Yesterday, the Colorado House passed House Bill 16-1275, “Concerning the taxation of a corporation’s state income that is sheltered in a foreign jurisdiction for the purposes of tax avoidance,” on a 34-30 party-line vote. The Grand Junction Sentinel’s Charles Ashby reports on the debate over the bill:
Democrats say it’s a matter of fairness that all companies earning profits in Colorado should pay taxes. Republicans say this isn’t a good time to force that issue…
House Speaker Dickey Lee Hullinghorst, D-Boulder, said Republicans’ opposition of the measure only goes to show why voters have such a mistrust of government. It’s the Colorado voters, and not big corporations, who lawmakers represent, and it’s for them the bill is intended to bring fairness, she said.
“We’re sending a message to the hard-working people of Colorado that we stand behind them,” she said. “We stand behind leveling the playing field for them. This is taking one small piece of our tax code and saying to big corporations, ‘You will no longer have the opportunity to pick a tax haven and not pay taxes.’ We all pay our income taxes. They should have to pay, too.” [Pols emphasis]
House Republicans were, needless to say, unreceptive to these arguments–but in the course of opposing this bill, at least one Republican legislator went a little too far in standing up for the rights of corporations to stash their cash overseas to avoid taxes:
LAWRENCE: This isn’t about leveling the playing field. This is about getting more money because we mismanage funds down here and we need to spend more. So we’re looking for pockets everywhere we can find them.
And because companies are using a legitimate tax loophole, [Pols emphasis] that we all take advantage of in one way or another, whether it’s our home mortgage deduction, whether it’s a home office deduction, there are benefits that each of us take advantage of when we file our taxes every year. This is one that corporations take advantage of. And it’s legal.
Got that, Mr. and Mrs. Taxpayer? Your mortgage deduction is just like what corporations do when they shelter their profits in the Cayman Islands! Never mind the polling that shows 73% of Americans want loopholes allowing U.S. taxes to be avoided by shifting income to overseas tax havens closed.
We’re going to go out on a limb and assume that 73% of Americans do not feel that way about their mortgage deduction.
We recognize that the debate about tax policy and tax avoidance by corporations and wealthy individuals is complex, and that sincere individuals can argue both sides of the question. With that said, Rep. Lawrence’s equating offshore tax havens with the mortgage deduction so many of her constituents rely on to afford their homes betrays a serious lack of judgment, empathy, or both.