Inequality is Weakening Social Security. Here’s How We Fix That.
When Congress set the cap on Social Security contributions in 1983, they didn’t anticipate forty years of rising inequality. And it’s cost us — a lot.
Colorado legislation aims to level the playing field against offshore tax haven abuse.
As a small business leader in Colorado, I see many ways that restoring a fair tax system is good for locally-rooted small businesses.
Taxes pay for roads, bridges and airports. They pay for efficient regulation of commerce and banking, for the police who protect us, for the courts that settle our disputes and for the agencies that keep our food, medicine and water safe. They contribute to intellectual and social assets such as educated workers with in-demand skills.
If you take away any of these components, or if you degrade them all, a modern economy would not be possible. As Warren Buffet has suggested, he would not have been anywhere near as successful in business in Madagascar.
To maintain these pillars of a modern economy, everyone should pay their fair share. Colorado’s economic progress is undermined when the tax code rewards companies that shift their profits to offshore subsidiaries incorporated in countries with little or no corporate income tax. Instead of paying the 4.63 percent corporate rate on profits from sales to Coloradans, these companies pay little or nothing, leaving the rest of us stuck with the check.
A bill that passed the Colorado House, but recently failed in the Senate chamber of our state legislature acknowledges the challenge that these tax havens — and the companies that exploit them — present to Colorado’s fiscal health. The proposed legislation sought to close tax loopholes that give large corporations an unearned advantage over small ones. [pullquote]The principle is simple: If you make money in Colorado, you should play by Colorado’s rules.[/pullquote]
HB 1275 would have leveled the playing field for the 99.9 percent of Colorado companies that do not have a squad of lawyers and accountants to exploit offshore tax loopholes. The principle is simple: If you make money in Colorado, you should play by Colorado’s rules.
To truly create a sustainable Colorado economy, the legislature must reform our tax system to put all businesses on a level playing field to pay for the necessary investments that every business, big or small, relies on to be successful.
With the prospects of tax reform at the national level looking dismal, other states should investigate Colorado’s approach to reining in tax haven abuse.
Richard Eidlin of Denver is vice president for policy for the American Sustainable Business Council, which represents 200,000 small and mid-sized businesses across the United States.