my tenure as the editor of the Business and Finance section I’d like to take this idea to the next level.
How do events and trends in Business and Finance affect you, the reader? While it’s tempting, I will try as hard as I can to not stray into the realm of politics, or share my own opinion. However, in the words of the great Peter Griffin, sometimes things “really grind my gears.”
I’m an accountancy major, and I’m hoping for some kind of career in the tax industry. So, tax policy is something that I’m really interested in, and pay attention to. As the end of tax season approaches, more and more articles keep appearing in the mainstream business news outlets with headlines along the lines of “Company avoids massive tax bill with offshore shelters.”
If you, as an individual, moved all of the money you made over the course of the semester offshore, and refused to pay taxes on those earnings, you would be severely penalized by the IRS. Then why are companies able to do just that, seemingly with the approval of regulators and government auditors, and avoid any kind of punishment or sanctions?
This is an issue that hits home for me. Every Saturday, I volunteer at the Famicos Foundation in East Cleveland. I help people file their taxes. You would not believe the lengths the IRS will go to in order to get a paltry $12 from someone, even if they are below the poverty line. The IRS will pass the debt on to a collection agency, garnish your wages and even go as far as to out a lien on your house. Why should the impoverished person have to pay more, while multi-billion dollar corporations like Apple and Caterpillar avoid multi-billion dollar tax bills by hiding profits overseas?
Caterpillar was most recently in the news because they avoided paying $2.4 billion in taxes since 1999 by shifting profits to a Swiss subsidiary. Why would an American corporation, based in Peoria, Ill., be allowed to stash its profits in Geneva?
“What Caterpillar did here is pretty routine U.S. multinational tax planning,” said Kenneth Kies, a Washington tax lobbyist who represents Caterpillar. “This is pretty normal stuff.”
You might ask, “Just how does this affect me?” Well, as tax revenues either decrease or stay flat, the federal government has resorted to borrowing massive amounts of money. According to the Pew Research Center, the federal government now pays 6.23 percent of all the money it spends on interest payments. I’m not sure if you’ve driven down the highway or across Warrensville lately, but the roads are falling apart. Schools are closing down.
As those interest payments gets closer to 10 percent of total outlays, will it make more sense to raise taxes on the people of the United States, or enforce the existing tax code toward corporations, less loopholes and other special treatments? It’s a complicated choice, but the issue boils down to this: who is paying their fair share? Either look to see your tax bill go up, or corporate earnings go down.
I’m working towards a career in the corporate tax world. Even though that’s my goal, I can’t help but ask the question “Is this fair? Are high corporate profits worth giving up good schools and roads that are driveable?”
Like I said, some things just really grind my gears.