High Taxes, Abusive Enforcement Causing Businesses, Citizens to Flee America
The U.S. tax system is so burdensome and arbitrary that a 2013 study undertaken by a European think tank ranked it 94th of 100, right after Zimbabwe, for its impact on business competitiveness.
No wonder the U.S. economy is growing at half the pace as during the Reagan-Clinton years and creating about one-sixth the jobs.
Recent alleged IRS abuses of American businesses, taxpayers and nonprofits for political views and contributions -- and Justice Department reluctance to prosecute malefactors -- only add to perceptions that the U.S. tax system makes America no place to do business.
Increasing numbers of businesses and individuals are making that choice. American corporations are merging with foreign competitors for the explicit purpose of locating corporate headquarters and tax residences outside the U.S. These so-called "tax inversions" started as a trickle in the 1990s but are increasing.Activist investors are pressuring U.S. corporate executives to maximize stockholders' after tax profits -- and to shield stockholders from IRS and Justice Department enforcement abuses. Similarly, private citizens living abroad are unable to obtain bank services and are faced with huge tax and compliance costs and the risk that even a hangnail error or whispered politically incorrect view could put them in the crosshairs of the IRS. The result is that they are disavowing their U.S. citizenship. For private citizens, the costs of leaving America for good are quite high. Those include higher estate taxes for heirs who remain U.S. citizens and arbitrarily higher taxes on the sale of property and securities. Democrats and Republicans alike say they want tax reform, but Obama is unwilling to reduce the overall tax burdens. He wants only to move around and reduce certain deductions but maintain or increase revenue. More and more businesses and citizens will still want to leave America. And Congress appears not to have the courage to take on America's KGB -- the IRS. Cramer: Gannett Is About to Create Huge Value This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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