Keeping jobs here
Corporations that send jobs overseas shouldn’t profit from the killing of American jobs.
The corporate tax plan that Treasury Secretary Janet Yellen advocates could help to halt an ongoing war on Middle America.
U.S. corporations couldn’t make a profit without using U.S. roads, bridges, railways and broadband each and every day. Fairness requires that corporations pay a fair share of infrastructure upkeep and expansion.
Under current tax law, companies taking manufacturing overseas actually get a tax break. That’s incredible and incredibly ridiculous. Policies like that break the backs of hardworking Americans — the folks who put in a good day’s work for a fair day’s pay.
If the corporate tax plan enunciated by Ms. Yellen became law, $700 billion that corporations make from sending U.S. jobs and manufacturing overseas would return to the Treasury Department. Those funds could fuel the Biden infrastructure plan. The $700 billion comes from closing loopholes that allow tax breaks for overseas spending by multinationals.
President Joe Biden’s call to raise the overall corporate rate to 28% should be reconsidered with an eye toward slight scale-back, despite that proposal being a reduction from the 35% that corporations paid in 2017.
U.S. Sen. Joe Manchin of West Virginia, a moderate Democrat, said he would back a 25% rate and the closing of loopholes. That is a reasonable increase that should be able to garner broad support.
Ms. Yellen also supports a global minimum corporate tax, an idea that’s not as extreme as it sounds to some. A global minimum tax would protect American companies from being undercut by countries that provide breaks to corporations. Nations that foster freakishly low corporate tax rates to steal business away from other countries must get their comeuppance, and a global minimum corporate tax rate might be the answer. That goal isn’t pie-in-the sky. Discussions on tax structures have been ongoing for years among the 37 member nations of the Organization for Economic Cooperation and Development. The European Union backs Ms. Yellen’s call for the global minimum tax.
Increasing the corporate tax rate isn’t about punishing big corporations. It is about growing infrastructure, which ultimately grows corporate profits.
Ms. Yellen projects the Biden infrastructure plan would increase gross domestic production by 1.6% by 2024. And she holds that this growth would mutually benefit the administration’s national infrastructure plan.
Closing tax loopholes such as those that allow U.S. companies to deduct expenses for overseas transactions boosts the carrot-and-stick approach. It’s a simple matter of conditioning: Corporations that keep jobs in the U.S. get the benefit of a reasonable corporate tax rate and they get to watch their counterparts — corporations that send jobs overseas — forced to face higher taxes with no benefits.
Funding infrastructure shouldn’t be solely on the backs of American taxpayers. For too long, corporations took the money and ran — taking with them jobs and profit overseas and, thereby, devastating Middle America. It must end.
The Biden proposal is strong. It aims to keep jobs in America. With a few modifications, it has a chance to succeed. It’s certainly an improvement on the status quo. Congress should debate the bill, create a workable version which closes loopholes, and end the free ride for corporations.