Fleeing Taxes


What would you say to someone who tried to avoid taxes by registering as a resident in a state where he had, say, just a mailbox? Better yet, what would that state’s department of taxation say?

No deal, to be sure. But businesses are “moving” like mad, and “merging” to avoid U.S. taxes. The Treasury Department is objecting, according to a story in The New York Times, but it looks like they are going to continue to get away with it.

As the Treasury Secretary put it in his letter to Congress calling for action, “The firms that engage in these ‘inversions,’ still expect ‘to benefit from their business location in the United States, with our protection of intellectual property rights, our support of research and development, our investment climate and our infrastructure, all funded by various levels of government.’” And in most cases, few employees will actually have to relocate.

But nothing will be done because those businesses have friends in Congress. “Republicans in the House . . . have so far declined to pursue legislation on inversions and may not call a hearing or bring a bill to a vote.”

As a result of these and other manipulations of the tax code, our corporate tax rate is nowhere near what is should be. But without someone to pin the blame on, the public will continue to be virtually ignorant.

And it’s perfectly legal, unlike “moving” to another state without actually “moving.” Where are our “friends” when we need them?