Tax Breaks for Large Corporations Overseas at the Expense of Small Business «

Tax Breaks for Large Corporations Overseas at the Expense of Small Business



It’s always on the mind of businesses and, lately, a subject in the press – companies that go overseas with their plants in order to avoid U.S. taxes. Back in 2004, legislation allowed a “tax holiday” for these corporations to allow them to bring their profits back to the U.S. at a lower tax rate. The cry to allow another tax holiday now is heating up.

Why is the Congress and others suggesting such a tax economy? They argue that such a cash infusion into the economy will serve as an economic stimulus. Others argue that it didn’t happen in 2004 so why should it happen now.

There is another issue. Small businesses and their creation of new jobs drive the U.S. economy. Why should we allow large corporations to employ individuals overseas, then bring the profits home and pay low tax rates on them and still subject small businesses to tax rates of 35% or so? As this story explains, during the 2004 tax holiday, profits brought home from overseas were taxed at a little over 5% while small businesses continued to pay regular corporate tax rates around 35% with an income of only $100,000.

Where is the fairness in that?

 

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