High personal and business taxes discourage work and investments and may lead corporations to practice transfer pricing and to shift their operations to lower tax nations (see Case Study 12-9.) by taxing wages and capital income rather than consumption, the present U.S tax system discourages work, savings, and investments, and reduces the economic efficiency of the nation. A fundamental tax reform to tax consumption rather than income (as the countries of the European Union do) is thus needed in the United States. To overcome the disadvantage that U.S. corporations have on the world market resulting from the present U.S. tax system, the government has been providing billions of be illegal by the World Trade organization (WTO), and the united State was required to remove them (see Case STUDY12-10)