But as the chief cheerleader for higher taxes of every kind, including high corporate tax rates, the Times should not be surprised that companies respond rationally to these incentives and seek ways to avoid taxes. The Times seeks out Len Burman of the "nonpartisan" Tax Policy Center (actually, it's an arm of the liberal Brookings Institution and the Urban Institute), who offers that, "In a rational system, a corporation's tax department would be there to make sure a company complied with the law. But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative."
That's one way of putting it. Another is to acknowledge that taxes are just another cost to a corporation. And a responsible company will seek to minimize costs and maximize profits. That's how companies are able to provide jobs. The corporate rate in the U.S. is 35 percent, among the highest in the industrialized world. Even "spread the wealth around" Barack Obama has recommended reducing it so that some of those dollars (and jobs) currently hiding out abroad can be repatriated. Besides, corporations collect taxes; they don't pay them.
Alternatively, in a rational system, the tax code would not be such a playground for the well connected and well heeled. It would not stretch to 71,684 pages requiring high-priced lawyers and accountants to interpret. It would not penalize the honest and reward the scofflaw, as our current system does, imposing a $2,000 yearly fee on every taxpayer to cover the loss in revenue from those who illegally evade taxes. It would not chew up 6.1 billion hours a year in compliance time. It might look more like the FairTax (www.fairtax.org).
The problem is not that companies like GE take advantage of the system. The problem is the bloated, burdensome, Byzantine system itself.
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