Stop the Madness

 

May 2014

 

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An old comic strip once featured an expression which over the years has far transcended the combined circulations of all the newspapers that carried it: “We have met the enemy, and he is us!”

 

That line from a Pogo comic gained more prominence a year or two later when it was used to promote environmental stewardship in the early 1970s, a practice that’s far more common today. But when I think of that expression, it calls to mind a current issue in our nation’s capital that severely harms efforts to bring more jobs back home and keep them here.

 

Why in the world are we giving tax breaks to corporations that send jobs overseas?

 

At the most recent meeting of the AFL-CIO executive council, on which I have represented our union’s interests since 1991, we tackled this subject and came up with a straightforward strategy to stop the bleeding. (If your eyes are starting to glaze over at the thought of reading about tax laws, remember that the real issue here is American jobs. Read on.)

 

The heart of the problem is that U.S.-based businesses have hoodwinked legislators and administrations into believing they need outsourcing tax breaks to be “competitive.” Over the years, they’ve managed to get laws rewritten so that their income generated overseas is taxed at lower rates than what’s produced at home.

 

If that’s not an incentive to outsource American jobs, nothing is.

 

Of course, their approach isn’t that blatant. It’s sugarcoated and misleading, in the same way that proponents of so-called right-to-work laws hide behind that misnomer. After all, who could be against the right to work? But, as we know, that’s not what those laws are about, at all. They’re about driving down wages, benefits and working conditions as well as dividing workers.

 

Back to the subject at hand. When businesses claim they need these kinds of tax breaks, their argument confuses the interests of multinational corporations with the interests of people who live and work in America, which is the proper concern of elected officials. And when they get rewarded for outsourcing, it feeds an international race to the bottom.

 

We heard a report during the executive council meeting that pointed out corporate profits today are at all-time highs, yet the corporate share of federal tax revenues has fallen more than 60 percent in the last 50 years. What this means is that big corporations have gamed the system so that working families’ tax dollars actually subsidize taking away American jobs.

 

If this seems ridiculous, you should know that not everyone feels it’s out of line. In fact, Congress is now considering several proposals that would increase the tax incentive for corporations to shift employment and income overseas.

 

Those considerations include allowing corporations to indefinitely “defer” paying taxes on offshore profits; dramatically reducing or completely eliminating U.S. taxes on offshore corporate profits; and a “minimum international tax,” which is basically what the name suggests.

 

 It doesn’t have to be that way, it shouldn’t be that way, and there are a few relatively simple steps that will restore fairness. The American people want a system that rewards those who produce and employ here, not those who abandon America. That’s why the labor movement stands for a simple and clear standard: The tax laws must not in any way encourage investment in foreign countries rather than the United States.

 

That means the offshore profits of U.S. corporations must be taxed at the same rate and at the same time as their domestic profits. There is no economic or political justification for giving corporations a tax incentive to shift jobs and income overseas. While part of our industry is based on moving goods overseas, there’s no way we will stand for jobs moving overseas. It’s time to invest in America.

 

It’s time to restore our social contract, and to recognize that workers deserve to share in the profits they help generate. It’s time to stop treating American workers as if they’re disposable.

 

Through our affiliation with the AFL-CIO, the SIU will continue this fight until we’ve won.

 

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