WILFORD: ELIZABETH WARREN’S LATEST BAD IDEA — A MASSIVE CORPORATE TAX HIKE

The Daily Caller | 4/18/2019 | Staff
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Massachusetts Sen. Elizabeth Warren really hates when companies don’t pay taxes. And she’s willing to take a crowbar to the U.S. economy’s knees to stop it.

Reports earlier this year that Amazon paid no federal income tax fueled a wave of progressive anger at how corporations “game the system” and avoid paying taxes. Capitalizing on that momentum, Warren recently proposed a massive corporate tax hike intended to prevent large corporations from getting off scot-free when the taxman comes calling.

Warren - Proposal - Corporations - Profits - Investors

Warren’s proposal is fairly simple. She argues that corporations report high profits to investors to boost stock value while reporting low profits to the IRS to lower tax liability — so, a new tax on the profits reported to investors would capture more money.

But here’s the thing: there’s a reason the profits reported to investors and the profits reported to the IRS don’t match up. They use different accounting systems — one overseen by the SEC and the other by the IRS — that serve different purposes. While SEC accounting rules exist purely for the purpose of representing a corporation’s fiscal health to shareholders, IRS rules serve broader, national goals.

Carve-outs - Tax - Code - Deductions - Reason

While it is true that unnecessary carve-outs exist in the tax code, many deductions are there for good reason and enjoy bipartisan support. Most companies that have low tax liabilities aren’t using obscure technicalities; they’re using legitimate tax provisions that apply broadly.

Amazon paid no federal taxes last year by taking advantage of bipartisan deductions that serve good policy goals — such as by investing large amounts in research and development and capital improvements. One of the most important changes made in the Tax Cuts and Jobs Act allowed businesses to deduct the value of...
(Excerpt) Read more at: The Daily Caller
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