Issue: Taxation: Federal- Avoidance of Payment
Taxation at the federal level is presumably for the purpose of covering the cost of those national expenses that we have collectively decided are either required by our Constitution as currently interpreted, or otherwise necessary and worthwhile and within our body of current law. Responsibility for deciding what funds should be collected and expended, and for what, rests with the U.S. Congress and the President. The decisions made on federal income and expenses can be based on interpretation, custom, politics, and law, and may or may not be based on reality and fairness. One of the sources of great frustration to many is the complexity of the U.S. Tax Code, and the manner in which potential payees of taxes can avoid payment through the use of tax loopholes, credits, exemptions, shelters, etc. This of course results in a decrease of income to pay for federal government expenses. It is the purpose of this Issue area to identify specific methods used by individuals and organizations to reduce or avoid payment of taxes, with recommendations as to how to change or eliminate them.
The amount of funds "parked" by major corporations overseas is very large and continues to grow. These funds are not available to support the economy within the United States, and are not available for increasing employment within the United States. A process needs to be established whereby the companies keeping these funds overseas can be encouraged to bring them back, and a program needs to be put in place so that this parking of funds overseas is less financially rewarding. One immediate approach which has been suggested is to establish a 90 day "holiday," during which time the tax on return funds would be reduced. This could be to tax the funds at approximately 12%; it also might include the option of allowing for a slightly lower tax rate for any portion of the returned funds that are placed for a period of time in an infrastructure bank.