I saw a news article a few weeks ago where Tim Cook told the Washington Post that he would not bring the money Apple has left oversees back to the US until the US charges a fair tax rate. In recent years many companies have been blasted for tax evasion such as Facebook, GE and Apple. This has caused the ire of many people and it’s a news story that we see often. The problem is we shouldn’t be mad at these companies for finding and taking advantage of these tax loop holes. Instead we should place the blame on our government. They are the ones who created and encouraged this problem in the first place.
In essence no company has ever paid one cent of taxes. Any tax that is levied on companies is passed off in the form of less jobs, lower employee wages with fewer benefits, higher product prices, attempts to lower manufacturing costs, etcetera. In other words we, the consumer and employees, will always shoulder the burden of these taxes. So why on earth do corporate taxes even exist? Why does the US insist on having one of the highest corporate taxes on the entire planet?
Simply put it is an easily exploitable political rally cry. Let big corporations and the rich pay all of the taxes is a popular political slogan. The problem is, this slogan is nothing but fantasy. The true way we could help our economy is by lowering or eliminating corporate taxes. We would then tell all foreign companies they could incorporate in the US as long as they have a minimum of 50 or 100 employees in the US. Thereby encouraging people to come here, create jobs and better our economy. This is a much better approach than running off every company we can and then blaming them for our broken economy. The true blame needs to be directed to the government and their broken policies.
I know taxes are a sticky issue and no one likes to hear someone should get a free ride. But remember, those taxes will always get pushed off to employees and consumers. Just as money doesn’t grow on trees, corporations also don’t have a magical money bag that then can use to pay their taxes. What our focus should be on is getting the federal government to not only lower or eliminate these ridiculously high federal taxes we have but also to actually balance our budget. Because an insolvent government who has also run all of its companies off shore would make a bad situation even worse.