People used to say that my father, a small-town grocer for many years, was a better Christian than he was a businessman. He never let anyone's kids go hungry over an unpaid bill. We need more of that kind of compassion today.
But my father also realized that true prosperity required more than personal generosity -- he and countless other seniors have depended on Social Security for their income and dignity in retirement. I, his only child, was only able to attend college because of state and federal grants, plus the work study program and student loans.
That's why I'm particularly saddened that some of the government services that helped create America's middle class are being slashed by the across-the-board budget cuts known as the "sequester." And some in Congress propose even deeper cuts this fall.
And I must admit anger that, while vital services are being cut, some of the country's most profitable corporations are hiding profits offshore in tax havens to avoid paying their fair share of taxes. Congress has turned a blind eye to this corporate tax dodging, even though it means more cuts and more pressure on working families. With the next battle over the budget in Washington about to begin, it's time to reform this system so highly profitable corporations and the very wealthy once again pay their fair share.
We face an ethical choice: do we allow some extremely profitable corporations to keep their tax loopholes, or do we restore the services that strengthen working Americans?
Achieving real tax reform isn't easy. I should know. When I served in the Missouri legislature, I worked hard to reform a state system that was outdated, unfair, and inadequate. I continue that effort now in partnership with the Economic Justice Task Force of the Missouri Association for Social Welfare.
But the case for restoring federal tax fairness is clear. Despite racking up record profits, corporations are supplying the smallest share of total federal revenue in 60 years, according to the U.S. Office of Management and Budget. Some pundits claim that corporate tax rates are too high, but many of our largest and most profitable corporations are paying just one-third the official corporate tax rate, the U.S. Government Accountability Office has determined.
Some famous corporations like General Electric, Verizon and Wells Fargo go for years at a time without paying any federal income taxes at all, according to a respected watchdog organization.
The most important corporate tax reform would be to snap shut the huge loophole that encourages multinational corporations like Apple to keep their profits offshore in tax havens, where they pay little or no tax, until they bring them back to America. Ending that giveaway would raise $600 billion over the next decade, a Senate study found. Thats money we could invest in communities all across our state and nation: ensuring adequate family nutrition through the SNAP (food stamps) program, improving education, repairing infrastructure, and expanding economic opportunities.
Unfortunately, sometimes good ideas get hijacked, and that's what's happening to corporate tax reform. Even now, an army of corporate lobbyists is descending on Capitol Hill, not to close tax loopholes, but to institutionalize them. Their plan, known as a "territorial" tax system, would free from all U.S. taxation profits earned overseas -- or, more precisely, claimed to have been made overseas, since the origin of earnings can be easily manipulated.
Though politicians often try to separate them, tax and spending decisions are closely linked. As just one example: we could bring back the 57,000 low-income kids "sequestered" out of the Head Start program this year if we took away a generous tax deduction for private jet owners. Both cost $1.7 billion -- which is our priority?
Budgeting is all about priorities. My dad understood that as he extended more credit to his neighbors, realizing that feeding families had to come first. In the end, his faith was not all together unrewarded: years after he'd sold his store, old customers would show up at his door to pay off old debts and to thank him with tears in their eyes, some saying "you saved our lives."
American society will be similarly rewarded with prosperity and more vibrant communities if we only follow the compassion that is part of our nature as human beings and good sense. Let's properly fund important public investments by making corporations and the wealthy pay their fair share rather than sticking the rest of us with the tab.
Oxford is executive director of the Missouri Association for Social Welfare. She served 2005-2012 in the Missouri House of Representatives.
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