Inversions to Avoid Taxes are Patriotic

Companies are moving overseas to avoid taxes in America.  What about this move is disagreeable in a free market economy like America?  Why does Obama call this “unpatriotic”?  If you avoid taxes by putting money into an IRA, are you “unpatriotic”?

Some observations..

Why does Obama’s government assume they have a right to taxes, and others are unpatriotic legally avoiding them?  If you don’t like the law, work to get it changed.  The starting position is no taxes – the government must convince the population to pay taxes, not the other way around.  America imposes a 35% tax on world-wide earnings of American companies, which is the highest rate in the world among developed nations.

If Obama’s government can call legal corporate financial management unpatriotic because it avoids paying taxes, then what is your IRA?  Your IRA uses a tax loophole on the books to not pay taxes on your earnings.

Let’s be clear – inversions do not cost the government anything.  They prevent the government from taking more.  Look up the definition of the word cost.  It includes “paying”, “spending”, “giving up”.  This government spin is similar to twisty word use of “saving money” by really “spending less”.  My savings account does not go up when I buy the cheaper pants.  Or “unemployment went down” when really the rate of unemployment rising went down.

Most fundamentally, let’s consider freedom.  The core argument against inversions is that corporations should not be free to move out of an oppressive situation.  Ever hear of the Berlin Wall?  Every hear of Boeing trying to leave Washington state?  Traditionally, Americans have believed that freedom is patriotic.  These days, perhaps the concept is, but the actual exercise of freedom seems to be appreciated less by government powers.  If you don’t believe in this tension, consider the issues of guns.  Overall, it appears a shift is happening in American culture: we value sufficient presence of the government more than freedom.

What exactly is the proposal to these companies?  That they should on-purpose stay and pay more taxes?  Shall we make a law to forbid moving out of America?  How about moving out of a State?  California pursued this concept about 20 years ago, when they went after Nevada retiree’s income because the retirees had earned the retirement while working at a job in California.  Under these rules, if you ever touch ground in California as a worker, you are forever indebted to the state.  California lost in legal battles with Nevada.

From the article linked above, a source notes that “To the extent that the U.S. creates more barriers to inversion, it may just encourage more U.S. companies to be sold.”  Okay.  Make new laws forbidding inversion and all our companies in addition to our land will be owned by foreigners.  I’m not sure that’s the desired effect.


About Brian

Engineer. Aviator. Educator. Scientist.
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