Small businesses need economy-boosting investments, not offshore tax dodging.
When President Franklin D. Roosevelt signed Social Security into law in 1935, he said: “This law … represents a cornerstone in a structure which is being built but is by no means complete. … It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”
For generations, Social Security, along with Medicare, has met that promise.
But in current debates in Washington, D.C., over tax and budget priorities, it seems we’ve forgotten this important lesson from history — that the way to build a strong economy and a prosperous nation is through investments that bolster the economic security of everyone in our communities.
For the last 25 years, my husband and I have owned and operated Mid-Maine Restoration. We’re a third-generation, family-run business that specializes in historical restoration of steeples and towers. So I know a thing or two about both preserving history and what fuels local economies.
It’s an honor to go to work every day, whether rebuilding dormer windows at the old Maine General Hospital Building in Portland, manufacturing new clock hands for the First Baptist Church in Bath, or installing a replica tower at the Lincoln County Courthouse in Wiscasset.
Small business owners and our employees work hard, and we’re counting on the promise of Social Security and Medicare for our retirement. For many, these earned benefits may be the sole source of retirement security: According to a recent poll, only one-third of small businesses offer a retirement plan.
So it’s galling that some politicians have proposed cutting these programs in the name of “deficit reduction.”
A report this year from the Main Street Alliance reveals that even a 3 percent cut to Social Security would take $109 million out of Maine’s economy. A similar cut to Medicare would cost us $68 million. That’s the last thing small businesses need in a fragile economy.
Instead, we should be strengthening retirement security, building on Social Security as a structure that, as Roosevelt said, is “by no means complete.”
How do we pay for it? The answer lies in another piece of history that has been lost — a definition of corporate responsibility that includes paying your fair share of taxes.
Even as corporate profits have hit record highs, the corporate share of federal tax receipts has plummeted to near 70-year lows.
In some recent years, profitable multinationals like General Electric, Wells Fargo and Verizon have paid no federal income tax at all — or even gotten tax refunds — by exploiting tax loopholes. A recent Senate investigation spotlighted how Apple has avoided billions in income taxes through a complex web of offshore subsidiaries.
Indeed, offshore tax dodging has become a major enterprise for multi-national corporations. To make matters worse, the U.S. Chamber of Commerce is lobbying Congress for a so-called “territorial” tax system, essentially a permanent tax holiday for corporate profits made — or shifted — offshore.
Small business owners don’t spend millions of dollars on tax lawyers to dream up creative accounting schemes. On the contrary, I’m proud to pay my fair share of taxes, because I know they help fund important economy-boosting investments.
But when large corporations avoid their tax responsibility, it leaves small businesses like mine at a competitive disadvantage and robs the country of the resources we need to invest in the future.
This explains why 76 percent of small business owners support closing offshore corporate tax loopholes, according to a recent poll. Eighty-five percent oppose a “territorial” tax system.
As Sens. Susan Collins, R-Maine, and Angus King, I-Maine, work to overcome the partisan divide in Congress, I hope they will stand up for small businesses in Maine by cracking down on offshore corporate tax dodging in order to protect and strengthen investments in Social Security and Medicare.
Lisa McSwain and her husband Joe own Mid-Maine Restoration and are members of the Maine Small Business Coalition.