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Thread: Senate investigators: Apple sheltered $44 billion from taxes

  1. #81
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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by CJ 2.0 View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by specklebang View Post
    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.
    Last edited by CJ 2.0; 05-22-13 at 06:37 PM.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by head of joaquin View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by CJ 2.0 View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by head of joaquin View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by head of joaquin View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by CJ 2.0 View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by head of joaquin View Post
    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

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by CJ 2.0 View Post
    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.

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    Re: Senate investigators: Apple sheltered $44 billion from taxes

    Quote Originally Posted by red_dave View Post
    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.
    Last edited by head of joaquin; 05-22-13 at 06:43 PM.

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