We can’t afford to lose the pride of America

As Americans, we take great pride in the companies that call the U.S. home and choose to have their headquarters here. Companies that have been around forever, like GE, General Motors, Microsoft and Cisco, are American staples.

However, many American corporations that bring in billions in tax revenue have been forced to take their profits and hold them overseas or even consider moving their headquarters overseas to avoid our high federal corporate tax rates.

CBS’s “60 Minutes” recently dedicated a segment of the show to investigating this phenomenon.

A company investing its profits overseas in order to reap tax benefits is nothing new. In the 1980s and ’90s, companies began opening up accounts in Bermuda and the Cayman Islands, where there were no taxes.

Today, many companies have left the risky island banks and transferred their funds to more developed nations like Switzerland or Ireland. Why? The U.S. has the highest corporate tax rate in the world, at 35 percent, causing an estimated loss of $60 billion a year in revenue. Meanwhile, every developed nation has been slashing its tax rates in an effort to lure American business profits and jobs. Even Canada, our northern neighbor, recently cut its rate to 16.5 percent.

While American CEOs say they would love to keep their money here, our current tax rate will simply make them uncompetitive in an increasingly global market.

According to “60 Minutes’” calculations, places such as Zug, Switzerland, a small town with an estimated population of 26,000, has become the new home for almost 30,000 companies, many of them American. Zug’s corporate tax rate is listed at about 16 percent. Ireland has reduced its rate to 12.5 percent. Economists estimate that over the past 10 years, 100,000 manufacturing and research jobs have moved from the U.S. to Ireland.

In 2004, Congress tried to put an end to tax dodging by passing a law mandating that any American company that moved profits offshore would still have to pay the 35 percent corporate tax. Tax lawyers, however, have managed to find loopholes, and the law is basically moot.