I was doing a bit of research today and I found a few companies who exploit tax loopholes very effectively. Some of the big offenders are...
- Ikea - Owners registered as a charity and pay only 3.5% tax
- McDonalds - Based in Switzerland to avoid tax, but operate worldwide.
- Google - Avoids paying £100m in taxes for the UK by basing themselves abroad, where corporation tax is less.
- Walmart - Pays itself rent to exploit tax loopholes saving hundreds of millions of dollars.
...These are just a few, the list is endless.
Now two things strike me here. One is that the government could be much better funded if the tax loopholes were closed, because the corporations would have to pay more tax. The other is that closing loopholes could potentially be a regressive movement and it couls cause more businesses to move abroad to tax havens like in the case of McDonalds or Google.
What do you think the best solution would be?