Paul L. Caron

Friday, December 20, 2019

Corporate Tax Dodging Happens Because Congress Allows It to Happen

Institute on Taxation and Economic Policy, Corporate Tax Dodging Happens Because Congress Allows It to Happen:

Trump TaxAs usual, corporate spokespersons and their allies are trying to push back against ITEP’s latest study showing that many corporations pay little or nothing in federal income taxes. One way they respond is by stating that everything they do is perfectly legal. This is an attempt by the corporate world to change the subject. The entire point of ITEP’s study is that Congress has allowed corporations to avoid paying taxes, and that this must change.

Anyone who reads ITEP’s corporate study will find detailed explanations of how Congress must change the law to ensure that corporations pay. Alright, we get it, the study is a little long. For your convenience, we also provided a two-page executive summary, and you will find that the recommendations on the second page all involve Congress changing those very laws that corporations use to avoid taxes.

People who read our reports know full-well that we are not suggesting that corporations are breaking the law. If we believed that was the case, we would call only for better enforcement of existing laws. The fact is, the existing law, including the changes brought by the Trump-GOP tax law, is a mess crying out for the types of reforms that we suggest.

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When the organization deliberately misuses a term (“tax dodging”) and is then called on it (because, as they concede, what is happening is not tax “dodging” but rather “paying the tax that is legally due”), I do not think it is the “corporate world” that is attempting to change the subject….

Posted by: Matt | Dec 23, 2019 11:36:44 AM

Corporations are just a convenient conduit for collecting taxes. The prices for their goods and services will just be raised to pass along any increases in the amount of taxes paid. Which means the real payors are the consumers. It's like the conservation of mass of money. Taking it from the intermediary doesn't change who is ultimately paying. This debate is all cosmetic, no substance. The real issue is how much money does government deserve to siphon off, and what do the taxpayers get in return.

Posted by: ruralcounsel | Dec 20, 2019 3:25:32 AM