BGU Research Finds That U.S. Has More Tax Loopholes
BGU Research Finds That U.S. Has More Tax Loopholes
October 2, 2014
The New York Times — United States corporations, including Google, Facebook, and Apple have been moving money internationally in order to spend less on taxes in the United States. Generally these actions are legal (although often just barely).
Experts say that there is potential problem with U.S. companies shifting money abroad. “It is a significant problem for the revenue capacity of states and an immense problem for their capacity to maintain progressive taxation,” says Lawrence H. Summers, Treasury secretary under President Bill Clinton and President Obama’s first chief economic policy adviser.
Further, the scale of corporate tax avoidance is unclear. Despite an increase in corporate profits, corporate tax revenue remains the same amount of total economic activity in the U.S. as it did in the 1980s.
Americans seem to be the most nimble dodgers. The United States has a higher statutory corporate tax rate than Europe, but according to a recent study by Prof. Yaron Lahav, of BGU’s Guilford Glazer Faculty of Business and Management, Department of Business Administration.
and Prof. Reuven S. Avi-Yonah of the University of Michigan Law, European multinationals effectively pay a higher rate than their American counterparts.
Today companies need move little more than a post office box to gain the benefits of a tax haven. If the rules were tightened so that a company could claim a profit only where it really made it, it might decide to move a lot of operations and jobs there.
Read the full story on The New York Times website >>
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