The Plain Dealer: Sherrod Brown and Walmart come together

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The Plain Dealer: Sherrod Brown and Walmart come together

The discussion between Brown and the corporate group known as the RATE Coalition (Reforming America’s Taxes Equitably) was prompted by the growing debate over tax reform. Senate Finance Committee Chairman Max Baucus, Democrat of Montana, has asked for ideas on tax reform that can be kicked around late this summer and fall, although the likelihood of a quick, comprehensive tax overhaul is about the same as PETA feasting on a banquet of Big Macs.

Members of the RATE Coalition, including Walmart, Lockheed Martin, Northrop Grumman and Macy’s, say the statutory corporate rate is way too high. Companies avoid paying this high rate by moving operations overseas or booking revenues in countries where sales are made and keeping them there. A company will still have to pay that country’s tax rate, but it’s cheaper than paying taxes here.

Unfortunately, this means that companies don’t bring back their overseas earnings. Tax reformers say that’s money that might otherwise pay for a company expansion or job creation. It’s worth noting, however, that during a temporary tax holiday on overseas earnings in 2004, much of that money came back only to be used to increase shareholder dividends or pay for stock repurchases.

This is where Brown comes in. Today, he and a co-chair of the RATE Coalition spoke on a press conference call in favor of a specific corporate tax-reduction proposal. Their idea is to narrow the difference between the foreign rates and those in the United States, but still charge a global minimum tax to eliminate the temptation of offshore tax havens.

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