It was the main story on 60 Minutes last night, and is becoming a frequent topic of discussion in political circles. Some of the old-line Republican legislators (including my Senator Lugar) are beginning to question some of the rule changes pushed through under Clinton that allow companies to simply establish a post office box in Switzerland or Ireland and CONTINUE to operate in the United States ... just paying zero tax! It is unfair both to the American taxpayer and to their competitors who are NOT doing this.

It is frankly a real relief to me to see this movement to try to close these loopholes. Their point is that we are slashing spending on social programs, trying to cut a couple hundred billion a year - while these businesses continue to operate in the United States, avoiding over $300 billion a year in taxes. It really IS a truly conservative approach, grounded in simple fairness, to look at the revenue side as well ... but Democrats cannot do it from a minority position in the House. The compromise being discussed between legislators of both sides is to reduce the corporate profits tax RATE while closing these loopholes that make it SO easy to avoid taxes at all.

Apparently, European rates are in the high teens to low 20%s on these taxes, so if we adjust our rates (which reach as high as 35%) but at the same time MAKE them pay something, we may well see an increase in revenue. It is impossible to be certain because so many companies are privately held (like most pharmaceutical firms) and these do not publicly disclose their P&Ls, but I have seen estimates that the EFFECTIVE corporate profits tax rate is somewhere between 4 and 10% If we got even the 14% that Ireland gets, but REALLY collected that ... then our fiscal house would be in much better order.

"A society of sheep must in time beget a government of wolves"--Bertrand de Jouvenel