It was the best of times, it was the worst of times for companies to dodge taxes by moving to Ireland.
So
far, results have been mixed for new Treasury Department rules designed
to thwart deals known as "tax inversions," in which a U.S. company buys
a company in Ireland or some other low-tax locale and moves its
headquarters there to cut its tax bill.
Banana giant Chiquita on
Tuesday stuck by a plan to merge with Irish rival Fyffes and relocate
from Charlotte, North Carolina, to Ireland in one such deal.
This is a nice article in that it explains some of the ways that corporations can evade taxes. Thoughts?
Obama's Inversion Crackdown Not Enough To Keep Chiquita In America
Although morally I would like to say tax inversions should not be allowed, I can't help but to think of it as a product of our capitalist mindset. Even economic theory suggests that firms look only to maximize their profits. So, it should be expected that firms find loopholes in the system in order to increase profits. At the end of the day it's legal, even if it has negative effects on the US economy. Nevertheless, I think the government should try to eliminate these loopholes to foster more competition in the marketplace. However, like Wilkins said at the end of the article, it is unlikely the government will go against multinational corporations and Wall Street to do so. Ultimately, I think that companies are simply playing a game in which the government has had difficulty in specifying the rules. Is that necessarily the companies fault? I don't think so.
ReplyDeleteThis article is a great explanation for our hw, I think tax inversions should not be allowed. Our political system even makes it harder for anything to be done. “In order for any legislation to get through Congress, they’ll have to stand up to multinationals and Wall Street,” Wilkins told HuffPost. “No to be cynical but,” she laughed, “I don’t know about that.” That is real, unless this political systems, things could be done.
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