Feedback
Business

Corporate Tax Dodging Costs U.S. Billions of Dollars Every Year

Rich and Powerful Named in Panama Papers 8:19
In the current race for the White House, the willingness of companies to pay their "fair share" in taxes has become the stuff of charged political fodder. In particular, Democratic presidential contender and Vermont Senator Bernie Sanders has launched broadsides against big corporations, and faulted them for taking advantage of workers. The latter charge drew a stern rebuke this week from Verizon CEO Lowell McAdam.

However, a growing number of observers say the key to ending the problem of tax havens and corporate inversions is to lower U.S. corporate tax rates. As it stands, the U.S. has one of the highest rates in the entire world, while countries like the U.K. enjoy comparatively lower rates. Britain's rate stands at 20 percent, a rate that will fall to 18 percent in 2020.

Therein lies what some observers say is the key to curbing corporate tax sheltering: Cutting the tax rate to encourage repatriation and foster growth. In a recent CNBC interview, former Treasury Secretary Hank Paulson argued that an "antiquated, outdated tax system" encouraged tax cheating and was a barrier to economic growth.