On 'Giving Back'
30 August 2007
Editor, Baltimore Sun
To the Editor:
Appalled that some corporations doing business in Maryland sometimes legally avoid paying state income taxes, state senators Lisa Gladden and Paul Pinsky assert that these companies "give nothing back to the state" ("Make corporations pay fair share," August 30).
I have no idea if Maryland's tax code should be revamped, but I do know that avoiding taxes is not equivalent to "giving nothing back." Even corporations that pay no taxes make valuable goods and services available to Marylanders. This commercial activity is a genuine contribution to the public welfare. If you're doubtful, ask whether Marylanders would be better off if each corporation in that state would pay lots of taxes but also shut down all operations there, OR if each corporation were to pay no taxes but also were to continue to hire workers, produce outputs, and sell these outputs to Marylanders. If you even suspect that the latter option is the one that is best for the public, then you must reject the notion that businesses contribute to society only what the state extracts from them in taxes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, Baltimore Sun
To the Editor:
Appalled that some corporations doing business in Maryland sometimes legally avoid paying state income taxes, state senators Lisa Gladden and Paul Pinsky assert that these companies "give nothing back to the state" ("Make corporations pay fair share," August 30).
I have no idea if Maryland's tax code should be revamped, but I do know that avoiding taxes is not equivalent to "giving nothing back." Even corporations that pay no taxes make valuable goods and services available to Marylanders. This commercial activity is a genuine contribution to the public welfare. If you're doubtful, ask whether Marylanders would be better off if each corporation in that state would pay lots of taxes but also shut down all operations there, OR if each corporation were to pay no taxes but also were to continue to hire workers, produce outputs, and sell these outputs to Marylanders. If you even suspect that the latter option is the one that is best for the public, then you must reject the notion that businesses contribute to society only what the state extracts from them in taxes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Wednesday February 27, 2008 at 11:48am