By Joshua D. Sword
My grandfather and his brothers were West Virginia ironworkers, fashioning the buildings and bridges we still use in and around Charleston today. They were proud of their work and proud of their ability to support their families with good wages and benefits.
But those kinds of solid, middle-class jobs -- in mines, mills and factories -- have been disappearing for decades now. Why? Corporations have been taking operations to other countries so they can pay poverty-level wages.
What most people don't know is that they are also moving those jobs to avoid paying their fair share of taxes. Loopholes in the corporate tax code actually encourage U.S. corporations to hide profits in the Caribbean islands and other tax havens and to move jobs overseas. The devastating effects are felt right here in West Virginia.
Some highly profitable corporations, like Apple, make profits in the United States, set up dummy operations in another country, and then use accounting gimmicks to make believe those profits were earned overseas. This allowed Apple to make profits of $74 billion throughout four years on worldwide sales outside the United States and pay virtually no taxes to any country. That means the rest of us pay more or get less.
Offshore tax dodging has gotten completely out of hand, and the rest of us are picking up the tab. Because huge companies like American Express, Microsoft and Nike avoid their fair share of taxes, the average West Virginian pays $621 more each April 15, according to an independent study. The average West Virginia small business pays almost $2,300 more in taxes.
Currently, companies can deduct right away the costs of setting up and running offshore operations -- everything from crating and shipping machinery to building new foreign factories to severance payments to American workers who lose their jobs. And yet, corporations don't have to pay any U.S. tax on the profits from those new overseas operations until they bring the money home -- which they often never do.