America is known as the land of opportunity. Capitalism is the critical foundation of this wonderful country. Businesses, small and large, do well in such a developed economy. The objective of these firms is to minimize expenditures and maximize revenue streams. A significant amount of expenses come in the form of federal taxes. To some large companies, these taxes are “optional.”

A tax haven is a country that offers companies or individual’s small amounts, if not, zero tax liability. This allows for a legal loophole to circumvent domestic taxes. This is an ethical issue that many fortune 500 companies face. Is it ethical to move funds into more tax-friendly locations to assist in achieving maximal profits?

Many companies are doing this and it’s perfectly legal! But just because it’s legal, does it mean that it’s also ethical? Nike is one of the biggest offenders of this. Nike shelters significant amounts of money ($10.7 billion to be exact) in offshore accounts in Bermuda. Nike pays 1.4% ($149.8 million) to foreign governments instead of a $3.7 billion tax bill to the US. This is a big chunk of change that Nike is pocketing.

There was The 2017 Tax Cut and Jobs Act that required a one-time repatriation on companies with foreign subsidiaries. This was enacted to obtain more tax-revenue from companies that have avoided past domestic income taxes. Trump even decreased the effective corporate tax rate from 35% to 21% in hopes that more off-shored money will come back into the US economy. Critics say that this one time tax to corporations still doesn’t solve the issue of tax-avoidance, it is just seen as an apology from companies that partake in these actions.

Is it unethical of Nike to continue using tax havens?
https://www.investopedia.com/terms/t/taxhaven.asp
https://www.taxpolicycenter.org/briefing-book/what-tcja-repatriation-tax-and-how-does-it-work
https://www.stock-analysis-on.net/NYSE/Company/Nike-Inc/Analysis/Income-Taxes#Accounting-Policy
https://corporatefinanceinstitute.com/resources/knowledge/other/what-is-tax-haven/
https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968





