Small businesses need access to credit, a well-educated workforce, good roads and dependable communications. I know because I run a small business, and small businesses are our customers. Families have needs, too: good schools, safe streets, healthy food. I know because I'm a mom.
What small businesses and families don't need is for big companies like Burger King to use a tax loophole to renounce their U.S. citizenship so they can dodge their fair share of taxes. And yet thats what's we see going on more and more these days.
The way the trick, called "inversion," works is that an American corporation buys an offshore firm and then declares itself a foreign company. The change takes place primarily on paper. The corporation continues to operate in the United States, benefiting from the huge American economy and relying on all our public services. But because its official address is in a foreign country, usually a well-known tax haven, it can avoid a good chunk of the U.S. taxes it would otherwise owe.
Every time a huge corporation renounces its American identity to sneak out on its full tax bill, public budgets get squeezed. That means fewer Small Business Administration loans, less broadband Internet access and more potholes. And when big corporations use accounting schemes to cut their tax bill, it gives them yet another advantage over smaller competitors. It simply isn't fair.
But it's not only small businesses that suffer. With three kids in public school, I know our classrooms are overcrowded and our teachers overwhelmed. Despite constant fundraising by us parents, our districts pupil-teacher ratio is 36 to 1 and the instructional year is too short. And what about school districts where parents don't have the time to hold bake sales and sell wrapping paper at Christmas? Their kids pay an even heavier price.
Of course, the alternatives to reduced services from corporate tax dodging are higher taxes on small business and families like yours and mine, and higher public debt. Either way, when big companies duck what they owe, the rest of us end up paying more. That's not right.
Maintaining and improving the public services that make our country such a wonderful place to live and start a business isn't just practical, it's patriotic. We should be good stewards of our nation and leave it to our children in even better shape than we inherited it from our parents. We should honor all those Americans who have served our flag in so many ways, such as my grandfather, who was a physician in World War II.
True entrepreneurs start businesses because they are passionate about an idea and want to work for themselves. They don't go into business in order to dodge their taxes. Even if they could afford accounting and legal departments to cook up tax-avoidance schemes, Main Street firms wouldn't use them. That's because small businesses maintain a respect for and a connection to local communities that are completely lacking in huge chains like Burger King.
We can stop this rash of corporate disloyalty with legislation already in Congress and supported by President Obama. We're lucky as Oregonians that one of our senators, Ron Wyden, is the chairman of the committee in the U.S. Senate that writes tax laws. He's come out against the latest version of offshore corporate tax dodging, but hasn't supplied any details yet on how to stop it.
Our other senator, Jeff Merkley, as well as his opponent in this fall's election, Monica Wehby, should address this important issue on the campaign trail. I'd like to hear where the candidates stand on closing corporate tax loopholes, including this latest dodge being used by Burger King, which give big companies an unfair cost advantage over small businesses and drain our communities of vital resources.
The business of my small business is to help other small businesses grow. We try to provide solutions to the problems entrepreneurs face each workday. In my other job, as mom, I try to foster my kids' future success with a lot of attention and a lot of love. Neither of my jobs is made any easier by a tax code that allows big corporations to shortchange the country that helped make them great.
Parsons is chief executive officer of Palo Alto Software in Eugene.
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