Many large corporations have an objective to pay less in taxes and are using corporate tax loopholes to avoid paying taxes. Walmart and Apple are such companies. Apple CEO Tim Cook was quoted in the press as defending Apple’s tax-avoiding practices, which saved $44 billion in offshore income from 2009 to 2012. Apple also has three Irish subsidiaries that claim to have no residence anywhere for tax purposes.

It is not known just how many corporations are engaging in these kinds of activities. What is known, though, is that as these corporations continue taking advantage of corporate tax loopholes, the more taxes ordinary families and small businesses pay.

The U.S. federal corporate tax rate is the highest in the world, as high as 35 percent in early 2017, and most states and some local governments also impose taxes on corporate profits. President Trump said he wants tax cuts, which would give less incentive to move jobs overseas and keep money in America. However, others claim that large profitable corporations should pay high taxes to help fund social programs, and the tax rate should not be cut.

1. Although it is legal, is it ethical for Apple, Walmart, and other corporations to take advantage of tax loopholes to avoid paying taxes?

2. If you became CEO of one of these corporations, would you continue to take advantage of the tax loopholes? Why or why not?

3. As an individual, do you or will you take advantage of tax loopholes, or pay more taxes than legally required by law?

4. What is the government’s role and responsibility regarding tax loopholes? What should the government do?

5. Should the corporate tax rate be cut? If so, by how much?