Viewpoints: Is Tax Avoidance Destroying America?

When Donald Trump was recently asked what his tax rate is, he irately responded, “It’s none of your business.” And Trump has repeatedly stated that “I fight very hard to pay as little tax as possible.”  

Warren Buffett famously admitted that he pays a smaller share of his income in tax than his secretary.

And Mitt Romney paid a lower effective tax rate in 2011 than a waitress earning $2.13 an hour.

Tax “fairness” is a key issue leading into the 2016 elections and has many Americans asking the question:

Why don’t the rich pay their fair share in taxes? has compiled a variety of sources and viewpoints from around the world.

United States – Boy Genius Report (BGR), 10/8/15: How much money does Apple save by not bringing its cash hoard to the U.S.? It turns out that it’s a lot: $59.2 billion is the latest number, based on $181.1 billion in cash that Apple holds in offshore accounts. The number comes from advocacy group Citizens for Tax Justice… looking at how much money corporations including Apple, Google and Microsoft save by parking their money in tax heavens. … Plenty of other major American tech companies including Cisco, HP, Oracle, Qualcomm, Netflix and others employ similar tax tricks to avoid paying lots of taxes. …Google increased the amount of offshore cash from $7.7 billion to $47.4 billion in past years. Similarly, Microsoft increased its cash pile abroad from $7.5 billion in 2007 to $108.3 billion in 2014 – the company would owe $34.5 billion in U.S. taxes.

United Kingdom – The Guardian, 4/7/16: The world’s rich, well-connected elite play by a different set of rules from everyone else. …The real scandal here is not the rules people broke, but rather how the richest segment of the world population legally maneuvers to avoid paying their fair share of taxes. They avoid tax liabilities through dodgy offshore accounts and shell companies set up in countries that sell themselves as tax havens. … Offshore accounts, shell companies, and inversions benefit the richest individuals and corporations while cheating hardworking families. Sadly, many politicians around the world, including Republicans in the United States Congress, have refused to take any meaningful action to close these loopholes. … Instead, they attempt to balance the budget on the backs of those who can afford it least – students, working families, and retirees.

United States –, 3/2/16: Critics are correct that being under audit does not bar Trump from releasing his returns. … In politics, if you’re explaining, you’re losing, and who wants to explain one’s own complicated tax maneuvers to the voting public? … His return will reveal his average tax rate and total taxes paid. … Who knows? He may have offshore accounts, or he may have participated in tax shelters that the IRS is currently probing. … So what could be in there that Mr. Trump wants to keep hidden? … It’s safe to say that Trump’s campaign has not been built on detailed policy proposals. Rather, it is based in large part on the image he projects as a very wealthy and successful businessman. He’s a winner, and if we elect him president, we’ll be winners, too. But what if he’s not the winner we think he is? … The bombshell could be the answer to the question Rubio has been asking lately: “You know what they say about men with small hands?” Yeah, they have small incomes.

United States Market Watch, 4/7/16: America’s super-rich are hiding their wealth from taxes quite legally here in the U.S., without having to send it to Panama, or the British Virgin Islands, or any other sunny place for shady people. … Here in the U.S., the oligarchs are hiding trillions of dollars in plain sight, and it can hardly be touched — thanks to the generous provisions of the U.S. tax code. …Say what you like about our Congress, but it’s the best legislature money can buy. … In a nutshell: Working stiffs are actually taxed, proportionately, much more heavily than the super-rich.  Income is taxed, but wealth isn’t. … A rich property tycoon like Donald Trump could pretty much avoid taxes altogether by taking non-cash “depreciation” charges against his cash income each year. … According to the IRS, the average person in the top 400 taxpayers earned $264 million but paid just 22% in taxes.

Australia – The Age, 5/14/16: Republican presidential candidate Donald Trump has pushed back against renewed calls for him to release his tax returns before the election, saying the rate that he pays is "none of your business." …Mr. Trump, a billionaire real estate developer who has boasted of his wealth during the campaign, was asked why he had been willing in the past to release his taxes to Pennsylvania and New Jersey officials when seeking casino licenses, even though he was being audited by the IRS."At the time it didn't make any difference to me. Now it does," Mr. Trump said. …"There is only one logical explanation for Mr. Trump's refusal to release his returns: there is a bombshell in them," [former Massachusetts Governor Mitt] Romney said in a Facebook post on Wednesday.

France – France 24, 4/26/16: The revelations included in the Panama Papers have focused global attention on the use of tax havens by the wealthy. "More than beautiful beaches and attractive tax-free shopping – Panama and Delaware are both go-to destinations when shopping for secrecy," anti-corruption campaign group Transparency International said earlier this month. "But Delaware actually dwarfs Panama when it comes to shady business – its home to thousands of secret companies and US laws make it so that the public can’t know whose behind them. Drug dealers, terrorists, the corrupt – you name it." …Both Clinton and Trump…are owners of businesses registered at the offices of Corporation Trust Centre (CTC)– a nondescript two-story building in the city of Wilmington Delaware…They are not the only ones. Some 285,000 companies including…Apple, American Airlines, Coca-Cola and Walmart are also registered at the 1209 North Orange Street office building, in a state notorious for its financial loophole that has helped tens of thousands of businesses avoid paying billions of dollars in taxes.

Lebanon Daily Star, 5/13/16: Trump has said only a “really stupid person is paying a lot of taxes.” …Trump, with trademark modesty, told the AP that “nobody knows more about taxes than I do – maybe in the history of the world.” And he’s been clear that he tries to pay “as little as possible.” Tax experts say he might even have owed no income taxes in one or more recent years by using real estate depreciation provisions and carrying forward business operating losses from previous years.

United States International Business Times, 5/14/16: Saying he didn’t think voters have a right to see his returns before they vote, Trump denied having any foreign bank accounts. In an op-ed piece in the New York Times, columnist Paul Krugman said he suspects Trump’s tax returns hide a “dirty secret,” possibly showing the real estate mogul isn’t as rich as he says he is, a revelation Trump likely would find quite humiliating.

United States PBS, 2/26/16: Trump predicted what anyone reviewing his tax returns would find: “nothing, nothing.” But the odds of being randomly audited every year for a decade is vanishingly small — and Trump’s statement that “four or five” years of his tax returns are actively being audited raised even more questions. The IRS’s normal statute of limitations for an audit is three years — though that time frame is extended in instances of substantial underreporting and there is no time limit on reviews in the event of fraud. … Tax experts say his explanation has them scratching their heads — emboldening Trump critics who argue that the celebrity businessman-turned-candidate’s personal finances remain unexamined.

United States The Raw Story, 3/20/16: If you get audited year after year after year by the IRS it suggests that they’re finding serious problems and that’s why they keep coming back at you.  … The tax system in this country is damaging the country, but the solution is not lower tax rates; that’s just more giveaways for people at the top. The solution is we need an entirely new federal tax code. We have in America a great federal tax system…for 1960. But we don’t live in that world anymore. We live in a totally different economy where wealth and the flows of capital are very different than they were in the 1960s. We are now moving from an industrial society to a digital society. That requires a new tax system. History shows that if you don’t modify your tax system to keep up with economic changes, you eventually destroy your society.