Sean King

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Knoxville, Tennessee, United States

Saturday, January 1, 2011

Another Reason the Super Rich Favor Higher Tax Rates

They don't pay them while the merely "rich" do:

What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.”

Merck & Co Inc., the second-largest drugmaker in the U.S., last year brought more than $9 billion from abroad without paying any U.S. tax to help finance its acquisition of Schering-Plough Corp., securities filings show. Merck is also appealing a federal judge’s 2009 finding that Schering-Plough owed taxes on $690 million it had earlier brought home from overseas tax-free.

The largest drugmaker, Pfizer Inc., imported more than $30 billion from offshore in connection with its acquisition of Wyeth last year, while taking steps to minimize the tax hit on its publicly reported profit.
“Some of the best minds in the country are spent all day, every day, wheedling nickels and dimes out of the tax system,” said H. David Rosenbloom, an attorney at Caplin & Drysdale in Washington, D.C., and director of the international tax program at New York University’s school of law.

Access to such minds comes at great cost, a cost that many innovative small businesses simply can't afford to pay. Unable to compete against established companies that pay comparatively little in taxes on their profits, innovators are often eventually forced to sell their ideas and technology to the "big boys." And, that's just how the big boys like it.

I've said it before, and I'll say it again: High tax rates and increased regulation benefit the wealthy establishment. Why do you think so many billionaires are leftists?

1 comment:

Florida Tax Professionals said...

Why is it that the rich always have exceptions to avoid tax, and the common people will bear the burden of various taxes.