Why is it not a felony to avoid taxes by offshoring jobs and US business activities?

If The corporation makes profit from its business activities in the US, why should they not pay the taxes in the US as anyone who gets a paycheck working in the US?

Very simple. There is no legal obligation to be socially or morally correct. One only need follow the law. Tax avoidance isn't against the law. You asked why it isn't a felony and then follow through with an ambiguous argument about social or moral "responsibility". Which is it? You sound just like a politician!

If you don't like the status quo, contact your elected representatives and push for changes in the law. You asked a Q and then kept changing it as answers came that you didn't like. Typical scape-goater. TFTP Report It

Why would it be?





That's what I thought.

Uh, maybe because there's no law against it, it's a perfectly legal thing to do?

You don't avoid taxes, you simply move them. If you move a business to another country, you become a business of that country. You are no longer an American business, you don't draw on American resources to do your business. Instead you pay taxes to the new country. The tax level is usually significantly lower (and that's why it's done) but in no way is it illegal, nor should it be.

Corporations, like individuals, pay taxes on their worldwide income. So if XYZ Corp has a net loss on its US business of $1M and net income in the EU of $2M, then XYZ will have a taxable income of $1M before credits etc.
There is a fine line between "tax avoidance" which is legal and "tax evasion" which is not.