“Ten Percent of S&P 500 Companies Avoid Paying U.S. Taxes” is a Bloomberg story that a friend cited on Facebook in disgust: “Plutocracy on parade.” The article notes that “At 35 percent, the U.S. corporate rate is the highest in the developed world.” (Actually closer to 40 percent if you include state taxes on corporate income; see KPMG and compare to the European average of less than 20 percent) So there are two potential stories here:
- American corporations, their owners, and their managers are greedy because they are trying to avoid double taxation of profits by converting to REITs or they are trying to avoid the U.S. corporate tax on worldwide operations by moving to low-tax foreign jurisdictions.
- Americans who don’t invest or work in private corporations are the world’s greediest people when it comes to demanding a share of the profits generated by fellow citizens who do invest and work in such corporations.
Story #1 seems to be all that we ever get. Nobody seems to be interested in why Americans who aren’t involved in a company feel entitled to take 40 percent of the company’s profits (and go to the polls to elect politicians who will take it for them) while an uninvolved person in England will content him- or herself with just 21 percent of the profits (KPMG). Nor do reporters interview people in Singapore and Switzerland and ask “Why do you work so hard instead of just helping yourself to more than 17 percent of what your neighbors who are investors or workers in corporations are able to generate?”