Some work has been done recently to address tax loopholes for large corporations, such as the notorious corporate tax inversions, which put small businesses at a disadvantage, but more needs to be done to help level the playing field for small businesses.
Small business owners across the country are putting countless hours into their companies, working hard to sustain and grow their businesses and with them, our economy. While the success of small businesses is key to our full economic recovery, the path to economic stability is threatened when a select few are given special tax treatment.
That's why entrepreneurs, lawmakers and consumers are becoming increasingly concerned with large corporations' use of a tax loophole, called an inversion, which allows big businesses to relocate their base overseas for tax reasons. This practice leaves consumers and small businesses holding the bag when it comes to bolstering the nation's tax base, and gives big companies an unfair advantage over small business owners who must pay full freight because corporations can then use the savings to undercut them on costs. The Treasury Department recently announced it will use regulatory authority to take action on inversions, which is a step in the right direction, but we need policymakers and lawmakers to do more to close tax loopholes that harm small business owners.
Inversions allow corporations to purchase a company in a tax-friendly nation in order to relocate their headquarters to save money on taxes. For all intents and purposes the company remains a U.S. company, continuing business as usual--just enjoying a lower tax rate. The rub is that their tax burden is then shifted to small businesses and consumers.
When large corporations don't pay their fair share, it hurts small businesses, our economy, our ability to invest in our national infrastructure and so much more. It gives those benefitting significantly from everything the American economy has to offer the ability to duck their responsibility to contribute to it.
Small business owners are tired of doing their part while big corporations use unfair loopholes to shirk their obligation to the nation that helped make them successful. In fact, Small Business Majority polled a random sample of entrepreneurs across the country and found nine in 10 owners say the practice of U.S. multinational corporations using accounting loopholes to shift their U.S. profits to offshore subsidiaries to avoid taxes is a problem, and they support eliminating these tax breaks and providing incentives to bring production home.
What's more, 75 percent say their small business in particular is harmed when big corporations use loopholes to avoid taxes, and a sweeping 90 percent believe big corporations use loopholes to avoid taxes that small businesses have to pay.
Politicians on both sides of the aisle have agreed we need to address this issue, but they have yet to move forward on legislation that would address the practice of inversions. And while the Treasury Department's announcement that it will use regulatory authority to help address this is welcome news, we need congressional action to help close unfair tax loopholes across the board.
Politicians talk a lot about their support for the small business community. Job creation and economic stability can start with the closure of tax loopholes that give big corporations an unfair advantage. Putting small and big companies on the same plane is a no-brainer. It would strengthen the economy and bolster small businesses.
It's time lawmakers put their money where their mouth is, and move forward with a plan to close these unfair tax loopholes now.