A taxing battle
Nobody wants to pay taxes. No wonder, then, that so many companies spend so much effort trying to avoid them. Almost every big corporate scandal of recent years, from Enron to Parmalat, has involved tax-d odging in one form or another.
In the latest revelation on January 26th, Dick Thornburgh, the man appointed to look at the collapse of World-Com, released a report claiming that, as well as the slew of other crooked dealings of which the bankrupted telecoms company is guilty, it also bilked the Internal Revenue Service (IRS) of hundreds of millions of dollar s in taxes through a tax shelter cooked up by KPMG, its auditor.
Tax authorities around the wo rld rightly fret that such cases are the tip of a large iceberg, and they are starting to act. In America, home to many of the best-known corporate-tax scams of recent years, the Bush administration has announced a series of anti- tax-do dging measures in its new budget, which will be presented to Congress on February 2nd, including an extra $300 million to boost enforcement and the shutting of corporate-tax dodges that could bring in, it reckons, up to $45 billion over the next ten years.
The Economist, January 31st - February 6th , 2004, p. 71 (with adaptations).
