The latest gambit by American corporations to lower their taxes even more is to take advantage of what is known as ‘corporate inversion’. The way it works is for a big US company to buy a small company in a country that has favorable tax laws, Ireland being the current favored nation. They then ‘invert’ the relationship, claiming that the foreign company is the parent one while the US one is the subsidiary, even though nothing else has changed. This enables them to pay the lower taxes of the other nation while enjoying all the benefits of being in the US.
Once again, this reveals who are the moochers taking advantage of the system. Wal
Martgreen was the latest corporation considering doing this but they have apparently backed off, maybe because of the bad publicity this practice has garnered.
Actually, I have felt for some time that we should get rid of corporate taxes altogether because those taxes can be gamed much more easily than personal income taxes. More importantly, messing around with corporate tax rates is the main activity of lobbyists for businesses and the source of much of the money that business give politicians and that is corrupting the political system.
Eliminating corporate taxes would mean that corporations would get a boost in profits that would translate into more money for their executives and shareholders, as well as (hopefully) lower prices for consumers. The government could make up the loss in revenue by increasing personal income tax rates, especially at the higher income levels, to make up the difference.
The Daily Show and The Colbert Report did pieces on this phenomenon.
(These clips aired on July 30, 2014. To get suggestions on how to view clips of The Daily Show and The Colbert Report outside the US, please see this earlier post. If the videos autoplay, please see here for a diagnosis and possible solutions.)