Edward D. Kleinbard, a professor at the University of Southern California’s Gould School of Law, insists that the U.S. tax code has been wrongfully accused of burdening corporations and stifling their capacity to compete with international counterparts. In a paper entitled “Competitiveness Has Nothing to Do with it,” Kleinbard argues that U.S. corporations aren’t consistently paying taxes at the corporate tax rate of 35%. Rather, on average, they are paying 12.6% as a result of stockpiling cash overseas. Increasingly strategic tax planning, he claims, enables corporations to avoid what looks like an excessively high rate in comparison to many other tax rates abroad. See Andrew Ross Sorkin, “Tax Burden in U.S. Not as Heavy as it Looks, Report Says,” NYTimes.com (Aug. 18, 2014).
Posted by Caroline Lisankie, Associate Editor, Wealth Strategies Journal