Month: April 2011

The American public views foreign aid as the kind of spending the Government should cut.  I’ll venture that few understand the aid that the Tax Code supplies for the foreign operations of U.S. companies.  This aid is exemplified by General Electric’s manipulation of the Code to use foreign operations to reduce its U.S. tax bill. It is explained in great detail in Edward D. Kleinbard’s “Stateless Income,” downloadable at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1791769.

Here’s the antipathy to foreign aid, from http://www.economist.com/blogs/democracyinamerica/2010/04/economistyougov_polling:

Folks like to point out that the USA has an unusually high corporate tax rate (35 percent).  But they don’t mention:

(1)  Some say our corporate taxes paid as a percentage of GDP are about average.  See http://www.oecd.org/dataoecd/48/27/41498733.pdf (Table B); that’s thanks to loopholes — or call them special rules.  Bruce Bartlett says ours are the lowest among developed countries.  http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

(2) We don’t have a VAT.  All other developed countries do.