Last week, I blogged the Freakonomics blog’s invitation to pose tax questions to Michael F. Mundaca, Assistant Secretary of the Treasury for Tax Policy. From the 35 questions posed by readers, the Freakonomics blog yesterday published Mr. Mundaca’s answers to nine questions, including this one that I flagged last week:

Q.  Google cuts its tax bill by over $1 billion per year by clearing most of its foreign profits through Ireland and the Netherlands to Bermuda. Is this a good loophole for American corporations by lowering already high corporate tax rates relative to the rest of the world? Would shutting this technique down increase tax revenue or drive business away?

A.  I can’t comment on any particular taxpayer’s tax positions or tax strategies, but the Administration is concerned about U.S. companies’ shifting of profits out of the United States to avoid U.S. taxes. In our FY2011 Budget, we proposed tightening the tax rules governing the transfer of intangible assets—patents and copyrights, for example—to low-tax jurisdictions, which is a strategy some businesses use to inappropriately reduce their U.S. tax bills. Addressing it as we have proposed would make it harder to shift profits overseas to avoid U.S. tax and thereby increase U.S. tax revenues.