A company in the U.S. wants a tax loophole to apply.
Starbucks, for example, wanted to be able to use the manufacturing deduction by
stretching manufacturing to include
the roasting of coffee beans. So in 2004 the company hired Michael Evans, a
lobbyist at K&L Gates who had just a year before worked as a top lawyer on
the U.S. Senate Finance Committee, which writes tax law. Evans was able to urge
his former colleagues in the Senate to expand the definition of manufacturing
to include roasting in a clause added to a 243-page tax bill called the
American Jobs Creation Act. As you might
imagine, Starbucks was not the only company to get a tax break written into
that law. By 2013, the manufacturing deduction had saved Starbucks $88
million that the company would otherwise have had to pay in corporate income tax. In
2012, corporate tax breaks and loopholes added $150 billion in lost revenue for
the federal government, increasing the budget deficit by that amount.[1] Three lessons can be gleamed from the hidden corporate loopholes.
The full essay is at "Behind Corporate Loopholes."
The full essay is at "Behind Corporate Loopholes."
1 Ben Hallman and Chris Kirkham, “As
Obama Confronts Corporate Tax Reform, Past Lessons Suggest Lobbyists Will Fight
For Loopholes,” The Huffington Post,
February 15, 2013.
