Tags: Caroline Baum | flat tax | loophole | policy

MarketWatch's Baum: Flat Tax Should Be Implemented, but Probably Won't

By    |   Thursday, 25 June 2015 09:00 AM

The flat tax has risen to the forefront of policy discussions, with four Republican presidential candidates voicing support for the idea, most notably Kentucky Sen. Rand Paul.

The candidates are right on, says MarketWatch columnist Caroline Baum. "The flat tax has an intuitive appeal — and not just for Republicans, for whom cutting taxes is orthodoxy," she writes.

"Democrats should appreciate the idea of a flat tax as a way to level the playing field: The wealthy benefit the most from the tax code’s myriad of loopholes. . . . The only entities with a reason to oppose a flat tax would be large corporations and their huge staffs of accountants."

But if a flat tax was really politically possible, it would have been approved by now, Baum says. "Moneyed interests are just too strong to sacrifice their exemptions, even though in many cases they would pay a lower effective rate under a flat-tax system."

Elsewhere on the tax front, Fortune magazine has dropped Medtronic and Mylan from its prestigious Fortune 500 list for domiciling overseas to avoid taxes, and Washington Post Allan Sloan approves — of the magazine's move that is.

"To its credit, Fortune kicked Medtronic and Mylan off for deserting our country," he writes.

Fortune's list editor Scott DeCarlo told Sloan, "The Fortune 500 is going to remain a list of companies based in the U.S. We want to maintain the integrity of the list."

But while the corporate tax inversions like Medtronic and Mylan's have abated, "corporate desertions continue, sometimes in mutated forms," Sloan writes.

"For example, two of the three companies whose desertions had been upended by the Treasury’s new regulations were acquired by previous deserters: Salix Pharmaceuticals by Valeant Pharmaceuticals, and Auxilium Pharmaceuticals by Endo International."

So what's the upshot of all this? "Absent a miracle in Washington, the bleeding of corporate tax revenues out of our country will continue," Sloan explains.

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The flat tax has risen to the forefront of policy discussions, with four Republican presidential candidates voicing support for the idea, most notably Kentucky Sen. Rand Paul. The candidates are right on, says MarketWatch columnist Caroline Baum.
Caroline Baum, flat tax, loophole, policy
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2015-00-25
Thursday, 25 June 2015 09:00 AM
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