Fix our corporate tax loopholes

Medtronic is ignoring its civic duty by fleeing overseas.

Ronald Dixon

One of Minnesota’s largest employers and the fourth-most profitable medical device company in the world,
Medtronic, is moving its corporate headquarters to Ireland. This process of moving the company’s legal address to another country, known as corporate inversion, won’t result in the loss of domestic jobs, but it has nevertheless caused controversy.

After fostering their business in an environment that allows them to thrive, companies like Medtronic are ignoring their civic duty and dodging, in aggregate, billions of dollars annually in taxes.

Republicans have blamed this phenomenon on America’s allegedly high corporate taxes. When we consider that corporate profits are at historically high levels, and that we have reached Gilded Age-degrees of income inequality, trying to solve this problem by further pampering the rich will only exacerbate income disparities and further drive their disproportionate influence in politics and the economy.

Alternatively, there are two solutions that will require companies to pay their fair share of taxes.

First, Congress should act to close the tax loophole that allows these companies to claim foreign status, whereby enjoying all of the benefits of operating domestically while dodging the tax costs. A business should be unable to have its cake and eat it too.

Second, we should follow the advice of former Secretary of Labor Robert Reich and treat all income made in the U.S., whether it’s from domestic or international companies, the exact same, especially in an era when a business’s nationality has become blurred and ultimately meaningless in the 21st century.

By closing tax loopholes and treating domestic and international revenues equally, business leaders will have to perform their civic duties and give back to the nation that provided the framework that allowed them to prosper in the first place.