Mike Shedlock

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".

  1. Kick them out of U.S. stock indexes
  2. Create a one-time tax holiday that allows companies to repatriate off-shore cash at a reduced tax rate of 15 percent.
  3. 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.”
  4. Lower the top tax rate from 35% 25% or 20% but close all the loopholes
  5. 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.

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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