Tax Shelters, Free Riders, and Treason?

The readings from the manuscript leave me contemplating the American preoccupation with finding a good “tax shelter” in a new light. It also invites me to look at companies like Halliburton and KBR, as well as Tyco - and many others using off-shoring - from a critical perspective in which we must consider their actions in relation to the purpose of our country's tax laws. Why do we pay taxes?

Some of the basic examples of the purpose of taxes include the security and defense of the nation, the enforcement of law and public order, protection of property, economic infrastructure, public works, and the operation of government itself. Taxes are also used toward funding of public services which include education, health care systems, social security benefits, unemployment benefits, and public transportation. Other public infrastructure needs funded by taxes include energy, water and waste management systems.

It is an easy argument to claim that the elimination of just a few of these basic government functions would leave the people of the U.S., and all those firms for which the U.S. is home, in a situation of vulnerability.

While the cases presented in the manuscript, and those we discuss in the class, are the more extreme examples of egregious profit mongering, I think it would be fair to look at even less egregious “tax sheltering” behavior - those in which corporation’s (and their agents) behavior are for the purpose of sheltering profits to enhance their bottom line – as examples of free-rider practices in which these firms gain all the benefits of a stable liberal economy, while clearly acting directly to avoid paying their fair share. One may even go so far as saying that these behaviors – in that they damage the ability of the U.S. government over the long-term to provide and create the very conditions that the nation requires to remain safe both in terms of its economy and its national security – are acts of treason.

The “agents” of these companies include all those (individuals, groups, and corporations) who willingly aid in a corporation’s purpose to avoid paying their fair share. These entities take advantage of their unequal access to decision-makers to bias the laws - of the very national economy which allowed their prosperity – in a manor that not only inflicts damage on their nation, but cheats the nation and its people from payment for the privilege of these benefits.