Almost universally, Iowans bemoan the political advertising blanketing the airwaves prior to an election. Beyond the blitzkrieg of campaign television and radio ads, targeted direct mail marketing drives, door-to-door campaign calls and town square political rallies make many voters anxious for Election Day to come and go.
Unfortunately, in the rush to hit the campaign trail, Congress left plenty of unfinished business to attend to after the Nov. 5th elections. The leadership team currently in charge of the U.S. Senate punted fundamental spending responsibilities until after the election and passed on the opportunity to approve key tax, health care, pension and domestic security policies. Efforts to address wrongdoing in corporate America also were left stalled in the Senate.
Corporate greed among a handful of business giants, auditing firms and brokerage houses has given Wall Street a black eye and left many investors, retirees and workers reeling from tanked retirement portfolios. Sweeping financial losses were felt among thousands of workers and investors who watched their life savings wiped out after heavyweight energy and telecommunications giants were forced to declare bankruptcy upon revelation of questionable auditing practices.
While Congress acted swiftly this summer to strengthen accounting standards and make the system more accountable and transparent to shareholders, investors and workers, other measures aimed at cleaning up corporate misdeeds that enable American businesses to skirt their tax obligations remain unresolved.
As the top Republican on the Senate Finance Committee, which has jurisdiction over U.S. tax laws, I am spearheading two bipartisan efforts to crack down on companies that are setting up shop off-shore just to evade their tax obligations and to prevent those that do create phony "headquarters" overseas from winning business contracts from the federal government.
Corporations that flee the United States to save millions in federal taxes and yet come back to Uncle Sam to win fat contracts with the federal government doesn’t pass the smell test. My bipartisan bill would prevent these companies from ever again receiving federal work. For those U.S. corporations who already have inverted, meaning they already are "headquartered" overseas for the purpose of lowering their tax burden, my legislation would recapture some of their improper tax-savings by requiring them to lower their bids to win government contracts. This would level the playing field for other federal contractors who stay and pay taxes in the United States.
A recent analysis by the nonpartisan auditing arm of Congress shows a handful of big players who’ve moved overseas to reduce their tax obligations continue to rake in lucrative government contracts. I agree with critics who argue the U.S. tax system puts burdensome pressures on U.S. corporations to stay competitive with their international counterparts. I’d like to fix the current system that overtaxes U.S. profits made overseas. But for the 25 or so companies who have fled the United States in the last 10 years for the sole purpose of skirting their tax obligations, they are taking the law into their own hands. In so doing, they are shifting the tax burden onto American workers and taxpayers to make up the difference.
A couple of other areas in corporate America needing attention include tax shelters and income disclosure. I’ve proposed bipartisan legislation that would crack down on corporate tax shelters. It would strengthen rules and require up front disclosure of tax shelters and impose tough penalties on abusive tax shelter transactions. In addition, I’ve also enlisted the White House to join me in my scrutiny over the disclosure of taxable corporate income and the disconnect between that and their earnings statements.
Reining in corporate greed and wrongdoing will help restore investor confidence, stabilize jittery markets, and get the economy back on the right track. Now more than ever, American companies ought to practice responsible stewardship that puts a premium on good corporate citizenship.
Good Corporate Citizenship