Role of Earnings Stripping as an Elaborate Tool to Avoid Corporate Income Taxes…. Should Congress Impose an Exit Tax to thwart the Tax Avoidance Scheme…

Abstract

Corporate America has used elaborate tools to constantly find creative ways to avoid corporate income tax throughout the past few years. The primary motivating factor has been the view that the United States Corporate Tax Rates are too high. In essence the excessive corporate taxes force the hand of management to find solutions to reduce their onerous tax burden. A newly minted strategy has taken the form of inversions…a creative way to create a foreign entity purely to avoid the US tax assessment. Is it time for Congress to resolve the issue: Is the Internal revenue Code unfair to Corporate America?