Regarding your editorial “Jack Lew, Investment Killer” (Oct. 17): Even before the Treasury Department’s decision to prevent the use of “hopscotch” loans to evade taxation of repatriated earnings, U.S. multinationals had stockpiled nearly $2 trillion in foreign cash. Therefore, leaving the system unchanged would hardly guarantee the return of overseas earnings. On the contrary, retaining rules that facilitate inversions would accelerate tax avoidance and the erosion of the U.S. tax base by firms that continue to free ride on the enormously expensive global trade infrastructure built and protected by our country.
No other nation contributes more to the stability and functioning of world markets than the U.S. Calls to adopt a territorial tax system—mostly used by the rest of the world—are blind to the fact that the “rest of the world” doesn’t bear the burdens of a superpower. The notion that the duty to fund our nation should end at the water’s edge is profoundly at odds with the status of a country that seeks to project power and influence around the world.
The U.S. currently gives a tax credit for income taxes paid to foreign governments. What could be fairer?
David R. Martin