Courtesy of Mish.
Last Week I received an email from reader Eric in response to the "U.S. Corporate Tax Dodge" by Barry Ritholtz. First, let's discuss the "fair tax" proposal of Ritholtz.
In his article, Ritholtz sides with Fortune author Allan Sloan who wrote about Positively Un-American Tax Dodges.
Ritholtz and Sloan are upset at U.S. corporate executives who engage in "inversion”, defined "moving the location of incorporation to a tax haven and skipping out on paying U.S. taxes".
Sloan says “The spectacle of American corporations deserting our country to dodge taxes while expecting to get the same benefits that good corporate citizens get is unacceptable".
Ritholtz proposes 5 measures that would promote "fair taxes".
- Kick them out of U.S. stock indexes
- Create a one-time tax holiday that allows companies to repatriate off-shore cash at a reduced tax rate of 15 percent.
- Require “publicly traded U.S. companies and U.S. subsidiaries of publicly traded foreign companies to disclose two numbers from the tax returns they file with the IRS: their U.S. taxable income for a given year, and how much income tax they owed.”
- Lower the top tax rate from 35% 25% or 20% but close all the loopholes
- Stop single-company legislation: Thanks to K Street’s army of lobbyists, tax legislation, loopholes and giveaways are concocted that benefit single industries or companies.
"The U.S. provides an outstanding place for these companies to operate and for their employees and executives to live and work. They should pay their fair share," says Ritholtz.
Reply from Reader Eric
Reader Eric sent his comments to Ritholtz and copied me.
Mr. Ritholtz,
Concerning your complaint against companies leaving the US to cut their tax rates, would you apply the same logic to people in New York State who relocate to Florida, for example, to eliminate their state income and estate tax and also to avail of lower property taxes?
Don't New York state residents enjoy many of the same benefits you list for these various tax dodging corporations?
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