Comments on: Tax Activists: Big Business Must Pay Its Fair Share http://www.thekomisarscoop.com/2005/04/tax-activists-big-business-must-pay-its-fair-share/ Reports & Analysis by Investigative Journalist Lucy Komisar Fri, 03 Feb 2012 07:40:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Russ http://www.thekomisarscoop.com/2005/04/tax-activists-big-business-must-pay-its-fair-share/comment-page-1/#comment-8600 Russ Wed, 05 Dec 2007 23:18:30 +0000 http://thekomisarscoop.com/?p=92#comment-8600 Of course, there are legitimate, legal reasons and means of having assets and/or profits reside offshore, with or without U.S. tax deferral, and there are illegitimate, nonlegal devices. Both are in use. It's not helpful to paint it all with a broad brush. There are many corporations, for example, who have worked out offshore holding structures - with inherent U.S. tax benefits in place -WITH the IRS. In many cases, the IRS actually assists in ensuring that offshore holdings are structured in an acceptable manner. The overriding goal and reason for encouraging and allowing such structures is preservation of U.S. competitive position vs. other developed countries whose tax systems are, foundationally, more business friendly to their business enterprises than ours. So, yes - the wealthy U.S. person who parks millions in Costa Rica and supposes (usually on the basis of some kind of locker room advice down at the country club) that this makes her earnings non-taxable, should be caught, prosecuted and penalized. Corporations that set up offshore structures without and real attempt to use supportable, arm's-length pricing policies, or without acceptable U.S. tax results, should be held accountable. But, not all corporations or wealthy individuals with assets or income offshore, even if they enjoy tax benefits, are criminals or even problematic from a U.S. economic viewpoint. Remember: taxes are only one aspect of an overall economy, and not the only aspect upon which the smartest decisions are made. Of course, there are legitimate, legal reasons and means of having assets and/or profits reside offshore, with or without U.S. tax deferral, and there are illegitimate, nonlegal devices. Both are in use. It’s not helpful to paint it all with a broad brush. There are many corporations, for example, who have worked out offshore holding structures – with inherent U.S. tax benefits in place -WITH the IRS. In many cases, the IRS actually assists in ensuring that offshore holdings are structured in an acceptable manner. The overriding goal and reason for encouraging and allowing such structures is preservation of U.S. competitive position vs. other developed countries whose tax systems are, foundationally, more business friendly to their business enterprises than ours.

So, yes – the wealthy U.S. person who parks millions in Costa Rica and supposes (usually on the basis of some kind of locker room advice down at the country club) that this makes her earnings non-taxable, should be caught, prosecuted and penalized. Corporations that set up offshore structures without and real attempt to use supportable, arm’s-length pricing policies, or without acceptable U.S. tax results, should be held accountable.

But, not all corporations or wealthy individuals with assets or income offshore, even if they enjoy tax benefits, are criminals or even problematic from a U.S. economic viewpoint. Remember: taxes are only one aspect of an overall economy, and not the only aspect upon which the smartest decisions are made.

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