Free Ride! Meet the Companies That Don't Even Pretend to Pay Taxes
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Who is in favor of this gross unfairness? Democrats and Republicans alike have failed to make taking it on a priority. Unsurprisingly, a GOP-backed coalition of building contractors, beer distributors, car dealers and funeral directors has been the most vehement in arguing that changing the rules will block “entrepreneurship.”
Does Blackstone, the world's fifth-largest private equity firm, really need our assistance?
The pass-through structure, in addition to being unfair, encourages fraud that the Internal Revenue Service has a hard time spotting. S corporations, partnerships and other pass-throughs game the system by underreporting income and overstating deductions. Billions in uncollected taxes each year are the result of this scamming.
In an era of laid-off school teachers, uninsured children, widespread joblessness, and crumbling roads and bridges, this is nothing short of obscene. As economist William Lazonick, director of the U Mass Center for Industrial Competitiveness, put it to me in an email:
"Ordinary taxpayers should be outraged by the obsession of business executives with tax avoidance. Our tax dollars have played a major role in funding the physical infrastructures and human capital that support business enterprise. Then they pull out every trick in the book to deprive us of our fair share of business profits. Besides reflecting a profound moral deficit on the part of our business 'leaders,' it is a recipe for U.S. economic decline that calls for massive tax reform."
Obviously, reform to get rid of these loopholes is wildly overdue. Once we decide as a nation what our government needs to spend in order to have a decent and prosperous society and what share of total tax revenues different types of economic actors should pay, there should be no more excuses. And businesses that refuse to pay their share should be called by their proper name: parasites.
Lynn Parramore is an AlterNet contributing editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.' Follow her on Twitter @LynnParramore.