I found this nugget in the Small Business Economy Report (on page 201 of the PDF). It’s kind of jargony, but it’s basically saying that as some companies become more sophisticated about picking and choosing to pay taxes in favorable jurisdictions, more of the tax burden will fall on local businesses that don’t have the luxury of, say, incorporating in Delaware (or the Cayman Islands):
The Expanding Technology of Tax Planning
The increasing mobility of tax bases, both domestically across state lines and internationally into other countries, will contribute to the ongoing proliferation of methods for reducing individual and business taxes. Confronted by this increasing mobility, federal, state, and local governments will have to face the tradeoff between competing for mobile bases by lowering tax rates on one hand, and raising enough revenue to fund public service obligations on the other. Local, less mobile tax bases will be asked to bear a larger share of the total tax burden unless major changes are made in how multi-jurisdictional activities are taxed. This has especially important ramifications for local small businesses that are not as easily able to relocate to a lower-tax jurisdiction or engage in costly yet sophisticated tax planning.
This is another one of those places at the intersection of government and business where policy may favor large companies at the expense of small ones. It’s kind of under the radar right now. But maybe we’ll hear more about it, especially now that states and local governments are so pinched for revenue. I’d be interested if there’s any research out there on how much more local businesses (and individuals, for that matter) have pay in taxes because of companies that shelter their earnings off-shore or in lower-tax states.