The dark art of tax dodging

Allan Sloan

Fortune

It’s not just companies “associated with financial wheeling and dealing” that dodge taxes, said Allan Sloan. Procter & Gamble, owner of Tide detergent and Bounty paper towels, is behind some of the “most clever and innovative tax avoiding” around. P&G has paid no taxes on several major deals over the past decade by using a complex financial loophole similar to one Congress blocked in 1997.

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P&G’s transactions are “perfectly legal,” but they’re “so convoluted that you have to be a tax techie (or a masochist) to make your way through them.” By my estimates, the Cincinnati-based consumer giant has made $6 billion by unloading its Jif, Crisco, Folgers, and Pringles brands, all tax-free. Straight sales “would have triggered a $2 billion federal tax bill and a hefty state tax bill.”

It shows how desperately we need corporate tax reform when “even a company like P&G practices the dark tax-avoiding arts.” Lower tax rates alone won’t solve the problem. “Corporate tax avoidance is as American as apple pie,” and companies will pursue it until “all available loopholes get nailed shut.”