While promises to increase taxes on businesses, particularly those with operations overseas, may play well on the campaign trail, it’s clear that, when the dust settles, the rhetoric has no basis in reality.
In today’s Washington Post, columnist Geoff Colvin does a good job of dispelling any notion that U.S. corporations are up to no good when it comes to the tax code. In fact, the tax changes proposed by the Administration represent a major change in long-standing tax policy designed to “level the playing field” in a global economy where most countries tax business income at a lower rate. At the end of the day, these proposals amount to a hefty tax increase on U.S. multinational companies. The international tax changes, combined with other tax increases like the repeal of “LIFO” and the new carbon “tax and trade,” are bad news for all of us. As any economist knows, corporations don’t pay taxes, we—customers, shareholders and workers— do.