It was satisfying to read the Nov. 19 Point of View piece “How engaging the world strengthens N.C.” by former Govs. Jim Hunt and Jim Martin. Their wise reminder that our country is economically linked to the rest of the world is certainly true.
They pointed out that more than 95 percent of the world’s consumers are abroad in some of the world’s fastest-growing markets and that more than half of U.S. corporate income is now from foreign operations. Unfortunately, U.S. corporations are very good at legally avoiding taxes. With millions of Americans still unemployed and the economy needing investment, the Federal Reserve reported American international corporations with $15.07 trillion of foreign profits in 2011. That was about as much as the national debt in 2011.
Most of those foreign profits are sitting in offshore tax havens drawing interest because bringing them home would require payment of 36 percent taxes if they didn’t reinvest them in their businesses here. In this country, through tax manipulations and lobbying, corporations, in aggregate, have reduced their taxes from 36 percent to 12.1 percent. As Warren Buffet noted, this is less tax than his secretaries pay.
Poor Uncle Sam sure needs income. Shouldn’t both parties in Congress look at these corporate tax breaks?