Monthly Archives: December 2014

Corporate Tax Avoidance and Inversions

After a discussion about corporate tax avoidance, I made an interesting discovery that equating corporate inversions with moving profits overseas to avoid tax burdens is a common misconception.  In case anyone was wondering, that’s clearly untrue. Inversions are a uniquely American phenomenon since the US is the only developed country to force its home-based corporations to pay not only taxes in a foreign country, but also American taxes on profits earned abroad.  This is one of the more bizarre elements of the tax code and also results in Americans living overseas being forced to renounce their citizenship to avoid back taxes. Moreover, the State Department has tried to make it far more difficult to renounce your citizenship in order to keep people paying taxes.  Yes really. Continue reading