Our accountants are better than your regulators.
The Treasury Department today came out with a series of arcane new tax regulations in the hopes of stemming corporate inversions. Inversions happen when U.S. companies merge with a foreign company while usually retaining U.S. operations. Their purpose is to avoid punitive U.S. double taxation on income earned overseas. The Treasury regulations (far too boring to get into any detail) seek to curb the most common ways in which income is shifted to avoid IRS taxation on income which has already faced taxation in other countries.
I’ve got bad news for the Treasury Department: every large company in America has a team of super smart accountants who have already come up with ways around these new regulations. Regulations will never be able to catch up with the ingenuity of super smart accountants in suspenders who think depreciation jokes are funny. Not gonna happen.
Look, inversions happen for two basic reasons. Until such time as we actually fix these two causes of inversions, they will continue to happen.
The post identifies the high corporate tax rate and the double taxation of income earned abroad as the problems that need to be addressed. As we have mentioned here before, those options are never considered by Democrats. The continued demonizing of corporations and the money they earn (seen most recently during the Climate Commies’ “Flood Wall St.” march) is the new cornerstone of leftist politics. If they can convince the great unwashed that corporations and their profits are inherently evil, the case can always be made for more confiscatory tax laws and regulations. Lower taxes simply aren’t an option.
They never will be as long as the progressive fringe controls the Democrats.