Beer Company Founder: Corporate Tax Rate Is Too High

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Beer didn’t originate in America, but it has a long and storied tradition right alongside hot dogs and apple pie. Samuel Adams beer is the embodiment of that tradition: a true, made-in-the-USA product that represents one of the most successful independent breweries in the country. Whether you’re a fan of the Boston Beer Company or not, what founder Jim Koch told the U.S. Senate this week should trouble you greatly. Koch, speaking to the Senate Homeland Security and Governmental Affairs Subcommittee on Investigations on Thursday, said that the current U.S. corporate tax rate was prohibitive to stateside success.

“We are vulnerable because we currently report all of our income in the United States and pay a tax rate of about 38 percent on that income,” Koch said. “Because of our broken corporate tax system, I can honestly say that I will likely be the last American owner of the Boston Beer Company.”

Koch went on to say that 90 percent of American beers were produced by companies under foreign ownership. He said that the tax code was making it extremely difficult for U.S.-based businesses to compete with overseas competition. If the Boston Beer Company were to relocate to another country, it would be given a tax break of up to 13 percent.

“There are solutions,” said Koch. “Cut the highest-in-the-world U.S. corporate tax rate to the mid-20s. And bring America’s international tax system in line with the rest of the industrialized world, by allowing U.S. companies to bring their overseas earnings home without additional taxes—just like the British and Canadians (among others) allow their businesses to do.”

This is a problem, of course, that goes well beyond the future of one brewery. Corporations in all sectors have been fleeing the United States in recent years, hoping to pad their profit margin by reducing their tax burden. President Obama has attacked these companies as “unpatriotic,” but whatever limited public backlash came out of those attacks quickly abated. Americans aren’t stupid, and we aren’t going to be conned into supporting an outrageous tax code just because the president puts it in emotional terminology. Business is business. And when your own country wants to penalize you for winning, what patriotic duty do you have to stay put?

If you want to foster a “made in the USA” economic culture, you have to do more than talk the talk. You have to limit regulations, devise the tax code so that it invites corporate patriotism, and make it easy on companies to make a profit. You can’t necessarily run the United States like a business, but it wouldn’t hurt to have some politicians with business experience in leadership. Or at least politicians who aren’t actively mistaken about what makes the economy go around.