Monday, July 2, 2018

Randy Boyd did not overpay his taxes!

Randy Boyd
by Rod Williams - The Tennessean has a front page story today with the  headline, Boyd business avoids millions. According to the story he used the same strategies as Apple, Facebook, and Microsoft to legally avoid paying taxes beyond what he is required to pay. The strategy involved something called a "double Irish" and involved two Irish subsidiaries. If interested in the details of how he structured his company to avoid overpaying taxes, read the article.

The story does not allege he did anything illegal. By using these tax avoidance strategies he saved his company millions of dollars. Still, the company paid $8.6 million in taxes during this period.  It should be noted that at the time, America's corporate tax rate of 35% and Ireland's tax rate was one of the lowest in the world.  Tax reform will make some of this creative structuring unnecessary and increase the amount of taxes American companies pay and reduce the accounting cost and the cost of engaging in creative company structuring.

I assume the Tennessean thinks this expose' of Boyd engaging in legal practices to reduce his tax liability will make people think less of  him.  For me, it make me regard him more highly. It shows he is smart and wise and has valuable real life experiences.  If he can do that with his own company, he understands complexity and the importance of a positive business environment.  If a company has to twist itself into a pretzel with subsidiaries and foreign offices and has to hire an army of lawyers and accountants to avoid overpaying taxes, then I am critical of  the tax system, not the person saving money on his tax bill.  If the Cayman Islands, Malta, and Ireland are tax havens, maybe instead of blaming companies who filter their profits though these countries as somehow immoral, the United States should become a tax haven.

If as an individual you have a mortgage payment, student loans, and medical expenses, you can probably save money by itemizing rather than taking the standard deduction. You also might discover you can claim a deduction for driving an environmentally friendly car or some other deduction. I am not going to think less of you because you itemized.  In my view it is stupid to overpay on your taxes. One person's tax loophole is another person's legal tax deduction.

Congratulations Randy Boyd on not overpaying your taxes and instead stimulating the economy.

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