Reform taxes to stop slick corporate accounting
Arguing in favor of cutting the corporate
tax rate, the Editorial Board throws domestic corporations under the bus. It ignores the Tax Policy Center report explaining that 75% of U.S. corporate stock is held by tax-exempt entities. This means that in many cases, dividends and capital gains are never taxed. The board’s solution inadequately addresses the actual problem — multinational corporations using aggressive tax strategies to store profits overseas, avoiding taxation. Domestic corporations pay the full rates and cannot compete (“High U.S. tax rates prompt firms to stash cash abroad,” Our view, May 25).
Multinationals want to keep cost accounting and transfer pricing to measure their tax liability. But by their nature, these tools are geared to help the corporations accomplish their goal of avoiding taxes. A sales factor apportionment tax system, on the other hand, would use proportional sales to measure how much profit was made in the U.S. That is the fair way to fix the tax code. David Morse Moscow, Idaho
“Raise more from corporations” misses
the mark by a mile (Opposing view, May 25). As a National Taxpayers Union Foundation analysis showed, corporate overseas tax inversions are a response to a broken tax code. Corporate managers have an obligation to investors to ex- plore every legal cost savings available. Enter inversions.
Congress should disincentivize inversions altogether by setting a corporate rate that’s internationally competitive. President Obama has proposed such a cut before.
The opposing view writer, Hunter Blair, argues we should not reduce our corporate tax rate “because skillful corporate tax engineers game the system.” That is exactly why we need to not only lower the rate, but also make the system simpler and more transparent. A tax code that bills corporations at 35% and features thousands of special-interest carve-outs is begging for crafty accounting. Pete Sepp President, National Taxpayers Union, Washington People should not defend these companies by complaining on their behalf about double taxation, particularly when every cent many U.S. workers make is at least doubly taxed for Social Security taxes and income taxes. And that money is taxed again whenever we buy anything (in the form of sales taxes). So don’t pity poor corporations that are being asked to help pay for the infrastructure they depend on to make profits. Patricia Li Wang
Asking government to increase business taxes is just asking for higher prices on goods and services. Liberals don’t grasp that consumers are really getting the tax increase. Mike Herman
Higher corporate taxes lead to lower business growth and lower wages. You can try to extract more tax revenue from corporations, but you can’t escape the consequences. Mark Cancillieri
We’ll never fix the corporate tax code. There are too many uneducated people supporting leftist politicians who want to make corporations pay their “fair share.” John Sirko