Over the years, I've seen the Washington budget debate from a lot of angles ó as a small business owner, public school teacher and local government official ó and any way you look at it, we need more tax revenue if we're every going to reduce the deficit and make new investments to grow our economy.
Over the years, Iíve seen the Washington budget debate from a lot of angles ó as a small business owner, public school teacher and local government official ó and any way you look at it, we need more tax revenue if weíre every going to reduce the deficit and make new investments to grow our economy.
Common sense tells me the right place to get that revenue is from wealthy individuals and large corporations. Once theyíre paying their fair share, we can finally get beyond all these federal budget crises and move on to the important business of reviving our economy and getting everyone back to work.
As a small business owner, I know that Wall Street doesnít play by the same rules as Main Street. My business pays its taxes every year, but the same canít be said for a lot of Fortune 500 companies. In one or more of last four years, huge profitable corporations have paid nothing in federal income taxes. Sometimes they even get money back from the government! And the big companies that do pay taxes do so on average at only one-third of the official rate, thanks to loopholes and accounting tricks.
During my teaching career, I experienced overcrowded classrooms and often had to pay for materials out of my own pocket. And yet some Washington politicians are suggesting we get our national finances back in order by cutting funding to our already over-stressed schools and the next generation of workers, rather than by requiring the wealthy and big corporations to pay a bit more in taxes. Other programs on the chopping block include Medicare, Head Start and nursing home assistance.
In my 24 years on the Pine Bluff City Council, I quickly came to understand that federal budget cuts to education, health care and transportation are really budget shifts: Needs donít disappear; the responsibility for addressing them is simply imposed on state and local governments. And that means either local taxes go up, other programs are cut or our families and communities go without.
Put all these pieces together and to me the picture is clear. Either we raise the revenue we need by making sure wealthy households and big corporations pay their fair share; or the middle class and small business get stuck with the bill ó in the form of higher taxes, reduced services and high debt.
The good news is that a lot of folks in Washington this year are talking about reforming corporate taxes by closing loopholes. The bad news is that some want to use the money saved by closing loopholes and ending giveaways to actually lower tax rates on the very same corporations that have been dodging their fair share all these years. Corporate tax reform should result in corporations contributing more, not less, to our common needs, including deficit reduction.
Itís not surprising that the whole purpose of corporate tax reform could get turned upside down; thatís what the big companies pay their lobbyists to do. Itís the same reason a corporation with all its facilities, offices, employees and sales in the U.S. and other big countries can claim to be headquartered in a post office box in the tiny Cayman Islands, thereby avoiding millions of dollars in taxes. Itís the same reason a billionaire banker in New York can pay a lower tax rate than a registered nurse in Pine Bluff. Itís a big part of the reason we have budget deficits and inadequate investments to grow our economy in the first place. Taxes have been rigged in favor of the wealthy and against the middle class for a long time ó itís time we restored fairness to our tax system.
The choices we face are simple and stark. Do we end corporate tax giveaways, or do we risk our childrenís future by defunding our public schools? Do we ask the wealthiest 2 percent of American households to pay their fair share, or do we bankrupt families by cutting nursing home assistance? Do we ask a little more of those with much to give, or take even more away from those with little to spare?
My varied career has given me a good vantage point. A prosperous future ó one with lower deficits, better services and a stronger economy ó lies in restoring fair taxes on big corporations and the wealthiest members of our society.
Irene Holcomb was an Arkansas public school teacher for 35 years, served 24 years on the Pine Bluff city council, and is co-owner of the Henson-Holcomb Mortuary Inc. in Pine Bluff.