The U.S. Tax Code: How Big Companies Dodge Taxes

Last updated on February 26, 2022

More taxes for an average taxpayer is fair if taxes are being paid by businesses and the wealthy alike, but many times those who can afford fancy accounting tricks can often dodge their full tax liability. Call it ‘loopholes’ in the tax code that helps big businesses avoid their tax duty without repercussions, the reality is that many corporations are reducing their tax bills substantially.

Many large companies in Silicon Valley, such as Google, Apple, Cisco, eBay, and Hewlett-Packard avoid paying billions in federal taxes every year. Using tax havens to hide income overseas is one of the top methods large companies use to evade taxes. Even when average taxpayers are paying more in taxes to help the country out of its fiscal deficit, large companies are reducing their annual taxes by the billions.

It is no secret that the U.S. tax code favors large companies. Tax avoidance by large companies is rampant and contributes to the tax gap. While President Barack Obama and Congress are considering limiting government spending, they are overlooking tax avoidance by some of the most prominent companies in the country.

Even if the tax code allows companies to exploit tax laws, strict law enforcement can help in curbing tax avoidance and tax evasion. Apart from increasing taxes on taxpayers, tax compliance among businesses, especially large and powerful ones, must also be increased.