Clinton’s ambitious plan: Make U.S.-based corporations pay their taxes

https://www.washingtonpost.com/opinions/clintons-ambitious-plan-make-us-based-corporations-pay-their-taxes/2015/12/14/befce006-a2a6-11e5-b53d-972e2751f433_story.html

Last week , Hillary Clinton’s campaign released an ambitious plan for curbing tax inversions. It’s a good start, even if much more is needed.

U.S. corporations love to whine and complain about their onerous tax burdens, often citing the 35 percent top statutory tax rate on corporate profits. But with help from legislators, loopholes and clever tax advisers, their actual tax liability is far lower. On average, U.S. corporations pay an effective tax rate closer to about 20 percent, according to calculations from Gabriel Zucman, an economics professor at the University of California at Berkeley.

And some of the most sophisticated multinationals have infamously paid little or no tax at all, even in years when they reported billions in profits.

Large U.S.-based multinational companies have gotten really, really good at “shifting” their profits abroad — that is, manipulating their income statements so that even when they sell goods to U.S. consumers, the proceeds get booked in low-tax countries such as Ireland and the Netherlands. Zucman estimates that this profit-shifting alone costs the U.S. government about $100 billion in corporate tax revenue annually.
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