The study concludes that the more that American companies can use foreign subsidiaries to lower taxes, the greater their incentive to invest and employ staff abroad. That means a steady, significant erosion of this nation's corporate tax base, amounting, the study says, to "many billions of dollars."
Why is it that other countries can survive without confiscating large sums of money from corporations that employ and PAY citizens in their country? Could there be other reasons that US corporations are looking for higher profitability? Maybe the other costs of doing business in the US are becoming a burden as well: health costs, regulations, lawsuits, etc?
Global capital presents a big challenge for tax collectors, and there are no easy answers. After careful study and debate, it might make a lot of sense to enact some other type of tax, like a European-style value-added tax, that could more efficiently capture the profits that currently escape the United States tax system.
What is unacceptable is for antitax forces and their allies in Congress to allow the current system to fail so they have an excuse to "reform" it, often in ways that are as much ideological as they are economic - by, for instance, eliminating taxes on profits, thus shifting the burden to wage earners. Genuine reform would start with ending abusive tax shelters abroad.
The last statement says it all. How dare these corporations try to remain competitive in a global economy at the expense of tax revenues in the US that feed the ineffective bureaucracies that have zero impact on our economy. It's a wonder we have any corporations in the US any more. Perhaps we should look at reducing the tax burden, rather than accepting that we would have to shift the burden to wage earners?
The New York Times > Opinion > Taxing Global Profits
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