Senate Democrats are encouraging President Obama to pass an executive action aimed at keeping companies in the United States despite suffocating tax rates. At 39.1%, the U.S. has the highest corporate tax rate among developed nations. That tax rate is being blamed for the recent rise of corporate inversions – when companies that conduct at least 20% of their business overseas incorporate in another country to avoid the U.S. tax burden.
Senators Elizabeth Warren (D-MA), Dick Durbin (D-IL), Jack Reed (D-RI) are leading the charge to encourage the President to act unilaterally to keep companies in the U.S. by changing threshold from 20% of business to 50%. While they have introduced the Stop Corporate Inversions Act in the Senate, the senators sent a letter to the White House asking President Obama to consider acting on his own.
“We have introduced… the Stop Corporate Inversions Act, and are working with our colleagues in Congress to pass legislation as soon as possible to eliminate tax breaks for inverted corporations, including closing the inversion-acquisition loophole,” the letter reads, according to Roll Call. “However, our efforts should not preclude executive action to prevent corporate inversions. The coming flood of corporate inversions justifies immediate executive action.”
As TheBlaze reported, “economic patriotism” has become the buzzword used to condemn companies that incorporate overseas.
“That’s when it gets really scary,” Pat said on radio this morning. “When they start putting the word ‘patriotism’ into their horrific policy. That’s bad.”
According to Americans for Tax Reform, the average corporate tax rate in developed countries hovers around 25% – putting the U.S. rate of nearly 40% significantly higher.
“It’s almost double the rest of the world,” Glenn said of the tax rate. “So these companies are sitting here saying, ‘Well, you know what? I’m a global businessperson. The United States of America is going in the wrong direction… It’s so high.’”
As Stu explained, it is difficult to justify the American tax rate when you consider how uncompetitive it is.
“It’s so against the American spirit,” he said. “We have something that makes us uncompetitive. So instead of changing that thing, the tax rate, we are just changing the rules so people can’t leave. What country is that?”
Ultimately, Glenn has always believed American companies have a certain “responsibility” because of the freedoms and opportunities available to them, but even he admitted that there comes a time when enough is enough.
“We’re saying that we should not have a border fence because we are not a country that has a border fence… [But] we’re building a wall to keep people in,” Glenn said. “We’re building the virtual economic Berlin Wall around our country… We’ve always said… ‘If you don’t like it, leave.’ Go someplace. Now we’re saying, ‘We got to build a wall because everything is starting to leave.’ That’s crazy.”
“That is a sure sign that we have lost our values and our principles. And I don’t blame these companies,” he concluded. “It’s wrong. And it violates all of our principles.”
Front page image courtesy of the AP