Tags: Small | companies | offshore | taxes

CNNMoney: Small Companies Turned Off By Big Company Tax Dodges

By John Morgan   |   Wednesday, 03 Oct 2012 03:16 PM

Small business owners appear to resent the tactics of big companies that move profits offshore to avoid paying taxes, CNNMoney reported.

The small businesses said that successfully “offshoring” profits requires a worldwide presence and tax strategies that are either too complex or too expensive for them.

They also cited a ripple effect caused by less tax revenues from big companies being available to undergird the economy.

Editor's Note: The Final Turning Predicted for America. See Proof.

“This tax money goes to support the infrastructure that allows our businesses to be successful,” Joseph Rotella, owner of the Spencer Organ instrument repair company in Waltham, Mass., told CNNMoney. “These big companies avoid paying their fair share.”

A Senate subcommittee recently claimed that some big U.S. companies used offshore units and loopholes to shield billions of dollars in profits from federal taxes. Sen. Carl Levin, D-Mich., chairman of the panel, said, “The tax practices and gimmicks range from egregious to dubious validity,” according to Reuters.

Sen. Tom Coburn, R-Okla., blamed Congress, stating, “Tax avoidance is not illegal. Congress has created this situation.”

The Senate panel singled out Microsoft and Hewlett-Packard in particular for their tax avoidance tactics. It said Microsoft avoided $4.5 billion in taxes by shifting U.S. revenues offshore, and that more than 90 percent of Hewlett-Packard’s cash was sitting offshore. Both companies strongly denied any wrongdoing under the existing laws.

The Organization for Economic Cooperation and Development estimates the average corporate tax rate among the 34 most developed economies is 25.4 percent, according to CBS News. America’s combined corporate tax rate is 39.2 percent, but it does not account for loopholes that allow corporations to pay a lower effective tax rate.

According to Congressional Budget Office cited by CBS News, corporate tax receipts in the 2011 fiscal year totaled only 12.1 percent of profits earned.

Hotelier Sue Edgington, owner of the Adventure Inn in northeast Minnesota, said shifting money overseas to avoid paying taxes is unpatriotic. When companies shirk paying taxes, she said, it threatens funding for programs as diverse as public colleges and wildlife protection.

“It angers me. It’s morally wrong,” she told CNNMoney. “That money is being pulled out of our economy. There’s a moral obligation to keep it here, because they live in this country and have been able to take advantage of that.”

Editor's Note: The Final Turning Predicted for America. See Proof.

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