Reform taxes to stop slick corporate accounting: Your Say

May 31, 2016


Multinational corporations will always find a way to get around complex, onerous tax regulations.

[David Morse| May 31, 2016 |USA Today]

Letter to the editor:

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 (“The corporate tax mess: Our view”).

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.

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