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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)."
I really get frustrated when doublespeak is acceptable. It's like the question, "Are prisoners in Guantanamo being tortured?" If they weren't being tortured, they would be in New York state, sitting in the same jail cells we use for other suspected murderers. The fact that anyone is asking the question is mind-boggling.
In addition to being a totally off-topic thread hijack, tell me when, in the history of warfare, have POW's/detainees ever gotten civil jails and courts? I thought in war, enemies went to POW camps until the war is over, like the US did with the Nazi's, the Japanese, the North Koreans, the North Vietnamese, the Confederate soldiers, the British, etc. The point being, we don't want the enemy coming back and shooting us again, as 61 released prisoners have done to date.
But now, because terrists flout all rules of war and Geneva, they should be treated better than POWs? I thought the point of Geneva was that you had to earn its protections by complying with its rules, carrot and stick. Think of the moral hazard. Now countries will actually be encouraged to foment terror, as terrorists will be treated better than POWs. And they can clog up our criminal courts with 100's even 1000's of them! Fun fun fun for Iran.
And now we have dropped the "torture" bar even lower. First it was waterboarding 4 people. But now torture is not getting the right jail? Have you ever seen a city or county jail? I assure you, Camp Delta is the nicest jail in the world. I saw a special on GB and I got hungry after I saw what they feed the detainees. So now torture isn't getting the right jail cell? And anyone who disagrees with that entirely new definition of torture is doublespeaking? Wow, just wow.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Maybe if the US tax policy wasn't insanely out of line with the rest of the world, we wouldn't have this problem. Can you blame these companies for getting away?
Absolutely, and this ludicrous, greedy policy (and regulations like Sarbanes-Oxley) are really helping to kill the US economy. Now a majority of the top IPOs every year occur in other countries. It used to be like 23 of the top 25 IPOs would always be in the US. Last year, it was like 2 of 25.
Other countries charge income tax based on income earned in that country. The US charges income tax for income earned in any country. Where would you set up your company?
Absolutely. I have three friends who got MBAs in the past 5 years. All three have separately joined or founded corporations in Ireland. Born and bred US MBAs, taking their business elsewhere. This tax policy is killing the US. And the remedy the Democrats want? Better enforcement! Right out in the open (failing) US companies are showing Congress, "look, we can't make it here, so we move our operations elsewhere." And the answer is to continue this policy, rather than, "hey, maybe we have made America business-unfriendly, and we should make the US more competitive to do business." Nope, the answer is to tighten the noose. Unbelievable.
Same thing is happening in California. Millionaires and business are fleeing. And all the want to do in Sacramento is spend more and tax more. Prescription for disaster. Oh well, they'll just spend spend spend, then blame Ahnold.
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Sure corporations do this. And not just US ones. And not just corporations, many non-profit organizations also benefit from that status to maximize their revenue.
Greenpeace, Amnesty International, Mozilla Foundation, Wikipedia and many, more more are just flying non-profit "flags of convenience" to avoid paying taxes on their commercial operations arms.
The Tax system is deeply flawed, and since it benefits the rich, powerful, and those who aspire to be, it's not going to change any time before Hell freezes over.
I find it amusing that US politicians are always talking about decreasing personal income tax, at the same time the corporate tax take has gone from 34% (1968) to just 15% in 2008. So who is paying the missing 19% of the tax take pie you may ask ? At the end of the day you and "your children" are as the government prints money and borrows. This gives the wonderful double whammy of an inflated currency (true worth of the currency drops) and a massive debt to pay off (over $3000 per person needs to be spent just to pay the interest every year). So as your tax money is used to bail out companies who pay less than 2% tax on total income thanks to off shored holdings you have to wonder who is getting screwed during this recession.
Right on. A switch from income tax, including capital gains and inheritance taxes, to a sales tax is the only way to ensure that the government gets its taxes.
The fair tax reduces the points of failure. Each entity (person, company, etc.) who pays tax is a point of failure: if an entity neglects to pay taxes, the government loses money (of course, the government can choose to pursue that entity for tax evasion, but that requires that more money be spent on forcibly collecting taxes).
By removing individuals and families from tax responsibilities, there are few points of failure, i.e. only entities which sell something (goods, services, etc.) actually pay tax. Of course, the purchaser—the individuals and families, plus other businesses—pays for that sales tax directly, and is thus still a tax payer, so they can still use the excuse to their elected officials, "I'm a taxpayer, listen to me."
In this way, we also collect tax from illegal aliens, legal resident aliens, and foreign visitors, who don't pay any taxes except local and state sales taxes on the things they (don't) buy.
It's also a far better stimulus than any package Congress could ever pass. These stimulus packages might trickle down so we taxpayers see $300-$600 per person, tops $1500. Imagine not paying any federal income tax. For me, that's another $10,000 in my pocket per year. I could turn around and spend more money on actual goods and services, which would have tax on them, and the government would probably make $6,000 of that back in sales taxes.
Combine my savings with the additional sales tax gains from the aforementioned people, plus the high-class folks who spend more in a day than I make in a year, and everyone is paying their share according to what they buy!
People are given an incentive to save, to build up their nest egg so they can spend more down the line.
It's not a perfect system—I would like to see federal taxes abolished altogether and the federal government get its operating budget from the states (300 million points of failure to perhaps ~25 million points of failure, to 50 points of failure). However, it's certainly a start.
Colin Dean Go a year without DRM