Taxes: I can’t stand them. Especially from governmental bodies that too easily tap property and business owners to satiate their lust for bloated programs and spiraling payroll.
A few years ago, I won a tax appeal on my property taxes and ended up saving more than $1,000 in one of the most highly taxed counties in the country. Yet in less than three years, thanks to our “responsible” lawmakers in county, municipal and school government, my savings has been sawed off like a fragile tree limb.
As a nation, there are two areas of taxation in which our country is at a dangerous crossroads: the federal tax code and our nearly bankrupt transportation infrastructure.
When it comes to the federal tax code, our lawmakers on the Beltway shout and pout about a broken system, posturing and clamoring before supporters while shirking their responsibility. As the fake debate goes on (there really is no serious discourse occurring in D.C.), many good companies who believe in America are exporting jobs and, in a growing number of cases, are being acquired by overseas firms in what has become a worrisome wave of M&As in the supplier community.
Why worrisome? Many international companies furlough longtime workers, cut investments in marketing and operations and seek to squeeze bottom-line profits while compromising on services to the retailer.
The most recent criticism comes from Jim Koch, head of the Boston Beer Co., maker of Samuel Adams. Do you ever wonder why nearly 90% of beer made in America is produced by foreign-owned firms?
In a report in The Wall Street Journal, Koch related how his domestically owned company faces serious disadvantages because of the U.S. tax rate. Speaking before a Senate subcommittee, Koch lamented that $1 of pretax earnings in the United States is worth 62 cents under American ownership but 72 cents under foreign ownership.
“Like Samuel Adams … we were born in America, have grown because of the advantages available in the United States, and don’t mind paying our taxes here,” he told the subcommittee. But due to tax-code inequities, Koch said he would “likely be the last American owner of the Boston Beer Co.”
I want to be clear: This is not a criticism of international companies acquiring American brands. It’s a criticism of a system that punishes an owner for being an American doing business in America.
One person who gets it is U.S. Sen. Rob Portman (R-Ohio), who recently defended American companies forced to make unpopular investment decisions: “If there’s a villain in the story, it’s the U.S. tax code, and frankly it’s Washington.”
While the presidential candidates barnstorm across the country blustering about nothing, this is the kind of critical policy issues that must be tackled.
Here’s another: America’s highway nightmare. Our transportation infrastructure is a mess. I live in New Jersey, where there are inadequate means to shuttle workers from their homes to their jobs in New York. It’s a debacle that could have been averted but that our governor ignored for political gamesmanship. Similar stories are playing out across the nation to the point where members of both the Republican and Democratic parties finally agree that things are really bad.
With the Highway Trust Fund virtually bankrupt, lawmakers passed a short-term funding plan to avert bankruptcy for three months. Cute. What is needed is a long-term solution, and there is one that is reasonable and would provide a long-term solution.
The federal gas tax has been 18.4 cents a gallon since 1993. That’s the same year Bill Clinton and Al Gore were running the White House, and the same year Whitney Houston’s ballad “I Will Always Love You” reigned on the Billboard charts. It was a time when many of us either had no Internet or relied on AOL, and frequently plugged our phone line into our computer to download a few emails. Few of us owned a cellphone (forget about smartphones), and there was no such thing as social media.
Twenty-two years is a long time. And while tobacco taxes have sizzled since, it is reasonable to increase the U.S. gas tax by 8 to 10 cents over two years to ensure a Highway Trust Fund that is solvent, that allows us to tackle an infrastructure critical to commerce and long-term economic prosperity.
My view is heresy to anti-tax purists, but the alternatives, including raiding other federal funds or selling oil from our Strategic Petroleum Reserve, are stopgap measures that can’t fill a gaping hole.
And I’m not alone: The problem is so egregious that organizations representing fuel marketers, truckers and even the U.S. Chamber of Commerce—not exactly tax-and-spend liberals—have gone on record in support of raising the gas tax.
As the upcoming presidential and congressional elections unfold, I’ll look for the candidates who are willing to address the problems that threaten our great country’s ability to effectively compete in an increasingly global economy.
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