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Senate investigators: Apple sheltered $44 billion from taxes

The laws are backwards. We tax the money they spend here and gift them the money the don't spend here. Seems ridiculous.

How about no tax for what they make here and tax the overseas income? Wouldn't that make more sense?

yes, if you wanted zero US-residernt multinational companies. But that would be economic suicide.

What folks here do not seem to get is that the US operates in a competitive global marketplace for residency services. Yes, you are essentially selling value to multinational corporations. We see this most clearly with the tax incentives and inducements offered to various corproations to settle in one local area vs another, but it applies on a global level as well. Countries like Ireland get this most clearly, but so do we in Canada where reduced corproate taxes are well understood to help draw foreign investment and additional work opportunities. You guys in the US, with your ridiculous corproate tax rates plus this confiscatory tax imposed on Canadian and french and Chinese etc earnings of US corporations, where the same corporations would not have to pay taxes to the US govenrment if they had tax residency in, say, the Cayman Islands, is a huge disincentive for US businesses to invest abroad (since $1 in earnings after foreign taxes translates into less than $1 in distributable income) and for non-US businesses to move their headquarters to the US.

And sure, you have a lot going for you which has allowed you to do well regardless. But (1) you would have done even better if you had implemented well designed policy to attract and retain businesses and (2) you can't rely on history forever. Other countries are continuing to increase their competitiveness, and you can't just sit back and rely on your laurels to convince companies to reside in the US instead of Canada or Singapore.
 
We should simply tax all global income of US corporations including any spin offs without credit for foreign taxation.

That would force them to stop seeking out tax shelters and pay their fair share.

sure it would.

Or it would force them to pull a Depardieu and move headquarters to an jurisdiction that is happy to have them as a producive contributor to societal welfare rather than a permanent teet to be suckled on by the parasitic class.

Think about it.
 
Pssst: you can only pierce the veil if the corporation is in fact a veil -- i.e., a fraud because it's undercapitalized from the start.

So now you're claiming you were only talking about fraudulent corps? Keep dancing.

:lamo

Well, you're certainly digging a deeper hole. Guess that's Progress for ya.
 
Tax US corporation's global income. No foreign tax credit gameplaying. No spins off treated differently. Problem solved.

Except as a result you will have two kinds of corproations - companies that are resident in the US and do business only in the US, and non-US corporations that operate globally.

Think about it. If I have a multinational that sources inputs and assembles product in Asia and then sells it around the world, why in hell would I choose to leave my company headquartered in the US such that I would pay an extra 20-30% in tax over and above what I already pay globally? Are you saying I'm stupid? That I "owe" it to the US to pay taxes even though my commerce has no real connection to the US? How in hell does that make any sense.

What will happen is companies that do a preponderance of their business in the SU will stay, though they will become less competitive against foreign companies. Meanwhile, companies that do most of their business overseas will leave, particularly where manufacturing is also overseas. Headquarters will move. Plants and places of manufacture will move. If it is so important to maintain production close to the US they will move to Canada and Mexico, where goods can be imported into the US duty free.

And the US economy will suffer.

This really isn't rocket science.
 
sure it would.

Or it would force them to pull a Depardieu and move headquarters to an jurisdiction that is happy to have them as a producive contributor to societal welfare rather than a permanent teet to be suckled on by the parasitic class.

Think about it.

If a corporation can move to a tax haven they already would have, so this isn't a real threat. Just rightwing rhetoric.

There are reasons for staying in the US (a good court system, no corruption, police, etc). If Microsoft wants to move to Haiti, let them. Make room for more innovative corporations here. Besides, they are taxable for the business they do in the US in any case. So we wouldn't be losing anything.
 
Except as a result you will have two kinds of corproations - companies that are resident in the US and do business only in the US, and non-US corporations that operate globally.

Think about it. If I have a multinational that sources inputs and assembles product in Asia and then sells it around the world, why in hell would I choose to leave my company headquartered in the US such that I would pay an extra 20-30% in tax over and above what I already pay globally? Are you saying I'm stupid? That I "owe" it to the US to pay taxes even though my commerce has no real connection to the US? How in hell does that make any sense.

What will happen is companies that do a preponderance of their business in the SU will stay, though they will become less competitive against foreign companies. Meanwhile, companies that do most of their business overseas will leave, particularly where manufacturing is also overseas. Headquarters will move. Plants and places of manufacture will move. If it is so important to maintain production close to the US they will move to Canada and Mexico, where goods can be imported into the US duty free.

And the US economy will suffer.

This really isn't rocket science.

The situation you described is what's happening now. It's exactly what Apple did. It spun off some enterprises and parked them in tax haven.

If a corporation can do that, they will, so we're no worse off taxing their global income. Indeed, we can require them to include the spin off income in their global income. Problem solved.
 
Why don't you explain this further what with retarded people trying to understand it.

Not the people, the policy. A policy whereby foreign profits are subject to tax above and boyond those imposed in foreign jurisdictions is a recipe to make US companies less competitive in foreign markets, reducing their ability to compete in those markets and thereby reducing the willingness of companies to take those risks. As a result, you get smaller incomming capital flows and less productive companies competing against foreign competitors.

So Apple has to pay this extraordinary tax, but Samsung doesn't, and over time Apple finds it harder and harder to remain competitive in foreign amrkets, which then impacts on ability to innovate and maintain the qualitative edge they need. (and remember, the alternative policy option that was proposed was a tax on all income from US HQed businesses, wherever those earnings happen to be earned)

Or better yet, Apple realizes that even with a reputational hit, it makes more sense to move up the coast to Vancouver, HQ and all, since production is already overseas and we are happy to have them up in Canada. They become a Canadian company and are not subject to confiscatory taxes on income in other jursidictions, such that they are taxed on Canadian earnings in Canada, US earnings in the US, Japanese earnings in Japan etc, while individuals continue to get taxed on dividends depending on where they reside.

What you are proposing is for the US to purposefully become LESS attractive and LESS competitive in attracting and maintaining multinational businesses, which is precisely the opposite of what a well-structured industrial policy is designed to do.

And my conclusion flows.
 
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The situation you described is what's happening now. It's exactly what Apple did. It spun off some enterprises and parked them in tax haven.

If a corporation can do that, they will, so we're no worse off taxing their global income. Indeed, we can require them to include the spin off income in their global income. Problem solved.

See, you are worse though. Because if that money was brought back into the US it would be available for investment. And since Apple can't seem to use it productively abroad, at some point they will have to decide whether it is more worth it to repatriate and suck up the tax hit or whether they should just pull up roots and move out. And the more money they have sitting outside the country, and the more of their overall business is outside of the US, the greater that incentive becomes.
 
Not the people, the policy. A policy whereby foreign profits are subject to tax above and boyond those imposed in foreign jurisdictions is a recipe to make US companies less competitive in foreign markets, reducing their ability to compete in those markets and thereby reducing the willingness of companies to take those risks. As a result, you get smaller incomming capital flows and less productive companies competing against foreign competitors. .

Since all the benefits of the competition flow tax free to the corporation now, who cares? Corporations either already leave the US for tax havens or they stay here because it's better to stay here for business reasons. So it's time we crack down on the tax avoiders so that those who stay here aren't competiting with scofflaws.
 
The situation you described is what's happening now. It's exactly what Apple did. It spun off some enterprises and parked them in tax haven.

If a corporation can do that, they will, so we're no worse off taxing their global income. Indeed, we can require them to include the spin off income in their global income. Problem solved.

No, the proposal from many here is something broader - that the US government actually require taxes be paid even if the money is not patriated into the US.
 
Since all the benefits of the competition flow tax free to the corporation now, who cares? Corporations either already leave the US for tax havens or they stay here because it's better to stay here for business reasons. So it's time we crack down on the tax avoiders so that those who stay here aren't competiting with scofflaws.

What?!? That doesn't even make sense.
 
See, you are worse though. Because if that money was brought back into the US it would be available for investment. And since Apple can't seem to use it productively abroad, at some point they will have to decide whether it is more worth it to repatriate and suck up the tax hit or whether they should just pull up roots and move out. And the more money they have sitting outside the country, and the more of their overall business is outside of the US, the greater that incentive becomes.

The money is brought back in the form of CEO salaries and shareholder dividends (the later of which we should tax at ordinary rates for the higher bracket).

Again, the problem you are describing is illusory. Corporations already optimize their tax avoidance. Taxing their global income will just make that harder; it won't cause corporations to abandon the US -- they've already done that when the can.
 
Since all the benefits of the competition flow tax free to the corporation now, who cares? Corporations either already leave the US for tax havens or they stay here because it's better to stay here for business reasons. So it's time we crack down on the tax avoiders so that those who stay here aren't competiting with scofflaws.

Or place an embargo on said Tax Havens
 
What?!? That doesn't even make sense.

It sure does. What do I care if US corporations are competitive is they get all the benefits and don't pay taxes on it. They may as well be foreign corps.
 
or place an embargo on said tax havens

bingo!

Or simply tariff the sales of any products from corporations that set up shop in tax havens. Problem solved.
 
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No, the proposal from many here is something broader - that the US government actually require taxes be paid even if the money is not patriated into the US.

Yep, that's what we need to do to make tax avoidance impossible. Then the corps may as well stay in the US. They won't benefit from spin offs and foreign divisions.

Again, you're missign the point. Corps that can leave have left. Corps that have spun off into tax havens have. They always optimize their tax avoidance. So we're punishing them, and that benefits the corps that haven't left.
 
Or place an embargo on said Tax Havens

Do you two even realize he said you were shooting yourself in the foot already? What would shooting yourself in the other foot get you?
 
The money is brought back in the form of CEO salaries and shareholder dividends (the later of which we should tax at ordinary rates for the higher bracket).

Except Apple is just sitting on the cash because of the extraordinary corporate tax that would go on even before the dividends are taxed.

This policy you have is essentially cutting off your nose to spite your face.

Forgotting the useless lefty talking point about "CEO salaries" (which is just this classist nonsense the left uses to avoid having to think about real life), again what people are proposing is to force US companies to pay US taxes on every dollar theyearn in Canada. So they earn $1 in Canada and pay 20% of that in taxes to the Canadian govenrments, then they bring back 80 cents to the US and have to pay 30% of that in taxes too. And then, of the 56 cents dividended to shareholders, another 15 cents or more can be yanked off in taxes.

So why in hell is Wal-Mart or Home Depot or any other US-resident corproation expanding into Canada or Mexico or anywhere else, if they bear all the riskl of expanding but face this sort of confiscatory penalty if they succeed?

And sure, you might believe that US companies should not be investing abroad, but that would make you economically illiterate.

Again, the problem you are describing is illusory. Corporations already optimize their tax avoidance. Taxing their global income will just make that harder; it won't cause corporations to abandon the US -- they've already done that
when the can.

2 things:

1. The existing system is already distortative and harmful to overlal US productivity and welfare.

2. Tightening the system on US corporations operating abroad through subsidiaries will further tilt the playing field, since you have no right at all to tax global incomes of Canadian or Chinese or Japanese companies just because they have branches in the US (you taxing my commerce activity in Canada seems markedly worse than the tax issues that you declared independence over). So all you aredoing is f***ing your own companies up their bums.
 
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Except Apple is just sitting on the cash because of the extraordinary corporate tax that would go on even before the dividends are taxed.

This policy you have is essentially cutting off your nose to spite your face.

Forgotting the useless lefty talking point about "CEO salaries" (which is just this classist nonsense the left uses to avoid having to think about real life), again what people are proposing is to force US companies to pay US taxes on every dollar theyearn in Canada. So they earn $1 in Canada and pay 20% of that in taxes to the Canadian govenrments, then they bring back 80 cents to the US and have to pay 30% of that in taxes too. And then, of the 56 cents dividended to shareholders, another 15 cents or more can be yanked off in taxes.

So why in hell is Wal-Mart or Home Depot or any other US-resident corproation expanding into Canada or Mexico or anywhere else, if they bear all the riskl of expanding but face this sort of confiscatory penalty if they succeed?

And sure, you might believe that US companies should not be investing abroad, but that would make you economically illiterate.



Again, the problem you are describing is illusory. Corporations already optimize their tax avoidance. Taxing their global income will just make that harder; it won't cause corporations to abandon the US -- they've already done that when the can.
You keep repeating the same mistake and refuse to acknowlege it.

WHAT DO WE CARE IF WALMART EXPANDS INTO CANADA IF WE IN THE US DON"T BENEFIT BY GETTING MORE TAXES?

Answer: not a wit. All you're saying is let's have a tax policy that benefit corporations (i.e., their wealthy owners and CEOs), for the hell of it.

No thanks.
 
It sure does. What do I care if US corporations are competitive is they get all the benefits and don't pay taxes on it. They may as well be foreign corps.

That you do not understand the economic benefits of earned income flowing into the US from foreign countries is only a testament to your lack of understanding of how economies actually work.

Again, it is a shame that the left does not pl;ace more of a priority educating its folks about economics. They could accomplish so much mroe by using economics rather than denying reality. I don't know any other way to describe the willingness of the left to pretend economic reality doesn't exist than "anti-science", which applies just as much to the left on these issues as it does to the right on a whole host of things.

Neither side is pro-science when reality interferes with what they want. And you want money earned by other people to flow for your own benefit and are willing to pretend the obvious results of your policy prescriptions will not only not get you what you want but will actually make it worse for you.
 
You keep repeating the same mistake and refuse to acknowlege it.

WHAT DO WE CARE IF WALMART EXPANDS INTO CANADA IF WE IN THE US DON"T BENEFIT BY GETTING MORE TAXES?

Answer: not a wit. All you're saying is let's have a tax policy that benefit corporations (i.e., their wealthy owners and CEOs), for the hell of it.

No thanks.

Really? Are we pretending now that only the wealthy own shares? No pension funds, right? And no benefit at all from earnings coming into the US?

I'm largely done here, but once again I just need to express my dismay at the economic illiteracy of the left and appeal to the rest of the community to understand that the left can never be trusted to advance sound, well-developed economic management principles.

Cause they don't have a clue what they are talking about and, almost as dismayingly, they make Ayn Raynd sound like she does.
 
That you do not understand the economic benefits of earned income flowing into the US from foreign countries is only a testament to your lack of understanding of how economies actually work.

Again, it is a shame that the left does not pl;ace more of a priority educating its folks about economics. They could accomplish so much mroe by using economics rather than denying reality. I don't know any other way to describe the willingness of the left to pretend economic reality doesn't exist than "anti-science", which applies just as much to the left on these issues as it does to the right on a whole host of things.

Neither side is pro-science when reality interferes with what they want. And you want money earned by other people to flow for your own benefit and are willing to pretend the obvious results of your policy prescriptions will not only not get you what you want but will actually make it worse for you.

Didn't happen with Apple did it? Apple dumped a bunch of cash into a shell subsidiary in Ireland (it wasn't sellng 64% of its phones there, but that's where its cash went), paid a minimum foreign tax rate in Ireland, and paid nothing on the income here. Further, since Apple is stingey with diividends, the US didn't even get to tax that (which by the way are taxed so low that essentially this shell game allows earned corporate income to be transmuted in low rate dividend income).

Tax global income and the shell game will stop.

In contrast, if Apple really can sell more phones in Ireland and wants to pull up stakes and move there, let them. It ain't going to happen.

This is the difference between real ecnomomic activity and the vast amount of transactions that have no economic purpose but to avoid taxes. With many large corporations, most of their energy is spent not in making real goods and services, but in avoiding paying taxes. It's inefficient and the real economy suffers.

Hell even Reagan understood that when he reformed the 1986 tax code to get rid of tax shelters, separating passive and active income.
 
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You mean the rich and tax cheats don't

No, I mean people who understand how incentives affect behaviour and behaviour affects outcomes.

And I, neither being rich nor a tax cheat, wouldn't trust the left on an economic issue even if I agreed with the policy objective (which I often do). because even where I 100% agree with leftists on policy, I am not naive enough to believe they have the slightest idea about how to actually achieve that objective. Almost invariably, their economic illiteracy and unwillingness to confront reality as it exists will result in a policy perscription so deluded, so out of touch with reality, that it could only cause harm to all involved while doing nothing (at best) to actually advance the goals that they are trying to advance.

And this thread is a perfect illustration of that.
 
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