From the Tea Party to progressives, Donald Trump to the president, American businesses are being skewered. They’re lambasted as unpatriotic for pushing American profits overseas and corporate inversion, greedy for paying huge CEO salaries while laying off workers, and unscrupulous for “buying” Washington tax loopholes and other favors.
It’s difficult to disagree. Financial firms caused our 2008 meltdown. Drug companies carved themselves out of Obamacare and still charge Americans more than citizens of other nations. And young entrepreneurs create “unicorns” and quickly become billionaires while American wages stagnate.
The business community is so disdained that President Obama, in his final State of the Union address this month, made no news when he blamed business for the nation’s economic woes. “It has been difficult to find agreement over the last seven years … [over] what role the government should play in making sure the system is not rigged in favor of the wealthiest and biggest corporations,” he said.
“[A]fter years of record corporate profits, working families won’t get more opportunity or bigger paychecks just by letting big banks or Big Oil or hedge funds make their own rules at everybody else’s expense. … [W]ages haven’t gone up. Those decisions are made in the boardrooms that all too often put quarterly earnings over long-term returns.”
While the media, most other politicians and even the business community let these accusations go unanswered, these charges are simply not grounded in fact.
Business is not responsible for our American woes. In fact, American businesses are not only saving our economy and creating jobs, our nation still has one of the world’s healthiest economies, if not the strongest.
And what’s most miraculous is that these businesses have survived the past seven years of a Washington policy apparatus whose actions have ranged from gross negligence to absolutely harmful to business and job creation: Record deficits. Nearly doubling our national debt. Higher taxes. More than 80,000 pages of new and proposed rules for businesses — and the latter was in 2015 alone. The U.S. Chamber of Commerce says, “[s]ix of the seven years of greatest regulatory activity have now taken place on this president’s watch.”
New laws imposing everything from costly mandates for employers on health care to new rules on conflict minerals, energy and hiring. Meanwhile, nothing is being done to bring down entitlement spending. And every day we hear calls for higher taxes, new entitlements, new overtime mandates and new rules on businesses.
Can you blame American employers if they’re wary of hiring or considering moving offshore? Our current government has made it increasingly difficult to create new jobs and locate businesses in this country.
Strong business profits are key to American prosperity because profitable companies pay more taxes. And at 39.1 percent, we have the highest corporate-tax rate in the industrialized world. Take Walmart, for example. In the 12-month period ending Jan. 31, 2015, the company paid more than $6.1 billion in corporate income taxes.
More, American corporate profits benefit American shareholders. Roughly 55 percent of American households own stocks, according to an April 2015 Gallup poll. And many pensions are funded by stockholdings. We should want our companies to be profitable, as they’re funding our government and ensuring our retirements.
At least one presidential candidate understands that American businesses are trying to compete globally despite the U.S. government tying their hands and binding their feet. During the Jan. 14 Republican presidential debate, Sen. Marco Rubio of Florida challenged Trump’s plan for huge tariffs on imported goods from China.
“[T]he better approach, the best thing we can do to protect ourselves against China economically, is to make our economy stronger, which means reversing course from all the damage Barack Obama is doing to this economy,” Rubio said.
“It begins with tax reform. Let’s not have the most expensive business-tax rate in the world. Let’s allow companies to immediately expense. It continues with regulatory reform. Regulations in this country are out of control … and all of the rules they continue to create and propose are hurting us,” the Florida senator said.
We need a change in Washington. Rubio understands that businesses create jobs, pay taxes and fund retirement plans. They’re not the enemy, and in fact, we need strong American businesses and policies encouraging them to grow and hire more Americans.