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posted: 8/26/2014 5:01 AM

Politicians not doing what's best for businesses

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Sen. Dick Durbin and the Obama administration are upset that companies are considering "inversions," in which a company moves its headquarters overseas to reduce taxes. Sen. Durbin's immediate response is to create a bill to punish those companies. So rather than look for the root of the problem, he looks to penalize, which will solve nothing.

The reason companies are considering this approach is because the U.S. has the highest corporate tax rate in the world, and companies believe they have an obligation to maximize profits for their shareholders. The irony is that if the tax rate were lowered, profits would rise resulting in increased money to be invested in the company to provide growth and increased hiring. This would also bring in more tax revenue to the government.

Likewise, if our government reduced the tax rate on companies on overseas profits, companies would bring back money from overseas profits. This money would also be invested in the U.S. again, resulting in more hiring and more tax revenue for the government. But this would require thinking like a business person, not a politician.

Hank D'Ambrosio

Buffalo Grove

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