Patriotism and Tax Havens

by | Aug 10, 2002

What defines a patriot these days? Is it one’s dedication to the principles of freedom, or is is it one’s willingness to place their life second to the needs of the state. These days, it looks a lot like the latter is the common view. Take for example, the corporate inversion issue, which has suddenly […]

What defines a patriot these days? Is it one’s dedication to the principles of freedom, or is is it one’s willingness to place their life second to the needs of the state. These days, it looks a lot like the latter is the common view.

Take for example, the corporate inversion issue, which has suddenly moved to the front of the agenda with the sneak passage in the House of a ban on federal contracts for companies who move their incorporation to tax havens. Corporate inversions are now being portrayed as a gimmick the wealthy use to evade their fair share of taxes.

Yet rather than being symptomatic of “corporate irresponsibility” and “greed,” both catch-all phases that are being used to include everything from cases of real fraud to any attempt to keep what one honestly earns, the corporate inversion movement speaks to one of the best traditions of America: the individual’s unwillingness to submit to stupid rules. The simple fact is our nation’s tax system is grossly unfair. The income tax is a boondoggle. The part of it that corporations are fleeing in droves is the part that unfairly taxes exports.

No other major country taxes exports, but the US does. That bias makes it a lot harder, if not impossible, for US firms to compete internationally. And that means jobs. Not just CEO jobs, but everyday jobs as well. We don’t even have to talk about high marginal tax rates or wasteful government spending here; at the most basic level it’s a stupid tax rule that threatens American business and American jobs.

Yet Senate Majority Leader Tom Daschle, D-S.D., said Tuesday the issue is one of patriotism with the Sept. 11 anniversary approaching.

“If I were a corporate CEO, one way would be to say that you’re proud to be an American company and you’re not going to go offshore to avoid taking some share of your responsibility to see that this country remains strong,” Daschle said.

If I were a corporate CEO, or even the lowliest assembly line worker, I’d tell Daschle to stick it in his britches. Yet in a nation founded by people who dumped tea in Boston Harbor rather than submit to England’s unjust taxation, the measure of a patriot has now become one’s willingness to impale themselves on taxes that are far more onerous and imposed with far more malice than what the colonists suffered. My, how we have come around.

–Made available through the Center for the Moral Defense of Capitalism www.moraldefense.com

Nicholas Provenzo is founder and Chairman of the Center for the Advancement of Capitalism.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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