The split in business opinion (see story below) on whether the economic world powers represented at the G8 summit should crack down on offshore tax havens that deprive nations of corporate tax revenue is easily understood.Organizations like the U.S. Chamber of Commerce, which represents multinational corporations, want to protect their big dues paying members from paying their fair share of taxes. Organizations representing small businesses, like the American Sustainable Business Council, want to protect their members from subsidizing the government services multinational corporations receive from the countries where they avoid paying taxes.
Multinational corporations are the “takers” and we are the “givers”. And we’re tired of getting screwed. Apparently so are the G8 nations based on their declaration this morning on combatting tax avoidance.(In the interest of full disclosure, I serve as chairman of the American Sustainable Business Council Action Fund.)
The Wall Street Journal
June 18, 2013
June 18, 2013
The Morning Risk Report: Companies Divided on Taxation as G8 Zeroes In
The business community is making noise about one of the top agenda items at this week's G8 summit, corporate taxes, but the conversation sounds more like a shouting match than a chorus.
By Christopher M. Matthews
The business community is making noise about one of the top agenda items at this week’s G8 summit, corporate taxes, but the conversation sounds more like a shouting match than a chorus. Dueling letters sent to the White House this month about corporate taxation, and more specifically, cracking down on tax havens, seem to indicate that many companies don’t see eye-to-eye on the issue.
British Prime Minister David Cameron, who’s hosting the leaders of the Group of Eight industrialized nations, has said corporate taxes are a top priority. The issue is one that President Obama, who hopes to reform the tax code, can get behind. “Tax avoidance is as much about countries and country rules as it is about companies, because the loopholes that the companies use are the results of the rules that countries set,” White House international-economic-policy coordinator Carolyn Atkinson, told reporters before leaving for Europe. Obama hopes to translate international support into political capital back home.
He’ll need it, because back in the U.S., there is little consensus on the issue, even among the corporate community that arguably stands to lose the most. In a letter to the White House earlier this month the U.S. Chamber of Commerce, the Business Roundtable, and others expressed concern about aggressive efforts to crack down on corporate tax evasion. “Recent tax initiatives in a number of foreign countries, including several of our G8 partners, appear to be primarily targeting American companies with global operations in the guise of combating tax avoidance, potentially harming both the U.S. companies’ competitive position and the U.S. Treasury,” they wrote in the letter.
Meanwhile, the American Sustainable Business Council, which represents 165,000 businesses, and non-profit group Avaaz sent competing letters to the White House. Avaaz said its letter was signed by 15,000 business owners. “Tax dodging deprives our nation of revenue needed to maintain and modernize the infrastructure and services underpinning a strong economy,” ASBC Executive Director David Levine wrote in the letter. The council also released a poll that found that 85% of small business owners oppose a territorial tax system, which the Chamber advocates and which critics say allows U.S. companies to shield overseas profits from domestic taxation. At least one major U.S. company has put its name on the issue, as Google’s Eric Schmidt said he welcomed the taxation debate (if not exactly advocating a specific change.)