One of the main incentives driving a surge in U.S. corporations’ tax-driven overseas inversion deals would be pared back under a plan unveiled on Wednesday by two top Senate Democrats.
Though the plan was seen by analysts as unlikely to become law anytime soon, it draws further attention to the rising number of U.S. businesses moving abroad for tax reasons.
Dick Durbin and Chuck Schumer, the No. 2 and No. 3 Democrats in the U.S. Senate, said their plan would deter a practice known as earnings stripping, in which companies avoid U.S. taxes by shifting U.S. profits to jurisdictions with lower tax rates.
“This bill curtails the incentive for companies to use shady accounting gimmicks to avoid paying their U.S. tax obligations,” Schumer said in a statement.
This has been a hot topic lately. Almost every conversation I have had with someone from the Left on this subject has gone the same way: I talk about the taxes and the need to look at that burden, they talk about the greedy companies who take legal steps to minimize said burden, which Schumer refers to as “shady accounting gimmicks”. It is always an argument about policy and economics versus an emotional argument.
Schumer and Durbin would rather spend every waking hour thinking of ways to make people pay more taxes than even consider ways to have them pay less, because that would require a conversation about spending.
And we know people who are spending money that isn’t theirs don’t care about such things.
Also, I’m fairly certain the Chuckster’s math skills aren’t top shelf.