Missed opportunities
Tax breaks for special interests, offshore firms go unchecked
(CNN) -- House Democrats missed two important opportunities last week.
On Thursday, the House of Representatives approved legislation to alter the corporate tax code, provide $155 billion in tax breaks and add billions in federal spending to special interest groups. And on Friday, House Democrats failed to block a multibillion-dollar Department of Homeland Security contract for Bermuda-based Accenture.
The House corporate tax bill was supposed to resolve a trade dispute with Europe. But to get much-needed support from House Democrats, tax writers added a host of unrelated provisions. At a time when the federal budget deficit has reached a staggering half trillion dollars and our national debt has surpassed $7 trillion, additional special interest spending is something that this country can ill afford.
According to the Citizens Against Government Waste's Congressional Pig Book, government special interest or "pork" spending has totaled an incredible $185 billion since 1991. The group estimates that without major budget reform, there could be another record level of pork in the next year. Unfortunately, more pork expenditures are exactly what the House corporate tax bill (House Resolution 4520) brings.
In addition to reducing corporate taxes, the bill adds a sales tax deduction in several states as well as a tobacco buyout. That's not to mention tax breaks for fishing tackle boxes and Puerto Rican rum.
Rep. John B. Larson, D-Connecticut, called the legislation a "special interest giveaway that will drive more American jobs overseas and further expand the deficit."
"The majority has squandered an opportunity to positively address a problem, instead choosing to use the chance to load down the bill with unrelated and unnecessary corporate tax breaks," Larson said.
In fact, the bill will add an estimated $34 billion to our already out-of-control national deficit.
One day after the passage of the House corporate tax bill, House Democrats blew another chance to take a stand for America and American workers by failing to review the Accenture receipt of a $10 billion homeland security contract.
Congress, Democrats and Republicans alike, should be doing more to prevent government contracts from going to companies that set up headquarters in offshore havens. More than half of the top 100 contractors doing business with the government also have subsidiaries in tax-haven countries. It is no wonder that corporations, which paid about 40 percent of U.S. tax revenues in 1943, now pay only about 7 percent of federal revenue.
Fortunately, senators are discussing possible ways to block the Accenture deal when the Department of Homeland Security appropriations bill comes to the Senate floor.
Sen. Byron Dorgan, D-North Dakota, takes issue with awarding government contracts to companies that create subsidiaries in offshore tax havens.
"These are the kinds of companies that want all the benefits of American citizenship and all the benefits from doing business with the federal government, but they don't want to bare the burden of the responsibilities of paying taxes to our government," Dorgan says.
Dorgan is absolutely right. These companies should not be rewarded for playing offshore tax shell games. Nor should taxpayers be forced to pay for an outrageously expensive corporate tax bill filled with wasteful spending. But as long as voters don't demand more of our elected officials, we'll continue to have a government best suited to serve special interests.
