Are we really competing on a global level?

Published 12:00 am Sunday, April 3, 2011

America may be the greatest nation in the world, but we are apparently not even close to being the most business-friendly.

A segment on 60 Minutes last weekend really helped put this huge problem into a very concerning perspective.

Hundreds of American businesses are essentially sending their jobs and tax dollars overseas because our country’s antiquated tax structure simply doesn’t stack up with much of the rest of the world.

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How big of a problem is it? How about to the tune of $1.2 trillion from American businesses invested in overseas operations, according to 60 Minutes.

With a corporate tax rate of roughly 35 percent — compared to a handful of countries that offer rates in the low to mid teens — the United States of America can be an expensive place to do business.

Corporations are finding legal loopholes so that they can have their corporate headquarters in countries like Switzerland that has much lower tax rates.

Interviewer Lesley Stahl pointed out that 600 American companies and 100,000 jobs are in the tiny country of Ireland alone.

In the 60 Minutes report, it was interesting to see that many of these businesses are headquartered overseas in name only, with their executives and their functioning base of operations still here in the good old U.S. of A.

This just sounds dirty and in some ways it is, although these businesses have found the loopholes in order to do so legally.

The bottom line is that corporations will always be focused on the bottom line.

The CBS news show reported that American companies are sending more than $60 billion a year overseas through these maneuvers.

And although our lawmakers can come up with a host of changes and modifications to either penalize companies that do this or incentivize them not to, that really is the classic Band-Aid on a broken arm.

Many of these are big corporations that want to be based here in America, but they also have to satisfy shareholders and investors.

A Cisco executive said his company has $40 billion invested overseas and would love to have those holdings located here.

If corporations have any chance to pay a third of the taxes, then these businesses are going to continue to find those loopholes, regardless of all the laws in the world.

Now is time for America to develop a corporate tax code that actually reflects that we live in a global economy.

We can talk about this concept all we want but, until the laws are in place to level the playing field, the United States will continue to be at a disadvantage.

Lowering the tax rate would be a tough pill to swallow in the short term, but shouldn’t we focus more on lasting solutions?

This would be a step in the right direction and allow us to truly compete in a world economy.

Everything has changed, except for the tax laws that continue to apply 20th Century rules in the new millennium.

Michael Caldwell is publisher of The Tribune. To reach him, call (740) 532-1445 ext. 24 or by e-mail at