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Panelists debate corporate taxation

Alexander Cao | Thursday, September 19, 2013

 

Three Notre Dame professors debated the limits of corporations’ responsibility to pay taxes Wednesday night in the Jordan Auditorium of the Mendoza College of Business in a panel discussion titled, “Greed and Taxes in Business,” the third part of the Berges Lecture Series on Ethics.

Professor Joseph Holt, Professor Brian Levey, and Professor Kenneth Milani, all faculty of the Mendoza College of Business, examined the issue from different perspectives. 

Levey, a business law professor, spoke first from a largely legal perspective and argued that corporations should pay as little taxes as they can.

“It is the duty of a director of a corporation to promote value of the corporation and, to do so, pay as low taxes required,” Levey said. “If I were still in practice, I would still not advise my client to pay more in taxes than they are legally required.” 

Deficits are the fault of the government, Levey said, citing that the 2011 tax code was 72,530 pages and that America’s inordinately high tax rate is 35 percent compared to the world average of 14 percent.

Milani called upon his experience as an accountant to describe the tax situation for businesses. 

“Taxes are [the] third or fourth largest expenditure of business after wages, salaries, materials and advertising,” Milani said. “But here’s the rest of the story … they are telling you half-truths … It is true that the corporate tax rate is 35 percent but no country hands out credits like we do … The key is effective tax rate, which is 12 percent.

“And it makes my blood boil when [people representing corporations] go on talk radio and throw that number a lot.”

Holt addressed corporations’ taxes from a moral standpoint. 

“Look to the principle maximum … Society runs off of business and business runs off of society and business cannot succeed where society is failing,” he said. “… There is a difference from not being in trouble and being exemplary.”

The next lecture in the series will take place Sept. 30. The topic of the next lecture will be “Long Term Principles in a Short Term World,” given by John Donovan, senior executive vice president of AT&T Technology and Network Operations.