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Friday, March 29, 2024

Letters to the Editor: Aug. 29 column misses underlying issues of tax inversions

Dear Editor,

This letter is in response to Joel Mendelson’s opinion piece on Aug. 29 about corporate tax inversions. Forcing corporations to return to the U.S. in order to more fully share the burden of U.S. taxes completely misses the underlying issues.

Despite the U.S. having the second highest corporate tax rates in the world, corporations pay no taxes regardless. They simply act as government tax collectors, passing those costs onto consumers.

The corporations’ use of loopholes that enable them to lower their tax burden actually helps to lower the cost of their products and services and remain competitive in a global market, benefitting consumers.

Joel’s comparison of a corporation’s ability to exploit this loophole to that of an individual is somewhat disingenuous, as an individual simply has different loopholes to exploit, such as the home mortgage interest deduction, itemized business and work deductions and child care expenses.

The real issue lies in an overly burdensome tax code that allows business and government to manipulate each other.

The answer for a consumption-based society like the U.S. is a consumption-based tax like the FairTax. The FairTax is a retail sales tax on all goods and services with no exemptions or loopholes. The government’s purchases would be taxed along with those of individuals. There would be little change in the cost of goods, as embedded taxes would be removed. The FairTax would make all taxes essentially voluntary and allow people to keep 100 percent of their paychecks.

Bill Erickson

Alachua County resident

[A version of this story ran on page 7 on 9/5/2014 under the headline "Aug. 29 column misses underlying issues of tax inversions"]

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