America's corporation-tax receipts falter even as company profits soar

THE pressure on tax-avoiders is mounting. In the latest episode Tim Cook, Apple’s boss, was called before a Senate subcommittee to explain why the tech giant had paid no tax on $74 billion of its profits over the past four years—though it has done nothing illegal. This comes at a time when America's corporate profits are at a record high, thanks to the swift sacking of workers at the start of the recession, lower interest expenses, and the fact that cheap labour in emerging markets has eroded union power, allowing firms to move production offshore and defy demands for pay rises. Meanwhile corporation tax, which makes up 10% of the taxman’s total haul (down from about a third in the 1950s) has plummeted. An increase in businesses structuring themselves as partnerships and "S" corporations, which subject profits to individual rather than corporate income tax, is in part to blame. But tax havens are also culprits, as they lower their tax levels to lure in bigger firms.