William K. Black
February 16, 2016 Bloomington, MN
I have been planning to respond to a January 26, 2016 article in the Wall Street Journal entitled “Washington’s Corporate Purge” that begins with the claim that “Bernie and Hillary compete to drive more U.S. companies overseas.” My title was going to be: “WSJ Shills for Tax Cheats and Cheers Race to the Bottom.” The context was a typical WSJ claim that it was “moral” to do a tax inversion deal with Ireland to cut a U.S. company’s corporate tax rate dramatically. Murdoch’s minions’ explanation of this “moral” concept is as follows: “A CEO obliged to act in the best interests of shareholders cannot ignore this competitive reality.” The idea that CEOs “act in the best interests of shareholders” as opposed to the best interests of the CEO is contrary to economic logic and reality, but let’s focus on the claim that as soon as any competitor engages in the race to the bottom on taxes all U.S. CEOs have a “moral” duty to race to the bottom by avoiding paying U.S. taxes. If that is true, then it is essential to either impose a new form of taxation that corporations cannot evade through such inversion scams ( a point that Donald Trump, of all people, made in the most recent debate) or for governments to cooperate to prohibit such a race to the bottom.