Corporate Tax Inversion Subversion

Stakeholder's Siphoned

Stakeholder’s Siphoned

Tax Inversion is ultimately Subversive to Financial Stability and National Security. There is a very real tipping point where large portions of the population will become overburdened and uncomfortable with their situation. Powerlessness will lead to resentment; which will inevitably lead to instability and possible Revolution. Wealth inequality and political inequality is accelerating due to the dismantling of sound regulatory practices. The wealth elite, the 1% so to speak, are benefiting greatly through active manipulation of the political system. They have ensured that rules promote their agenda over the vast majority of US Citizens. Voter disenfranchisement is systemic in a society that promotes powerlessness to those without large assets. Utilizing an intentionally broken Campaign Finance system; the Elite have ensured wealth is proportionate to political power. While this power grab is ensuring their minority stranglehold; they are fleeing responsibility for the fiscal health of the United States.

The growing trend of Corporate Tax Inversion is very troubling for the US Citizenry & Stakeholders. As Sen. Elizabeth Warren & Sen. Bernie Sanders have been shouting; the game is rigged! A Corporation has a fiduciary responsibility to bring profit to its shareholders. As such, the incentive to minimize tax burdens are always present. This is not the issue. The issue is the lack of sound regulation in the US and the consequences of such actions. The macro political economy leads us to assume some very troubling trends in the United States.

Globalization and Deregulation have created an environment that has diluted the stakes and say of an average American Citizen. Conservative ideologies, led by quasi-libertarian thinking, are pervasive throughout the 3 Governmental Branches. In a time when the United States maintains record National Debt + year after year deficits, Conservative forces have demonized Revenue generation via taxation. This has led to priorities in Congress to lower taxes at all costs; mainly for those who have lobbied Congress for specific tax cuts. The wealth elite in this nation & their Corporations have lobbied to ensure that tax burdens are lowered. This has not been good enough for Corporations or the Globalized Elite. Now US Corporations are moving abroad in an attempt to avoid paying their fair share of the US Tax Burden.

Corporations have successfully destroyed Campaign Finance Regulations in favor of unregulated, non-transparent, unlimited funds to politicians. These politicians, corrupted by this wealth, are beholden to their corporate masters at this point. Citizen’s United is a prime example of how Conservative ideologies won the day; with blatant disregard for the overall outcomes of wealth inequality or political stability of the United States. Last on the list is the financial stability of our Federal and State Budgets. As Corporations and the Wealthy continue to deflect the tax burden; well paid Conservative Politicians are in the practice of claiming fiscal responsibility. They then bring out the hatchet to budgets on the most powerless constituents in the United States. Welfare and Social Safety Nets have been demonized and gutted to further ensure that inequality is propagated.

With these assumptions, it is implied that Conservatism & Libertarianism is ultimately damaging to a healthy democracy. It is destroying the foundations of Checks & Balances in the United States. It is ensuring that the rich get richer and the poor remain on the bottom; with little opportunity to ever ascend on the aggregate. The ideology of small government has allowed a culture that permits tax inversion as a legitimate practice. The end result is the decimation of government budgets and harm to the least of these of United States Society.

Definition of ‘Corporate Inversion’

Re-incorporating a company overseas in order to reduce the tax burden on income earned abroad. Corporate inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the country of incorporation. Companies undertaking this strategy are likely to select a country that has lower tax rates and less stringent corporate governance requirements.

Investopedia explains ‘Corporate Inversion’

Corporate inversion is one of the many strategies companies employ to reduce their tax burden. One way that a company can re-incorporate abroad is by having a foreign company buy its current operations. Assets are then owned by the foreign company, and the old incorporation is dissolved.For example, take a manufacturing company that incorporated itself in the United States in the 1950s. For years the majority of its revenue came from U.S. sales, but recently the percentage of sales coming from abroad has grown. Income from abroad is taxed in the United States, and U.S. tax credits do not cover all taxes that the company has to pay abroad. As the percentage of sales coming from foreign operations grows relative to domestic operations, the company will find itself paying more U.S. taxes because of where it incorporated. If it incorporates abroad, it can bypass having to pay higher U.S. taxes on income that is not generated in the United States. This is a corporate inversion.Corporate inversion is not considered tax evasion as long as it doesn’t involve misrepresenting information on a tax return or undertaking illegal activities to hide profits.



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