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GAO Reports Bailout and Tech Firms Love Tax Havens
theodp writes "Most of America's largest publicly traded corporations and Federal contractors — including those receiving billions of dollars from US taxpayers to finance their recovery — have set up offshore operations that could help them avoid paying US taxes, according to a GAO study released yesterday. Of the 100 largest public companies, 83 do business in tax-haven hot-spots like the Cayman Islands, Bermuda, and the British Virgin Islands. The report found that Citigroup, a recipient of $45B in bailout funds so far, has set up 427 subsidiaries in tax-haven countries, including 91 in Luxembourg, 90 in the Cayman Islands, and 35 in the British Virgin Islands. Household names on the lists from the tech sector include Apple (1 tax haven subsidiary), Cisco (38), Dell (29), HP (14), Intel (6), IBM (10), Microsoft (8), Motorola (4), and Oracle (77)."
Don't kid yourself, large US based companies doesn't pay tax either. Tax heavens are just an easier way to avoid paying tax, it is saving the companies money on the payroll to accountants and number magicians, but no not on the tax bill. Only people and small companies pay tax.
Yes... with the government involvement, their directive is no longer "to make money" but "do what we tell you to do". For banks, that means everyone should be able to own a home, even if they can't afford it. For GM/Chrysler, that means building green/ethanol vehicles (even if nobody wants them anymore).
Do you even lift?
These aren't the 'roids you're looking for.
To drive the economy, you want the people with the LEAST money to spend MORE money.
The VELOCITY of the money is what drives our tax system. The government gets more taxes if a dollar is used 100 times than if it is used 10 times.
Buying a pizza - taxed. ... etc
Pizza shop owner pays delivery guy - taxed.
Delivery guy goes to dinner with his girlfriend - taxed.
Restaurant owner pays cook - taxed.
Cook buys muffler for car - taxed.
Pump enough money into the lower economic rungs and more pizza delivery guys will have to be hired to meet the demand for more pizzas.
Give the money to some company that's going to stash it in an off-shore tax haven ... the US jobs stagnate.
I guess you haven't heard of many of the "offices" in the Cayman Islands consisting of one room, one phone, and one employee (never at his desk). Many exist purely to claim business in the country and filter money for tax purposes. They do no business there at all but save taxes.
Of course, this isn't every office or company. But many.
Developers: We can use your help.
Yes we would. However such a policy would make sense, which is why it would never be implemented.
Apple setup in Ireland to appease an EU mandate regarding labor content in their products. This sort of thing was also done by the US to Japanese TV manufacturers. It's a time-honored way to get manufacturers to spend a little money in the country they're selling into-- to avoid getting hit with taxes and duties.
However, very little manufacturing goes on in the Caymans, the BWI, and Luxembourg. They're tax havens, just like Cheney's Halliburton likes to use. Getting back that revenue would mean the end of corporate welfare, and that's unlikely to happen soon.
So call a shovel a spade and don't weasel word about the implications.
---- Teach Peace. It's Cheaper Than War.
Err, no. The main reason they are held in Guantanemo was for a jurisdictional dodge about holding them at all. One that didn't work out, as it turns out; the courts didn't buy the idea that they were beyond the reach of US courts just because they weren't within the boundaries of the United States.
Nope.
http://www.nytimes.com/2008/02/17/opinion/17davis.html?_r=1&ex=1360990800&en=a3b1d35d17a4d480&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
My policy as the chief prosecutor for the military commissions at Guantanamo was that evidence derived through waterboarding was off limits. That should still be our policy. To do otherwise is not only an affront to American justice, it will potentially put prosecutors at risk for using illegally obtained evidence.
Emphasis mine.
Nothing in this report says the companies do no business in the "tax haven" countries.
Sure. If I posited the same argument that a person who fit the profile of a crack dealer was passing "something" to someone in a car after exchanging money, you'd be the first in line to throw him into prison. I'm not saying they don't deserve due process, but a judicial branch that wasn't a secretarial service for corporate America would at least investigate.
Horrors. Why would a country ever want to do that?
I'm not blaming the country, or claiming the corporations are automatically guilty. When they do business that removes tax money from the community that built it's wealth, I consider that a worse offense than someone who is falsely collecting welfare.
I'm upset with the habit of Americans getting upset over social welfare and not over corporate welfare. When corporations have more rights than an individual person, not even equal rights, I consider that to be reprehensible. I can't buy a palm tree in Costa Rica and reduce my tax liability as an individual, but I could if I formed an LLC. In my opinion, that's bullshit.