To sum up, the best way to react to the fact that Apple shelters income abroad is to get rid of the corporate income tax, and at the same time, get rid of the special tax rates for dividends and capital gains. That would not only remove the incentive for these sorts of shenanigans, but also give other companies incentives to headquarter here. And as a bonus, it would collect more taxes from individuals, progressively, so that Warren Buffett doesn't pay the same tax rate as the widow with a few utility shares.
Bonus Material: Shorter Flashback Megan McArdle: You can't raise taxes on individuals; they would just find some way to avoid paying them.
Money quote, made while discussing the possible repeal of the Bush tax cuts:
Too, this basically assumes that there are no dynamic supply-side effects from the tax increase. And it assumes that the multiplier from a tax cut is the same as the lost GDP from a tax increase, which is not necessarily the case--where you start matters. In this case, we're starting in the middle of a recession, when people may find a tax increase more worrying, because they're already feeling more financially insecure. To be sure, that worry might push them to work harder, or to hunker down and do as little as possible. But there's no reason to think that it's somehow steady state through good times and bad.
So we should repeal the corporate tax and tax individuals instead, which would also be impossible because they would just avoid paying higher taxes.
Another Shorter McArdle: Drug companies should not have to pay for clinical trials. The government should pay for them. Money quote:
It's also possible that it's time for a broader rethink: why are the companies, rather than the FDA itself, conducting the clinical trials required to approve a drug? The answer seems to be that clinical trials are very expensive. But the clinical trials get paid for anyway, by all the taxpayers who take drugs at some point in their lives--which is to say, most taxpayers. The tradeoff hardly seems worth the obvious problems with effectively asking industry to conduct their own inspections.
Yes, since almost all of us take drugs at one time or another, we should pay the drug companies' expenses, since they pass on those expenses to their customers. Likewise, if you see Jamie Dimon getting out of a taxi you should pay his fare because almost all of us have money in banks and he'll just write off the business expense anyway.