TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, July 22, 2014

NY Times Debate: How Can the U.S. Stop Corporate Tax Flight?

NY Times Room for DebateNew York Times Room for Debate:  How Can the U.S. Stop Corporate Tax Flight?:

In recent months, several big U.S. companies have reached so-called inversion deals that will allow them to reincorporate in countries like Ireland and the Netherlands, where corporate taxes are lower.

Are these deals a sign that corporate taxes should be lowered so American companies can compete on a level playing field with foreign companies, or are they an example of self-serving greed that should be outlawed so companies built with American support pay their fair share?

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It's probably just me, but the NYT's shrill moral outrage over this or that type of tax planning produces limp, useless reporting. For more humor and whimsy, and far better explanation, might I recommend Matt Levine's tax reporting?

[Full disclosure: I don't know Matt t'all, but do enjoy his incisive business reporting and world-weary humor.]

Posted by: YoGabbaGabba | Jul 22, 2014 2:03:25 PM

PS, In the best Internet tradition, I did not read any of these but will summarize all of them:

Chris Edwards (Cato Institute): “For every problem, there is a solution that is simple, neat, and wrong.”
Chye-Ching Huang (Center on Budget and Policy Priorities): "there must exist final objective answers to normative questions, truths that can be demonstrated or directly intuited, that it is in principle possible to discover a harmonious pattern in which all values are reconciled, and that it is towards this unique goal that we must make; that we can uncover some single central principle that shapes this vision, a principle which, once found, will govern our lives".
David Cay Johnston (Syracuse): “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Sander Levin (Member, U.S. House of Representatives): The whole aim of Levin’s piece is “is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”
Tim Worstall (Adam Smith Institute): "It is a highly unstable theory about the world which has to assume that vast numbers of ordinary people, mentally equipped in much the same way as you or I, can simply be thoroughly and systematically duped into misrecognizing entirely where their real interests lie. Even less acceptable is the position that, whereas 'they'—the masses—are the dupes of history, 'we'—the privileged—are somehow without a trace of illusion and can see, transitively, right through into the truth, the essence, of a situation."

Posted by: YoGabbaGabba | Jul 22, 2014 2:31:47 PM

Whoever hides behind the name YoGabbaGabba is never going to make it in comedy because it requires developing tension based on actual events.
No reader here would know, based on these inane comments, that I repeatedly urged a serious study of how to eliminate the corporate income tax. Just eliminating it would be economically damaging as well as unfair. We have already developed rules for large and complex publicly traded entities, like REITs. We can develop rules with integrity for publicly traded corporations and other investment entities, but it will require advance analysis and open debate on the costs and benefits of simpler, smarter system.
Of course, if YoGabbaGabba believes it is proper for some people to have tax-free income and for everyone else to bear the burden of civilization then his or her smart aleck remark makes some (non)sense.

Posted by: David Cay Johnston | Jul 23, 2014 10:22:40 AM