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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)."
Isn't the way this worded presuming guilt before innocence? Is doing business in a tax-haven country an automatic fail?
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
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?
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?
The FairTax would instantly make the US the world's tax haven.
I was against the bailout to begin with, but this is silly.
We give them money, then they are supposed to give it back?
Is this so Hank Paulson and some IRS agent can siphon some off to keep their jobs?
2nd highest in the industrialized world behind only Japan, as I recall the most recent article.
California has the highest or 2nd highest corp. (and other) taxes and has a net outflow of population compared to inflow.
You don't think taxes has something to do with economic decisions?
Think again.
Theoretically, their duty is to maximize return on investment for their stockholders, which means doing everything they can legally to minimize their tax liability. So if a tax shelter is legal, expect them to use it. (If it's not legal, expect them to try to pretend it's legal.)
Now, though, because in some cases their partial owner is the U.S. government, there is a conflict of interest between the interests of the government shareholder and the private shareholders.
--- Thousands are enslaved every day.
I saw the same email you did, and the originator wasn't very good at math. It is closer to $400 per American, not $300,000.
Let us not become the evil that we deplore.
If the government is willing to give your tax dollars to companies that cheat the US, then the only appropriate response is to refuse to pay your taxes, and get as many people as possible to do the same.
I came here for a good argument
"there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible".
People and companies respond to incentives -- it is really surprising that the bizarre tax structure in the US pushes companies to form subsidiaries? Apparently it is, to either clueless or grandstanding politicians.
It's Linux, damnit! Pay no attention to renaming attempts by self-aggrandizing blowhards.
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.
Similarly, any company that sets up in a small country that they do no business in is obviously up to something. Otherwise they wouldn't be there.
American business is a game, where the winners are those who best exploit their workers, the tax code, government contracts, and the environment. The most important bit is not getting caught, and having a lot of lawyers if you do.
(I'd like to defuse any rebuttal by saying "Wal-Mart.")
They are receiving US GOVERNMENT funds taken from US TAXPAYERS and they're stashing them in foreign tax havens.
This is solely for the benefit of their executives. It will not help rebuild the US economy.
There needs to be a new law passed TODAY (drag Congress back in) that makes that practice illegal.
If you want "bailout" funds, you cannot use a foreign tax haven.
If you use a foreign tax haven, you cannot receive "bailout" funds.
Why should the US taxpayers finance some CEO's retirement villa in Monte Carlo while the economy drags?
Most of the major companies mentioned are not receiving any "rescue" from the government, and would not want or need any. Additionally, just because a business has set up a subsidiary in another country does not at all indicate that it is trying to avoid taxes. There are many reasons to set up subsidiaries, including requirements of the local governments. These are LEGAL subsidiaries, whether the purpose is for tax reasons or otherwise. The corporate tax rate is so high in the U.S. that some of these businesses (and others) feel compelled to take LEGAL action to lower their taxes to workable levels.
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.
dude, when you do... the coincidence is gonna blow your mind!
-- 'The' Lord and Master Bitman On High, Master Of All
I see the "republicans" tag on this story and am having a hard time making the connection. If I remember right, a large number of republican members of congress didn't like the idea of the bailout and continue to speak against the release of the second half of the money. We need a tag called "bipartisans." I think part of Obama's appeal to monied interests is "All this partisan bickering is getting in the way of what we can really do for this country: get paid."
When the axe came to the forest, the trees said, "Look out - the handle was once one of us."
Well if you had both read the fine article before it was overloaded and had to be changed, you would have find that it had a perfect system for getting rich whilst meeting beautiful girls (or boys or non-determined goth types, depending on your taste) which unfortunately I can follow but can't explain. So don't make this mistake next time.
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();
That they did nothing but deregulate for 10 years. The only reason some Republican politicians made political theater out of the bailout is because it was an easy way to appeal to pissed off citizens during an election year. Conservative economic policies have reigned supreme for a decade, and this mess is what we have to show for it. Don't feign surprise when blame is placed at the feet of the party that controlled the policies that lead to the mess.
Corporations and the power-elite have ripped the US taxpayers off to the tune of trillions of dollars over the past eight years alone. They always have, of course, but it has grown so rampant and egregious that we must put a stop to it once and for all. That means cracking down on offshoring and outsourcing by companies that come to the US taxpayer begging for hand-outs. It means life-sentences or worse for the white-collar criminals like Bernie Madoff who are responsible. It means revocation of corporate charters for companies that do wrong, to curb the complicity of Boards of Directors and middle-management in white-collar crime; there must be more cases like Arthur Andersen being put out of business by the government.
And to those who contend that if we hold companies and white-collar criminals responsible for their actions that capital will simply flee the country, I ask, where are they gonna go? Where can they go that the long arm of the American people cannot reach? Mars? Because the US can make life on earth very uncomfortable for any place else that arouses its ire by sheltering them.
Do what you can, with what you have, where you are.
If these companies didn't minimize their corporate taxes through any (legal) means possible, then they are doing a disservice to their shareholders. I would argue that they are doing a criminal disservice by not minimizing their taxes - they are not maximimizing the return on investment to their shareholders. Assuming that the money saved in taxes doesn't end up all being spent on hookers and blow for the top executives of a company, minimizing taxes helps the business grow. If you think paying taxes is such a great idea, go ahead, volunteer some extra money to the tax department, or avoid taking any of your legal deductions.
It's all part of the NewParadigm (TM). The NewParadigm ends with the old-fashioned way of taking money in form of taxes and using it to provide services to the people. The NewParadigm reduces the input of taxes, and makes up the difference by issuing debt, that is in turn bought by the Chinese, that for some cultural superstition of them, like to work hard, sell merchandise, and lend back all the received money to the buyers, to allow them to buy still more stuff.
In the NewParadigm is not wrong for corporations to use tax law loopholes to evade taxes, and even receive bailout money afterwards, because the bailout money is just more debt, and debt is good. The NewParadigm states that the bigger the debt of a country, so much the better, because the debtors will be scared of forcing a default, and will keep on buying debt forever. So now, besides having companies too big to fail, we have countries too big to fail. In the NewParadigm, once you have a company deemed too big to fail, you can stop working, because the government will pay all your costs, as by definition they cannot allow you to fail. If you manage to have a country too big to fail, you also can stop working, and finance yourself just by selling bonds.
The reason because the NewParadigm works is because the world increase of productivity has generated a net production surplus. With the old paradigm, there was no way to use that surplus. If you stopped working to reduce the surplus, you stopped having money, and so you died, or got sick or something, and usually returned to work, very likely coughing. If you kept on working, the surplus just got bigger, and was from time to time wiped out by crisis and wars. However, the increase in production lately has made those two methods rather inadequate anymore. The NewParadigm, however, offers a way out of the dilemma. You can now stop working (or pretending to work in non-productive jobs like marketing or politics or the military) and keep on living well just by adding to your VISA debt balance. A whole country can do that by adding the VISA debt balances of the population and putting them into bonds, and selling the to the Chinese. In that way the surplus is eliminated and global prosperity ensues.
Those that will like to point out the current crisis as a negation of the principles of the NewParadigm should be ashamed of themselves, as the current crisis is obviously produced by _failure_ to fully apply the NewParadigm principles. Some old fashioned thinkers, worried by old fashioned guilt thoughts about getting something from nothing, got cold feet and stopped issuing more debt. But now the good work has been taken up by the governments, and all the VISA debt will be backed up by bonds, that the Chinese will promptly buy. So please don't criticize these companies, they are the backbone of the next step in economical evolution, and you are old fashioned thinkers, probably full of shit too.
Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
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.
Ireland's taxes are lower than most of the rest of the EU, so it makes sense for any company doing pan-EU business to be based there. It also has had a number of years where it was a cheap place to get labor, and had workers that were educated and spoke English, though there's recently been a lot of business moving to Eastern Europe, especially Poland, where the labor's cheaper.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
You know, the torture going on isn't just waterboarding, humiliation, koran desecration, human pyramids, being threatened with dogs, or "not getting the right jail." It includes what acts that are unarguably torture, including being beaten and chained up until dead (http://en.wikipedia.org/wiki/Dilawar_(torture_victim)). Even when the sadistic bastards believed the detainee was innocent.
Some other examples of "not really torture" (http://en.wikipedia.org/wiki/Abu_Ghraib_torture_and_prisoner_abuse):
* Urinating on detainees
* Jumping on detainee's leg (a limb already wounded by gunfire) with such force that it could not thereafter heal properly
* Continuing by pounding detainee's wounded leg with collapsible metal baton
* Pouring phosphoric acid on detainees
* Sodomization of detainees with a baton
* Tying ropes to the detainees' legs or penises and dragging them across the floor.
And some other forms of torture, with real torture names that can really kill you, like strappado (http://en.wikipedia.org/wiki/Manadel_al-Jamadi). Although folks like you, Rush Limbaugh and all the other right wing nuts seem to prefer the doublespeak term "stress positions."
And I guess because some soldiers were just so stressed out and needed to blow off steam, some prisoners were just tied up, put in sleeping bags and beaten to death (http://www.washingtonpost.com/wp-dyn/content/article/2005/08/02/AR2005080201941.html).
But you're right, waterboarding isn't torture and it was only 4 guilty as hell terrorists anyway.
Okay, try this. You're constantly using infrastructure, and like it or not the government has been integral in the production of and modernization of many of the services (Police, fire department, a justice system, which however flawed at least exist) you enjoy as well as the protection of those services you enjoy (For all the ills of the military, and for all the idiocy of war, it is still a necessary evil to have at least a defensive force because the world does not run on rational discussion just yet). Taxes fund and ensure these programs and projects continue. Yes, taxes are also being and have been taken far beyond what they should be and at times are used improperly. But that's what the legal system is for, and while not perfect it's rarely one to sit back and overlook something big like government embezzlement when it's brought to the public.
You're confusing the tax rate with the tax take, two very different numbers.
Another argument is that your case is its own downfall. Your argument assumes that people want services like police, fire department, courts, and roads. In general, I agree that these are useful services which most people desire. However, as even a rudimentary introduction to economics will teach you, when the demand for a product is high, someone is likely to produce the product on a free market. Your argument makes the leap from "these services are useful and desireable" to "a single entity should use violence to enforce its own monopoly in the production of these services". Like any other product, in the absence of violent and/or fraudulent monopolies such as government, the market will produce a far superior system of courts, police, fire protection, etc., than any government could accomplish.
If you've ever watched the movie "Joyeux Noël", you would know that "fraternizing" is an extreme threat to the social order of warfare, and punished accordingly.
From Ebert
He is accurate, however, in depicting the aftermath: Officers and troops were punished for fraternizing with the enemy in wartime. A priest who celebrated mass in No Man's Land is savagely criticized by his bishop, who believes the patriotic task of the clergy is to urge the troops into battle and reconcile them to death.
Torture is a means of maintaining the required psychological boundaries which military duty entails.
Somewhere on the Michael Moore DVD, there is a scene of young American soldiers abusing an elderly Iraqi man, is tied up, has a black hood on his head, and appears to have some kind of injury. Would you let your own grandfather lie there in that condition? The troops resolve the cognitive dissonance by humiliating the man for his stress erection.
The men on both sides who failed to kill each other one Christmas night were dispatched on both sides to the bloodiest fronts in Europe. Who or what exactly was harmed by these men briefly failing to shoot at each other?
I suspect few of the men known to have fraternized survived the war. No army punishes its torturers as harshly. The actor who plays the drill sergeant in "Full Metal Jacket" was a real life drill sergeant. Under a psychological barrage of that intensity, not even the terminally obtuse fails to internalize the prevailing value system, and I'm not talking about the value system as portrayed in their recruiting pamphlets.
If patriotism was a rock band, torture would be one of the groupies.
You got one big difference people either don't think about or fail to mention. While soldiers might have had waterboarding or something similar applied to them (probably to train them to be less sensitized to it if done to them), the soldier is not going to be murdered by his superiors. They're never going to go overboard or make serious mistakes on their own comrades, and whether anyone admits this or not, anyone having this done to them (by their own military) is going to realize this.
A 'detainee' doesn't have this protection; he has no idea how far they will go and can fully expect to be drowned to death if he doesn't give them what they want (or what he hopes they want that he has so that he won't be murdered).
Even Hollywood recognized this, and years before 9/11 happened; go watch The Siege and look at Bruce Willis' part in the film; or even the whole movie, and maybe you'll understand the significance of why the treatment of so-called detainees will never be the same as treatment of ordinary people or those not considered to be combatants of any kind.
But going back to the use of simulated waterboarding in training, no matter how close the training is for our troops, it can never be the same conditions as someone who was grabbed by our military because they have no real protections that our own people have vis-a-vis their teammates and supervisors. (Does anyone seriously believe a guy is going to treat his buddy as badly as he would someone they've grabbed or bought from an Afghan warlord as presumably a combatant?)
I'll give you another example; use of torture or misconduct by soldiers encourages its use against them by others. Does anyone remember the stories of American Indians scalping people? Do you know why they did that? Because the white men (soldiers) did that to the Indians they found, and the Indians thought it was a sign of respect to warriors or at least it was a legitimate practice since the white men did it, so they did it too. But they didn't start doing it until after they saw how the white soldiers did it first.
The lessons of history teach us - if they teach us anything - that nobody learns the lessons that history teaches us.