Sunday, April 26, 2015

Good question - Greedy voters or greedy companies?

Having just come across Philip Greenspun's blog, I find he is full of great questions. I love fresh perspectives.

Here's one his questions:
Why are the stories about U.S. corporate tax avoidance about corporate greed rather than non-corporate greed?
The background that leads to his question.
“Ten Percent of S&P 500 Companies Avoid Paying U.S. Taxes” is a Bloomberg story that a friend cited on Facebook in disgust: “Plutocracy on parade.” The article notes that “At 35 percent, the U.S. corporate rate is the highest in the developed world.” (Actually closer to 40 percent if you include state taxes on corporate income; see KPMG and compare to the European average of less than 20 percent) So there are two potential stories here:

American corporations, their owners, and their managers are greedy because they are trying to avoid double taxation of profits by converting to REITs or they are trying to avoid the U.S. corporate tax on worldwide operations by moving to low-tax foreign jurisdictions.

Americans who don’t invest or work in private corporations are the world’s greediest people when it comes to demanding a share of the profits generated by fellow citizens who do invest and work in such corporations.

Story #1 seems to be all that we ever get. Nobody seems to be interested in why Americans who aren’t involved in a company feel entitled to take 40 percent of the company’s profits (and go to the polls to elect politicians who will take it for them)

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