And Kies, even his most bitter foes admit, is probably going to win. Kies's likely success is all the more remarkable because he is defending a practice that, not long ago, would have been thought indefensible. Tax-sheltering is far more disreputable than the normal game of finding advantage through tax loopholes. Typically, an accounting firm such as Kies's will offer to sell a shelter to a corporation in return for a hefty chunk of the savings. The shelters cooked up by such firms are usually fantastically complex schemes that involve economically meaningless transactions designed solely to avoid taxes.
Companies devote brilliant minds and billions of dollars to sophisticated paper-shuffling.
Of course, a dollop of economic inefficiency might be acceptable if the beneficiaries were, say, minimum-wage workers. But tax-sheltering creates the worst of all economic worlds. Nobody knows precisely how much corporate tax-sheltering goes on. But evidence suggests it has shot up in recent years. Corporations always report more income to their stockholders than to the IRS, but the gap between the two groups' information has widened.