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Tax Day

Tax Day Highlights Broken Promises and a Need for Transparency

On Tax Day 2019, the first year of data on corporate taxes under the Tax Cuts and Jobs Act (TCJA) are coming in.  Those who championed the corporate reforms promised, among other benefits, that the changes would end the offshore shell games by multinationals, profits stashed in tax havens would return to the U.S., and the new competitive rate would attract a flood of foreign direct investment.

Opponents of the new law, like the FACT Coalition and our members, argued that the incentives would have the opposite effect: the offshoring of profits would continue and the incentives might well create new (unhelpful) distortions influencing corporate behavior.

It is now time to look at what actually happened.  To get a better sense of the impact, consider the following recent excerpts from various news reports and analysis by tax experts.

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A Taxing Headache from Congress

Just in time for tax day, the nonpartisan Congressional Budget Office is out with a new analysis of the Tax Cuts and Jobs Act. It is one of the many reminders that, as we file this year, we are already thinking about next year, thanks to the recent rewrite of the nation’s tax laws.

The CBO weighed in with estimates that are worth a serious review. They looked at, among other provisions, the international corporate tax changes and attempted to answer these questions: Will the new rules stop corporations from using accounting gimmicks to shift profits offshore? Will the law stop the gaming?

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Tax Day for You, Tax Holiday for Multinationals

State Legislators are Increasingly Stepping in to Combat Offshore Tax Haven Abuse
It’s Tax Day. Odds are, you’ve already filed your taxes. Maybe you filed through a tax filing software, or maybe you hired an accountant to help you puzzle through the deductions you might be eligible for. Or, maybe you filed yourself, old-school-style, filling out your 1040 in your kitchen. Or, maybe you forgot, and this blog will serve as a last-second reminder—go file your taxes!

All of this is to say: you’ve fulfilled your tax responsibilities.  No doubt, the biggest corporations have filed theirs’s too.   But, unlike you, they have an army of accountants to ensure they take advantage of every last loophole and gimmick to cut down on their tax liability to near nothing.

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The Tax (Avoidance) Day is Approaching

On Tuesday, Americans Will Pay More in Taxes Because One Group Shirks its Civic Responsibility: Multinational Companies
Though they probably don’t all agree on every detail, most Americans see paying taxes as a civic duty.  Even so, it’s unlikely very many enjoy the paperwork and stress involved with Tuesday’s looming tax deadline. With few days left to go, millions of Americans are sitting down to get everything just right, and make sure they are paying what they owe—and not a penny more.

Wanting to minimize your tax liability is not unreasonable. Less reasonable is spending billions lobbying congress to create loopholes to be exploited in order to avoid nearly all of the taxes you would have otherwise been required to pay.  Playing within the rules to reduce liability is one thing, but actively changing the rules of the game to eliminate liability altogether — while middle-class Americans and small businesses pay full fair — is objectively unfair.

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