Yet lurking behind Tuesday’s kabuki dance is a seminal issue, if only our debauched political culture can tackle it head-on.
That issue is this: The fate of companies and countries in a global age now diverge. The success of U.S.-based multinationals no longer assures the prosperity of American workers. If our schools leave much of our workforce unprepared, or our health-care system leaves costs uncompetitively out of control, these firms can find the next tranche of talent and services they need in Singapore or China or New Zealand.
A senior fellow at the Center for American Progress and the host of the new podcast “This...Is Interesting,” Miller writes a weekly column for The Post.
American-born executives at the helm of such firms are uncomfortable talking about this on the record. But in private they’ve told me the truth: These trends may be a pity for their country, but they’re not really a problem for their business.
This is the depressing disconnect Congress should be chewing on — not sideshows like one firm’s tax planning. Yet broader tax incentives, if properly designed, might offer a step in the right direction.
Ralph E. Gomory, an octogenarian and a former head of research at IBM who turned policy crusader, put it as follows when we spoke for my 2009 book “The Tyranny of Dead Ideas”: Companies want profits; countries want gross domestic product. In the old days, profits and GDP mostly went together in the United States for U.S.-based firms; nowadays, profits are increasingly found elsewhere, and that’s costing America some GDP.
The answer, says Gomory, is to reward the kind of behavior we want and, thus, “realign the interests of companies with those of the country.” Only in America is there a laissez-faire attitude toward this question. Gomory believes that we should adjust corporate tax rates according to the value added by the workers of corporations operating in the United States. A company with high value added per U.S. employee would pay a low tax rate, and those with low value added per U.S. employee would pay a high rate. This would encourage companies with high-value-added jobs to locate their operations in the United States.
Under an approach like this, of course, Apple might be looking at a tax cut, not a tongue-lashing. The moral of the story? Making Apple out to be rotten gets senators great press while solving precisely nothing.
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