Corporate Responsibility
Corporate responsibility has become one of the most contentious topics in the modern American economy. The subject has sparked a level-headed debate around the board, attracting market economists, businessmen, and even people. This problem was brought to light recently when the EU commission requested that Apple Inc. incur unpaid sums of cooperate obligation as a result of the corporation's attempts to avoid tax assessment over the years (Brownlee, 2016).
Proposed Solutions
Based on this, the issue of what drives such companies to such lengths has always persisted. The solution may be found in the latest tax rules and requirements in the United States. Currently the U.S. recommends a taxation of 35 percent on overseas establishments only when such profits are taken back to the U.S. (Bhattarai, Haughton & Tuerck, 2016).
Obama's Proposal
Right before his departure from the office, former U.S. president had initiated a reform to the tax law that gives the privilege of tax exemption to corporate organizations in their overseas profits. If this succeeds, the U.S. will be able to hold into account corporations that are taking advantage of this tax haven to evade paying their taxes.
Another valid proposal declares that taxes on these corporations be shifted to shareholders and stakeholders rather than the corporations themselves. In this way, it will be possible to level taxes on their profits without regard of where they have based their plants. Proponents of this strategy have continually claimed that it is an objective way of ensuring tax is paid regardless of where corporation choose to base their plants.
Best Proposal
Obama’s proposal seems to be the most viable and practical plan based on its principles. This is because, apart from ensuring the corporate organizations pay their taxes, the tax law will come with reforms that reduce the corporate duty in the U.S. from 35% to 28% (Bhattarai, Haughton & Tuerck, 2016). In essence, this will improve the competitiveness of the U.S. market which currently rates poorly among its peers.
Responsibility of Each Level of Government
The federal government often oversees the reviewing, passing and implementation of tax legislations that attract the interest of all the states (Brownlee, 2016). For instance, the corporate duty law falls squarely in the docket of the federal government since the individual state governments have no jurisdiction in such matters. Simply speaking, the federal government represents the country in the formulation of international tax laws and other areas of interest such as security.
The state governments are often charged with the responsibility of implementing tax laws originating from the federal government. Also, the state governments have the authority to come up with tax laws and other legislations depending on the state needs and dynamics. This is allowed provided it does not contradict federal laws.
The local governments are mostly responsible for tax collection as well as introducing levies that cover their jurisdictions (Brownlee, 2016). For instance, city authorities may introduce various parking levies to supplement their budges to ensure smooth running of operations. However, the local governments ought to conform to state and federal laws.
Conclusion
The corporate duty highlights one of the current contentious financial issues facing the U.S. economy. While the issue has aroused much debate, the administration has moved to make reforms to ensure the issue is settled. This issue has also highlighted the responsibilities of the various levels of the government in the U.S. which ought to act in synchrony to ensure smooth implementation of tax laws among other regulations.
References
Bhattarai, K., Haughton, J., & Tuerck, D.G. (2016). The economic effects of the fair tax: analysis of results of a dynamic CGE model of the US economy. International Economics and Economic Policy, 13(3), 451-466.
Brownlee, W.E. (2016). Federal Taxation in America. Cambridge: Cambridge University Press.
