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Corporate Tax Rates, Profit Shifting, and Enforcement Challenges
This chapter explores the impact of high statutory tax rates on incentivizing tax gaming and profit shifting, with examples like Apple's strategic profit declarations. It examines the consequences of lowering tax rates on distortions and true tax payments, highlighting the difficulty in combatting profit shifting and offshore income. Additionally, the discussion delves into the complexities of tax policies, the limitations of tax reforms like the Tax Cuts and Jobs Act, and the disparities in tax audits and enforcement that disproportionately affect lower-income individuals.