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Battle Lines Being Drawn As Obama Plans To Curb Tax Avoidance
theodp writes "Barack Obama has squared up for a major battle with big business, announcing a crackdown on offshore tax avoidance and evasion by US multinationals that's designed to raise $210B and make it easier for companies to create 'good jobs here at home'. Obama cited a building in the Cayman Islands where more than 18,000 US companies are housed: 'Either this is the biggest building in the world or it is the biggest tax scam in the world,' he said. 'I think the American people know which it is.' The administration says that more than a third of US foreign profits in 2003 came from Bermuda, the Netherlands and Ireland, and noted US companies paid an effective tax rate of just 2.3% on the $700bn they earned in foreign profits in 2004. Among tech companies affected by the crackdown, Microsoft joined 200 companies who signed a letter complaining that the proposed tax changes would put them at a disadvantage with their rivals, Cisco moaned that the measures 'would adversely impact our ability to invest and grow our business in the US,' and Google declined to comment for the time being."
Its a building of holding... Duh.
If sharing a song makes you a pirate, what do I have to share to be a ninja?
Avoision.
No kidding!!! What do you say at this point?
two ways to solve the tax "scam"
1. raise overseas tax
2. lower domestic tax
guess which road the government takes.
Krusty the Clown has been arrested for tax avoision...I don't say evasion, I say avoision.
I'm not cool enough to have a
I'm not a big fan of the system, but fixing it is a big step in the right direction. I wonder if/when we'll see the EU do the same thing (e.g. with Monaco).
For every problem, there is at least one solution that is simple, neat, and wrong.
What does he think is going to happen? These evil rich businessmen are going to go out and deliver pizzas in their free time to pay the extra taxes? Corporate taxes are exactly the same as raising income tax, except you are paying at the point of purchase rather then the point of earning. The only real point of corporate taxes is to give the government the ability to punish companies that fall out of favor.
Paying taxes to buy civilization is like paying a hooker to buy love.
...buy a congressperson!
Something tells me he won't follow through on this when he realizes those same corporations helped get him into power.
Not my free market! Take your hands off my free market Nobama!
Oops we're bankrupt, give us money Mr. President :(
Am I cynical to think that these businesses will just raise the cost of their goods to cover the additional tax, thus making consumers the ones to pick up this $210 billion tab? I somehow doubt that publicly traded companies are excited to see the earnings hit show up in their quarterly statements.
And he wants to do you but good !!
For the infrastructure they use, for the costs they incur upon citizenry, for the government support they receive regularly, and the bailouts they get surprisingly often?
About. Fucking. Time.
The common citizen pays far too much of the tax burden, while the corporate "citizen" reaps too many of the benefits. The more they weasel out of, the more we, the people, have to pay.
Corporate taxes are a stupid idea anyway. The money has to leave the corporation somehow.
Pay the money to employees --> Income Tax
Pay the money to stock holders --> Corporate Tax + Income Tax
Invest the money --> No tax (though arguably capital gains if investing the money increases the value of the stock, and then capital gains tax isn't paid until individual investors realize the gains by selling their stock)
The money shouldn't be taxed until it leaves the company in the form of employee wages or dividends. And then, it should be subject to plain old income tax.
The stock market went up today.
This should really be viewed as a Return To Normality, or the removal of the corrupt tax avoidance schemes that the Talibangelists put in place.
To have a battle, you need to be fighting. The media just want to sell ads.
-- Tigger warning: This post may contain tiggers! --
is the largest protection outfit in the world. If these fsckin' companies don't pay their dues, they don't get protected, you know what I mean.
For starters, maybe if corporations started paying their taxes, we could take down the debt some, or maybe we could lower taxes on the rest of us. I don't feel bad for the corporations, maybe they'll just have to forgo paying their executives their excessively huge salaries.
Also, every time Obama does something wrong, we see a bunch of people making sarcastic comments here on how Obama represents "change we can believe in". I do not agree with everything he has done, but I do like to see this sort of thing, he seems like he is honestly trying to run the government in a fiscally responsible way. That's a big difference from our previous president who refused to cut spending to pay for his tax cuts, and even refused to allow the cost of his several hundred billion dollar unnecessary war to be included in the normal budget. We're all paying for that kind of "limited government" now, as will be our children and grandchildren.
Gentlemen! You can't fight in here, this is the war room!
This is the major problem with the political system. The people voted for change - news flash here, there won't be any change except what is left in your pocket. The machine must be fed. The US tax code is so bloated and filled with special interest deals that unless government shrinks, TAXES WILL GO UP! This is a Demopublican problem. There is no differences between the parties - and they are partying on your money.
If you push on the balloon it will expand somewhere else.
Buckle in, this is not going to change unless all the bastards are thrown out, ALL OF THEM!
"I say we take off, nuke the site from orbit. It's the only way to be sure."
Then they'll need a defense budget as large as the USA and maybe have to increase taxes just to pay for it.
Once I was a four stone apology. Now I am two separate gorillas.
And of course we can expect this to work flawlessly, and won't make businesses avoid the US, just like other great laws such as SOX.
How about lowering taxes and making the tax code simpler, so theres not all these loopholes and thus no reason to have the offshort accounts.
Complicated tax codes create the loopholes that allow this to happen, and this legislation will only make more of them.
They just stop being US-based, or sell their international holdings. Now instead of a US company doing business in Tokyo and not paying much US taxes, it becomes a Japanese company doing business in Tokyo and paying 0 US taxes.
How is this an improvement?
It's like this guy was born yesterday. International corporations are never going to pay much in the way of income taxes in high-tax jurisdictions because they can control where profit is realized. He can't affect that with just changes to the tax code - that would take a wholesale rewrite of international treaties and business law. A rewrite which would be followed promptly by the biggest trade war the world has ever seen. I would be my last dollar gross tax receipts from corporations don't go up one penny as the result of changes Obama is planning.
Via Google http://www.guardian.co.uk/technology/2009/apr/20/google-uk-tax-avoidance
What are they talking about?
We pay over 30% corporate tax. and compulsory health insurance for our personnel.
...nobody's right if everybody's wrong
^obligatory buffalo springfield (for what it's worth) reference
Those of us who think they know everything annoy those of us who do.
why not just have a national tax like the UK has? you pay a tax for every thing you buy and you then have non of this IRS tax evasion, because you have to buy things, so you then pay your taxes that way. Hell most states and cities get there money only from sales and property taxes. (yes some states have incomes tax but I am not in one so...)
Might this be the main post office with perhaps about 20,000 PO boxes?
Also, if there were a company that stopped all the junk mail and forwarded all of the legit mail, I might put them down as my address too.
Or, more seriously, if the location of the actual HQ of those companies did not have such high taxes, then it would probably not be worth the effort of setting up that dummy HQ.
That is one of the reasons both Regan and Bush were able to both cut taxes and increase tax revenue at the same time.
If you reduce the incentive to avoid taxes, fewer people will go through the efforts of doing so.
(Obviously cutting taxes will not always increase revenue, but the 'sweet spot' of maximum tax revenue does seem to be somewhat lower than the current tax rate, at least in the US)
Till now, poorer countries were thriving because of American way of outsourcing I guess now few thousands may thrive in Buffalo N.Y as opposed to millions in Bangalore, India
When a thief sees a saint, all he sees are his pockets!
Offshoring won't go away even if you lower taxes to 0.
There are other reasons for offshoring companies that may be just as important as the dollars saved on taxes, such as laws regarding bookkeeping, how dividends are payed, what is illegal or not etc. etc.
Why look so far, Delaware is right around the corner... The biggest tax (evasion) haven in the world. Wyoming, Nevada, Alaska... But I guess pointing fingers at others is easier, and more profitable. Hypocrite.
Most of those Bermuda/Cayman holding companies exist not to avoid taxes entirely, but rather to keep the US from double-taxing profits that have already been taxed once by Europe/Asia, which is what the US does when this offshore trick isn't used.
It seems likely to me that if US companies can't do that any longer, many will cease to be US companies. It's not that hard to move HQ to Ireland or Canada or wherever. Then the US can become a nation of grunt workers while the real power and intellect (and taxable personal income) is abroad.
Pathetic. There's going to be no reason left in the world to incorporate in the US.
Oh yeah, the Strenght of the American Worker, of course.
\u262D = \u5350
With the "free" (read "internationally managed") trade agreements we have with foreign nations, I don't think "fixing" these "loopholes" will have the effect this administration desires. "Fixing" these "loopholes" and thus increasing the over all tax burden of a corporation may have quite the opposite effect.
If it becomes more lucrative and less of a tax burden to be a foreign business inside one of these countries with managed trade agreements instead of a domestic one, what will happen? The business will move because tariffs and import taxes become cheaper than domestic ones. That means unemployment grows and tax revenues drop.
This administration would be well served to tread lightly, and ensure that conducting business withing the U.S. is cheaper than foreign alternatives, else the U.S. may find itself with very little businesses conducting any business at all.
Be Safe! Sleep with a Marine. Semper Fi!
It is not the case that "usually" lowing taxes increases revenue. It hasn't seemed to work too well for the last several rounds of tax cuts. Certainly there is a point where lowering taxes reduces total revenue. That point is a tax rate somewhere between 0 and 100%; where? That's up for debate.
Many economists would argue we passed that point some time ago.
SirWired
I think we all know that the economy is going to get worse before it gets better, and I think that this and other unpleasant things we're inevitably going to hear about are just the outward symptoms of precisely that. We've got a system that doesn't work anymore and I don't think you can fix it without doing some things differently. Whether or not this is going to do any long-term good or not is more a matter for future historians than anyone else; we KNOW there are going to be at least as many mistakes made while trying to clean up this mess we've made for ourselves as there are going to be smart insightful decisions. So, complain away, if that's what you feel like doing: get it all out of your system instead of letting it build up, your health will be better overall. ;-)
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
This is more or less what's happenning to the USA as a whole. American companies simply cannot compete against foreign companies, that's why the industrial sector is moving to Asia. It's useless to say "stop trying to make a profit and die", they died a quarter century ago.
It's the US government at all levels, federal, state, and local, that should learn to live by the rules. When the corporations are moving overseas to places with lower taxes this means your taxes are too high, you should cut government spending and taxes at the same time.
If you truly cynical, you'd realize that companies price things as high as they can regardless. The only "pass the cost onto consumers" factors are ones where companies think they can use it as an excuse. But saying, "We're in two wars in the Middle East so of course gas cost more!" is a hell of a lot easier to pitch than "The government won't let us blatantly abuse the tax code anymore!" (though, it's fun watching them try).
The race to lower taxes is a race straight to the bottom. Businesses will continue to use tax havens as long as there is any benefit to doing so, and the simple fact is that a big economy like the USA cannot afford to lower tax rates to what a little place like the Cayman Islands can charge, e.g. basically nothing.
A better solution is to change conflict laws to ignore the formal jurisdiction of incorporation and instead use the primary place of business. Want to be a Cayman corporation? Then move your ass to the Cayman Islands, along with your entire family. Otherwise, you will be taxed based on where your company really is headquartered. This is something that the major economies of the world can cooperate to make happen, and we don't have to drop our taxes into the toilet to do it.
The Netherlands in fact is a tax haven for holdings and such. Much like Ireland. The whole taxing thing is a big race to the bottom between countries. It's a good thing Obama tries to put an end to this, the US is big enough to be able to force this upon companies. Hell, they even force it upon the Swiss.
These States function exactly as tax heavens not only for foreign companies...
Mod parent up. People who want to raise taxes on evil "big business" seem to not understand that the end result is that those evil "big businesses" will have to fire people or increase their prices to remain competitive successful.
Big businesses employ big numbers of people. This concept is lost on most Democrats and populists that scapegoat big corporations. You can't just blame big companies for everything and expect that they'll ignore this and carry on!
Here in Wisconsin we are looking at a number of laws that will substantially increase taxes on corporations doing business in the state. As a direct result of the anti-business climate in the state, a number of businesses have either relocated operations that were in Wisconsin or actively decided to decline to locate their headquarters in the state -- for example, our famous Miller Brewing Company, formerly headquartered in Milwaukee, merged with Coors of Denver and decided to relocate their headquarters to Chicago.
Congratulations on missing the point congress. (surprise)
Forbes had a great piece on this a few months ago. People aren't going to Ireland / the Caymans because they don't want to pay taxes and just want to cheat... the cost of compliance is too high.
One of the good things Regan was supposed to have done was get lots of tax money back to the US by simplifying our tax code. Even though they may have brought their money back from countries with lower tax burdens, it was easier to have it in the US.
There is an opportunity cost to moving your money to another country or using a tax shelter (legal or not). People judge it worth it because of what they have to go through.
If you simply simplify the tax code so it's not so hard to deal with, people will come back. Things have only gotten worse recently with SarbOx. Closing loopholes is trying to tie the arms of suicidal people to beds. It works much better to try to get them to stop being suicidal.
There will always be people who try to cheat the system because they are immoral jerks. But if it doesn't take wealthy people a team of 30 tax attorneys to keep their wealth in line, they're more likely to keep it in the US and avoid the hassle of all the international laws (and spending 183 days of the year out of the country, and blah blah blah). No tax breaks for pork farmers on 17-35 acres in areas that don't observe daylight savings time unless they grow at least 3% barley ethanol using sustainable methods.
The problem is complexity in the tax code, not tax shelters.
Example way to fix things.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
To "Incorporate" means to be rendered as a corporeal entity for the purposes of agglomerating the income from said entity into one. Said entity must pay taxes like the rest of us corporeal entities. But instead he says, nope sorry I made all that money in the Bahamas not here so it's not really in your jurisdiction to tax me. So instead of paying his due as the rest of us are expected (because we can't afford to have our mailing address in the Bahamas, cause we actually want to be able to get credit here) he pays the pittance that the Bahamian nation charges and we say Ok that's alright. But that corporation takes advantage of being in this country with all it's infrastructure and services while paying as little of the legally (ordinarily) levied taxes as possible.
Yeah sure lower their taxes and take the income due a small Bahamian nation to pay for our infrastructure. Why not, it's better than nothing I guess.
Why bother
Name 3.
everything in moderation
Note how significantly less 30% is compared to US corporate tax. In the US, S & C corporations are double taxed -- first on their income then when the remaining profits are distributed as dividends.
When a politician, typically a Democrat, speaks of increasing corporate taxes, they typically have no idea just how insanely high corporate taxes already are.
Companies that cheat a country out of taxes should be barred from selling their products in that country. My guess is that if North America and Europe signed a treaty to that effect (pay your taxes or else you can't operate here), we'd suddenly see a large increase in tax revenue. It's hard to make a profit after you lose 1.2 billion potential clients.
I came here for a good argument
Seriously, no. There are things you try before war. For example, cutting off their access to the world financial network. Passing law in your home state to not recognize any corporations housed in a foreign tax harbor, or to charge them triple or quadruple their purported taxes, or to charge them as if they were located in the United States, with a 1% administrative surcharge--unless their business is convincingly and legitimately located in the country in question.
You do not START A WAR, even with a country with barely a military to speak of, if you have reasonable alternatives. Further, the alternatives are better for our tax structure and don't penalize legitimate businesspeople in those states.
Politicians know how to say what we want to hear and then go ahead and push their own unannounced agendas.
So, words are cheap. We are the people and want to believe that one man can stand against the established system of corruption and corporate reign that produced him and that same system miraculously put this man in control of its own destiny. I would like to believe it, too.
At best we are getting someone we can love and respect because love and inspiration are more powerful than fear and hate. That extra will allow us to swallow bigger chunks of shit and the extra power will give us the umph to push a little harder for the agenda of our overlords.
On the other hand, a list with the names of the tax-evading companies and their CEOs that the IRS went after, and how much tax was collected would be a very exciting news.
And if on that list I see the names of a few multibillion dollar multinationals with powerful lobbying representation, I will go to the store and buy me an American flag.
It's funny listening to Obama preaching about raising taxes. Assuming American companies said "Gee, Obama is right, we should pay more taxes!", which companies does Obama think could afford to pay those taxes?
Even with the existing tax havens, traditional American companies like GM and Chrysler are going broke and selling their bits and pieces to foreign companies. How many trillions have the US federal government paid in the last six months to save American corporations?
Oh, OK, go ahead, raise those taxes. Raise $200 billion more in taxes and pay $200 billion more in bailouts, is that how it's supposed to work?
U2 moved their tax status there to avoid paying Irish taxes:
http://www.independent.ie/national-news/u2s-tax-move-is-defended-by-bands-manager-79319.html
or just google u2+tax to see all the hits you get.
Give it up, dude. The progressive mindset is taking over in the USA, and we are well and truly hosed. The class warfare propaganda worked like a charm.
What? You think it's just bad planning that the schools don't teach critical thinking or decent math skills? You think the teacher's unions *want* little Johnny and Sally to learn enough to see through their in class propaganda sessions?
Microsoft -> kick up a big fuss
Cisco -> say it's a bad idea
Google -> keep quiet and get taxed
Obviously using tax havens may be considered evil in itself, but at least they are being the least evil.
IranAir Flight 655 never forget!
in their home country for profits earned abroad? The US is one of the few who do.
It makes American business less competitive overseas so why shouldn't they avoid it.
Besides, its a misdirection to claim a business pays taxes, it only collects.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Tax "avoidance" is legal. You "avoid" being liable for a sales tax when you decide to skip purchasing a pack of gum. Only a moron pays taxes he can reasonably avoid. Since when does doing the same make a corporation evil?
Don't be surprised if making it harder to avoid taxes forces companies and jobs out of the country. Companies that have that option are already planning to move.
And for the companies that can't move, as the folks above point out, the consumer always pays the cost of doing business, taxes included.
I've never had any problem paying taxes. Yes, there's a lot of waste and corruption, but it also does a great deal of good - schools, roads, social security, etc.
Until now that is. The government's trillion dollar theft and subsequent handouts to corrupt executives, failed industries, and the like - all of which we, the taxpayers, are going to be paying back - dollar for dollar plus interest to the Chinese - has changed my mind completely. The representatives who voted for these measures are criminals - they got their legalized bribes from campaign contributions, and payed it back with our fucking money.
The more ways to avoid paying into this corrupt system, the better, and if that means some sleazeball companies benefit, I can live with that. Because let me tell you, we all have a moral obligation to resist and avoid a completely and thoroughly corrupt system. And if you think that's self-serving or throwing the good out with the bad, then so be it, because this trillion dollar theft is the breaking point for me.
Many large banks (I imagine this applies to enterprises above some size, but I happen to have direct knowledge of banks in this regard) decide how much tax they will pay in any given year as a matter of policy, as opposed to a matter of accounting. The tax laws are sufficiently complex that with a little creativity, they easily could pay zero tax. Instead, they choose a tolerable level of tax that will not expose them to political grief.
Short form:
remove the income tax and replace it with a combination of flat rate property and sales taxes, eliminating ALL tax credits.
sales tax on every purchase of goods or services, including stocks, food and congress critters, within the jurisdiction of the USofA.
all property, anywhere, owned by a citizen of the USofA or resident alien, is taxed, as is ALL (churches, too) property within the jurisdiction of the USofA, regardless of owner. the exemption is only up to the point where the cost of collecting the money is less than the revenue. penalty for underreporting is loss of all unreported wealth, plus 50%, plus enforcement costs.
essentially everyone contributes to the maintenance of the state, either when you spend money, or when you have enough of it to be worth collecting from.
balance the revenue so that neither sales nor property taxes are collecting more than 2/3 of the total.
simpler to compute than deciding what is a legitimate "expense", policy-neutral regarding the source and disposition of income.
if we want to subsidize some activities, such as raising children, switching energy bases, or whatever, then specific grants would have to be passed to do that.
What does he think is going to happen? These evil rich businessmen are going to go out and deliver pizzas in their free time to pay the extra taxes?
I like your use of the word "extra". This is about removal of tax breaks — some of which end up subsidizing business for exporting jobs. All anybody wants is for the ERBs more of their fair share. I say "more of" because I have no hope of their ever being made to pay their fair share. When you're rich, it's much easier to duck responsibility, and that's never going to change.
And no, that's not an argument getting rid of rich people. We need greedy people to make the system work. But it is an argument for not letting those greedy people make excessive use of their disproportionate power.
Your comment about pizza delivery is the kind of lame nonsense that always appears whenever people are whining about taxes. Paying more to the government may hurt, but spare us this nonsense about having to take a second job or go on welfare. You might have to downscale your car (or, if you're an ERB, your yacht), but you're not going to be driven to extreme hardship by a few extra percentage points on your tax bill.
I speak from personal experience here. I have been on welfare, and believe me, it's not something people do voluntarily, whatever the talk radio idiots say. Much later, I was living on unemployment, odd jobs, and some small savings, spent 80% of my income on rent — and still had to pay income taxes. Now I make six figures and pay a huge tax bill on it. (Though not as huge as if I were living in "socialist" Europe, where they mysteriously still have beamer-driving yuppies and ERBs with yachts.) But somehow I can't seem to find the resentment you do.
This whole idea of fixing loopholes and getting even with "big businesses" that are "screwing everyone else" and pulling off a big "scamp" is complete absurdity.
A loophole is another way of describing a legal way to avoid a tax. Businesses would be foolish to not avoid taxes. Avoiding taxes, saves money, which, *gasp*, gives them more money to invest. That means more jobs.
This line from the President about encouraging growth in the US is complete nonsense. Moving headquarters to change your tax liability if anything increases your domestic advantage and allows you to do more.
Does he seriously think that these business, after forking over 210 billion more dollars, will reach far into their pockets to invest money they weren't investing before?
This will put some businesses out of business. It will push others completely off shore. For those that stay, they will probably have to lay off employees or shut down locations or invest less in R&D. If they decide to forego these options, they'll raise prices or cut shareholder dividends. Every tax is a tax on a consumer. There is no such thing as a corporate tax.
This idea that businesses collect money and sit on it like Scrooge McDuck, going for daily swims, is silliness. If they have more money, they will create more jobs and more venues for their business. Sure, they make keep some liquid assets, but only to increase their solvency, and eventually contribute to growth.
Closing "loopholes" is a tax increase on all of us. Any other way of describing it is dishonest or ignorant.
How much its going to cost the government to enforce these new rules over the next ten years? Is it going to be anywhere near 210 billion? Did ya'all notice that it's 210 billion spread out over TEN years? Otherwise, if you wanted to look at our yearly income - we are talking a $1,023,739,000,000 (approx) in total tax revenue a year - and we are talking about increasing that by about $21,000,000,000. That's about 2%, if I've got my math right. So, again, how much will the enforcement of these new rules cost, per year?
Why not expect the companies to make their operations leaner too. Seems to be what you want government to do?
Why bother
Which economists? How many? I hear that stuff too often without it ever being backed up.
It is not the case that "usually" lowing taxes increases revenue.
[[Citation Needed]]
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
Or, not. Never ending wage slavery is always an option.
Shoes for Industry. Shoes for the Dead.
If they moved to CHICAGO for tax benefits, then there is something seriously wrong with the cheese in Wisconsin.
Learning HOW to think is more important than learning WHAT to think.
Certainly there is a point where lowering taxes reduces total revenue. That point is a tax rate somewhere between 0 and 100%; where? That's up for debate.
There is also a point where higher tax rates reduce revenue. I posit that that point is lower for entities like a corporation. They can move their headquarters to another country at will when it is more profitable to avoid taxes.
Never go to sea with two chronometers; take one or three.
Operative word being "would". If you were to gather all the economists in the world and put them all in one room, and propose to them what sirwired said, I'm sure that many *would* argue that we passed that point some time ago. It's a fairly safe bet that there wouldn't be unanimous disagreement with this statement, among all the economists on planet earth.
You're the one who wanted to get pedantic.
There are almost 200 countries in the world. Taking this route is like a step in the direction of taxing any corporation in any country because an American owns stock in that company or because the U.S. government just plain wants to. Other countries are sovereign nations that have their own people, laws, customs and taxes. If you do not like what is in the U.S. you should leave, right? Well that is just what these corporations did. They did not like the taxes here, so they incorporated elsewhere.
Corporations are treated like their own legal entities. If you want them in the U.S., then the U.S. needs to be attractive.
Cities have often times given special tax breaks to large companies in order to get a plant or whatever built in their city (Why do you think Dell is in Round Rock, TX instead of Austin?). The feds should do the same.
This is almost like saying that if I were to give up my U.S. citizenship and become a citizen somewhere else, then the U.S. should be able to come after me and tax me if I do any business with Americans.
Get a grip!
How about lowering taxes and making the tax code simpler, so theres not all these loopholes and thus no reason to have the offshort accounts
We keep hearing this argument, presumably from people who don't understand why the tax code is so unbelievable complicated.
I'll tell you why: because people benefit from that complication. Every complication was inserted after lobbying from the same people who pay a little less tax because of it. If you want to simplify the tax code, you have to start chipping away at all these special cases backed by huge, powerful constituencies.
Which, come to think of it, is exactly what Obama is doing.
True for domestic companies, but not for international companies.
The Netherlands: A Tax Haven for multinationals
Bringing new life to the tyranny of the majority....
Never go to sea with two chronometers; take one or three.
Yes let's not move on to the larger problem. Lets stay focused on What tim geithner did. Why solve real problems when we can rub political ones raw.
We can't allow any politically questionable people to do any important jobs.
Felons should not be allowed to vote. etc...
Some drink at the fountain of knowledge. Others just gargle.
Your chart also says that the US corporate rate is nearly 40%, but TFA says that Obama said: "The administration also estimated that US companies paid an effective tax rate of just 2.3 per cent on the $700bn they earned in foreign profits in 2004."
Hence, the 'stated' rate is obviously not what is eventually 'realized'.
Who do you suppose lobbied for and were given all those tax breaks and loopholes? Mom & Pop's Bike Repair? Wasn't me. How about you?
If you want your life to be different, live it differently.
Supermajority? (or damn close)
What? Are you kidding?
Dude, if any country in the next 10 years lets you keep 10% of what you earn, they'll be bombed and invaded for being a tax haven and refusing to pay their 'fair share' if Obama has his way.
Send your spendthrift head of state this
I block the Politics section for a reason
But Slashdot seems more and more obsessed with ramming the Politics section down everyone's throats.
First I had to block the Your Rights Online section because it morphed into Your Rights COMMA On-Line.
Then Science, because Slashdot turned it into a Creationists/Stem Cell debate section
Now, 3 stories in the last few weeks have leaked out of Politics (where they rightly belong) and on to the front page/News
Dear Self-Important Editors:
You (yeah you) created sections and the ability to block sections for a reason.
Maybe you should show some self-restraint and put you Damn Fucking soap boxes back in their proper sections.
I and many others have no desire to be subjected to stories, the main point of which seems to be running screeds on how "Jews control the GOP" or how "Ron Paul was right".
Your inability to observe the standards of conduct you yourself created shows an utter lack of class.
Maybe corporations that are actually on the ground in the Netherlands pay these costs. I suspect many corporations only keep their paperwork there.
I find myself terribly amused by this account of the Dutch welfare state. Far from being "socialistic", it appears to be motivated by a Lutheran "everybody for everybody" ethic.
And parts of it seem positively whimsical. You guys get "vakantiegeld" (vacation money) every May? Even if you're unemployed? Maybe a good idea, but it still makes me laugh.
Why are you so excited about raising the government's revenue. Any of you think this 'trickle-down economics' is gonna drop any 100 dollar bills in your pockets?
Send your spendthrift head of state this
Just to play devil's advocate here, assume Proctor and Gamble (they make Tide detergent and Pampers, etc) makes 50% of it's sales outside the U.S. This is bulky stuff that is actually made in the foreign country and sold in the foreign country because long distance transportation costs would be prohibitive. Other than the paper fact that the parent company is incorporated in the U.S., what is the U.S. tax policy interest in taxing those foreign subsidiary operations?
I own stock in P&G and I certainly don't expect to get taxed on P&G's income unless it pays me a dividend.
If you think deeply enough, you will have no single direction for your outrage.
2.3% is too much tax to be paying in the first place. Corporation shouldn't be paying ANY taxes, as it just turns into income anyway which then ends up getting taxed again = double taxation. If Obama expects to raise hundreds of billions from a tax crackdown the long-term consequences will simply be more effective means-- likely including relocating firms out of the US entirely so we don't see any tax money from them at all, corporate or income. Why would any politician try to raise taxes in this economy??? Cut the damn spending, idiots.
"I Don't Have Enough Faith to be an Atheist"
Mod parent up. Yes, it's true: Dutch companies pay plenty, but international companies can route their funds via the Netherlands and gain quite a tax break.
Luckily this is also against EU law and should be over soon. Good riddance.
This sig is intentionally left blank
Inherent in that argument is that maximizing revenue is desirable for the government. Perhaps that is true in a time of war, but government is not a business, minimization, not maximization should be it's goal imo.
Corps: Ya know, we're about done, time to retire. We'll close up shop, fire everyone, and leave.
More OT: how about we start by replacing congresscritter pensions with the same damn social (in)security that everyone else gets?
In Liberty, Rene
Taxes? The real problem is the divisive concept of 'countries', the lines on maps that divide people.
IIRC, WI corp. tax is ~ 7.9 or 8 percent. IL corp. tax is 7.3 (for now...we'll see what happens when Gov. Quinn's budget and funding proposals finish going through the General Assembly sausage machine.) That's before Mayor Daley and his buddies sweeten the deal with TIFs and such. So, yes, they'd be getting a little bit of a boost by playing tax rate arbitrage here.
In the big picture, though, you're right; it seems hard to believe on first read, doesn't it? Illinois truly is Bizarro State in many ways; its hard to think of it as business competitive in any capacity...
Will never happen given the lobbying by the corporations and the wealthy PLUS probably more han 1/2 those in Congress who write and vote on this bill are already using tax havens.
Dr. Frank J. Nagy Fermilab Computing Division Authentication and Directory Services Group
No, the tax rate for holdings and companies is about the same as for other European countries; check out the figure.
The only country that is not a 'tax haven' by this criterion is Japan.
Good grief! Looking at the rest of these comments akin to "let the corporations shaft everyone else or they'll all pack up and leave," this was almost on-topic!
Lube or we sell indeed.
Resistance is futile. Reactance buggers it up.
> It hasn't seemed to work too well for the last several rounds of tax cuts.
Oh? Go look at the revenue figures, they disagree. Every time tax rates get cut revenue rises. Every time, The problem is that spending has gone up faster, thus deficits.
> Certainly there is a point where lowering taxes reduces total revenue.
Yes, that is the basic logic of the Laffer Curve. However our taxes are so punishingly high we could cut them a lot before getting near the good side of the curve. The logic of the Laffer Curve is so compelling that it is remarkable that we haven't made a serious effort to get on the good side of it. I mean it should be self evident that there exists a point on the tax curve on the flip side of the Curve where the government would bring in the exact same revenue yet the economy would be much larger than now, and where if new revenue were needed a tax increase would actually bring in additional revenue as expected.
However Mr. Obama gave away the game back in the debates didn't he. He, being the King of the Idiots and one of the few dumb enough to speak the truth on the matter, actually said he favors raising the capital gains tax in the full knowledge that it will decrease revenue but increase some nebulous commie notion of 'fairness.' Of course the media have taken pains to put that mistake down the memory hole.
Democrat delenda est
Standard joke about economists: ask two economists a question. You'll get three answers.
Those who can, do. Those who can't, sue.
Set up the tax system for business based on two things. Tax how much of their company they have in the U.S. (the portion of their company that is in the U.S. uses our infrastructure and government to its benefit), and tax how much profit they make from the U.S. (you are making money off our people and country so we get to tax that). Do that, and that's the end of any tax loop holes. If they aren't in our country or make money from our country we don't care.
Party at O'zorgnax's Pub! Buy me a Slurmtini aye?
Pedantic (adjective):
1. ostentatious in one's learning.
2. overly concerned with minute details or formalisms, esp. in teaching.
Ah the irony of def. #1...
One: The Congressional Budget Office issued a report to that effect in 2005 (when the US federal government was entirely Republican-run). http://www.cbo.gov/ftpdocs/69xx/doc6908/12-01-10PercentTaxCut.pdf
Two: Nobel prize laureate James Tobin, for another. In 1992 he wrote that "[t]he 'Laffer Curve' idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981."
And three, economist Paul Pecorino calculated in 1995 that peak revenue was generated at a tax rate of around 65%, much higher than current tax rates in the US.
...a lot of these companies are publicly traded, which means that the public already own a share directly (e.g. stocks) or indirectly (e.g. mutual or pension funds). So, Obama is going to force them to pay more taxes for overseas operation hoping somehow that jobs will reappear in the US. Even if this works, it will hurt the people who own the stocks because profitability and thus stock price will drop. Obama should consider the total impact, and not just one side of the equation. It can be easily be construed that his hidden agenda is really to expand his socialistic agenda by further increasing government control, and the tax haven argument is just an excuse.
I see. So by your logic, if there were no taxes, there wouldn't be any profits made either, as "people" wouldn't have to pay those too, as those poor "businesses" would feel morally obliged not to make people pay more than the product is worth.
How I hate idiotically reductionist arguments.
So yes, I do think businesses pay taxes, as they would just reap even higher profits, with most of the profits going to those select few that own stock already (which is a pretty small and rich group already, as they wouldn't stock otherwise).
OTOH, and what you're ignoring in your silly presentation, imagine how few people would be able to afford anything if government wouldn't be doing any of the tasks that it is. Hardly any trade going on between places, as nobody would be able to afford the initial investment in a "national" road scheme, no utilities (same reason), no education (as it's not in the short term interest of the corporate state+would lower dividends, also because the bureaucracy that would be needed to administer everything wouldn't exist), most of the population pretty much imprisoned in their homes, (as they wouldn't be able to afford the toll fees on the private roads,) no big corporations (because of all the petty squabbles going on).
Yes, I can see how your state would work.
Private citizens would never be able to pay for all that, all the profits would go to a tiny upper class where the wealth would be concentrated more and more (because they wouldn't have to pay any taxes at all), and after 30 years you're back in feudal Europe, (one might argue this was already going on before the credit crisis happened). Not taxing the part of the population that has the capability to invest in these "shares", (considering how few people are actually able to be part of this class you'd be talking about an every-shrinking group) thus making sure there is a tax-exempt class in society, is discriminatory, and more importantly, patently foolish, as it will only get you enormous amounts of resentment, and an October revolution.
Politicians hardly tax businesses at all in the USA (corporate taxation amounts for less than 25% of income tax, whereas in Europe they pay at least double that %age), as that is where their bread is buttered.
What's so disturbing is that you're turning this around 180 degrees to say that they're already "over-taxed", and should be paying even less. Businesses should pay taxes, as shareholders don't deserve the dividends they're getting for free, where those who need to work to get food for their family (and no, McD food doesn't count) have to give up a far higher proportion of their (in)disposable income to the government so that shareholders get to pay less.
These companies should be issued fines and charged interest on the taxes that they owe. Its ridiculous that people go to jail for this crap and CEOs have no threat of prosecution.
How about giving us a citation for where or when Obama ever said anything even remotely similar to that. Either that, or stop making shit up.
Just tax revenue and not "profit". Profit is a number that the company can easily manipulate. Revenue is a bit harder to manipulate, so a tax rate on revenue would raise sufficient amount of taxes.
Economists and politicians were arguing about this in the 1970's, when the US tax rate was 70%. Read up on the Laffer curve.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
Most economists agree, 60% maximum tax rate is the high point of the Laffer curve. Even the lowest estimate puts it at 35%. Lower it any more, and the government is losing money. With all the loopholes, our effective tax rate is around 10% of GDP. The government would make more money by raising taxes, there is absolutely no doubt. Look at any recent studies, you can find dozens of them on the wiki page for 'laffer curve.'
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
> Want to be a Cayman corporation? Then move your ass to the Cayman Islands, along with your entire family.
You might yourself suprised by the results if you yell that loudly enough. If I were the CEO of generic mega corp I might just ask myself why not? The Caymen Islands are nice and if they get crowded just go in with a few fellow CEOs, buy out some small country and rename it Galt's Gulch.
They are rich, remember? Flying back to NY every month or so to catch the Opera or whatnot isn't a problem. Just buy a 747 and offer cheap rides for the midlevel staffers you relocated and life would be good and mostly tax free. What you guys forget is the price to remain here in the US must be kept below the price of moving or people will just vote with their feet. Lose a quarter of the filthy rich and our top heavy 'soak the rich' taxation model falls apart.
Democrat delenda est
From IBM's Unusual Buyback Has Overseas Twist: The repurchases were executed through IBM International Group, a wholly-owned subsidiary based in the Netherlands, with $1 billion in cash and $11.5 billion borrowed through a loan agreement with several financial institutions. The principal and interest on the loan will be paid with cash generated by IBM International Group's non-U.S. operating subsidiaries. Company officials stressed that the repurchases are part of the $15 billion authorization for the company's stock repurchase program approved by IBM's board of directors on April 24.
Check your facts, the Bush tax cuts increased government revenue. Bush and Congress just raised spending faster.
I haven't read the proposal and I don't know the details. But I like the idea of closing the offshore tax havens.
It is hard for me to believe this is even controversial. If a company wants the benefits of US markets, then it should pay the full price of access.
As a small biz owner, I get none of the tax loopholes and I don't find the burden so damn awful. When I want to bring out a new product, then I fund it without government help (I doubt we qualify and I don't need the distraction).
All of you who moan this will just raise prices have it wrong. Put another way, why should we subsidize big companies? You will pay no matter what, and the sale price should accurately reflect the production cost.
I would like to see a comprehensive tax overhaul, but this sounds like a good first step.
The best solution I've ever heard to the tax problem in general is to eliminate corporate income taxes completely. Then close every last loophole in the personal income tax code. No more writing off cars as business expenses for personal use, or houses, or swimming pools. Either it's owned by the corporation or it's owned by an individual who happens to work for a corporation. If a CEO rewards himself with a new car that's paid for by the company, then he pays income taxes on that. This type of tax structure would cut down on abuses of the tax code by the very wealthy while at the same time encouraging companies to invest money back into themselves. In other words corporations would have an incentive to do something useful with their money rather, helping the national economy, rather than hiding it off-shore.
Not only would this scheme promote businesses right here in the US, it would even out the tax disparity between the extremes of personal income levels.
Sadly it will never happen. Not in a million years.
The US has the second highest corporate tax in the world, maybe if they lower it, US companies wouldnt have to look offshore to get some relief... this would also help keeping US jobs in the US.
Thanks to file sharing, I purchase more CDs
Thanks to the RIAA, I buy them used...
Always the same rethoric, dont be too harsh on the corporation or they will leave with the jobs.
I highly doubt a company can move out and all the critical employe would follow.
(or that building in the cayman island would need to grow exponentialy)
And then they start the same arguments in the new country, dont tax us or we'll move to china, brazil etc.. until only the middle class end up paying for it all.
So they playing fear from all side, If we call the bluff, the trick is to impose faire due. And the company will decide if its worth to move out, lose employe, lose market, lose goodwill, rebuild.
You can be sure if a company located here move to another acountry because they dont want to pay their fair part.. I, and many other, would make sure to not do business with them.
Another note, closing the tax loophole isnt preventing company to offshore to lower wage country. They can pay tax on profit and still offshore manufacturing to increase that profit.
Just because a company has a foreign office and accounts doesn't make them exempt from US tax - all they are doing is trying to shelter the income from OUTSIDE the US using EXISTING and LEGAL means. Don't hold the companies responsible for what obviously amounts to the political issue at hand. Obama can go ahead and change the law, and see how positive the economy reacts (that last bit was tongue and cheek BTW).
Do you really want to have the same living conditions as the average factory worker in Thailand?
If yes, by all means, live the dream of the free market. If no, raise tariffs so you can continue to afford running water and electricity.
If you think you will be immune to outsourcing forever, you may want to bury your head a little deeper in the sand.
The ability to sell the exact same item millions of times negates any right to complain. It's one of the reasons I write software... low operating overhead.
I posit that that point is lower for entities like a corporation. They can move their headquarters to another country at will when it is more profitable to avoid taxes.
And if this legislation passes, that will require them to actually, you know, move their HQ. I don't forsee them moving 1000 employees to bermuda because taxes are lower, especially if they still get taxed the same.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
If you keep insisting that corporations don't deserve all of their tax breaks and special treatment by the government, the really greedy ones may be put out of business. Then, the network of Fortune 1000 CEOs might make less money, and they might have to actually work, or not even receive hundreds of millions of dollars in bonuses when their businesses are failing.
This may lead to the end of large, bureaucratic, inefficient mega corporations which exploit people and resources for short term profit, using monopoly tactics and sleazy practices like bribing politicians or using tax havens or ripping off their customers. You might end up with unions, four week vacations, the right to health care, and a lower poverty rate!
You fell for it! Bravo, douchebag.
I dispute the premise that maximizing tax revenue is a legitimate function of government.
120 characters isn't enough to explain it.
Corporations can pay taxes too. All I can say is "hello transactional tax" and hopefully (but not likely) goodbye to many other taxes. You can't dodge a transactional tax unless you cease doing business in a country. Considering this would ruin most companies, not having transactions in the US, it would remove any incentive to move headquarters overseas. In actuality every country is slowly going to move towards a transactional tax anyway to stop the, shall we say less than positive intimations (read: Blackmail), companies try to pull now. The funny thing is while the US has a higher tax rate, it has a lower collected rate than most countries.
The plus here is that corporations are the ones that are going to f*ck themselves over. You see they need, and I mean NEED, the government. Yes, the same ebil gubbermint they complain about. China isn't exactly a haven for Intellectual Property (i.e. rampant theft), other countries can't project power to defend the corporations various holdings, other countries lack the legal mechanisms for corporate defense, et al. That's why corporations raise the hew and cry often, but do very little but lobby.
The right keeps using the words "Socialist", "Marxist", and "Fascist" to describe Obama. Those words do not mean what they mean think they mean. I mean, really, Obama is a _______ (fill in the blank)? Obviously the right has ZERO idea of how center-right Obama really is. Heck, in any "Socialist" country, Obama would be seen as a right-winger. Fascist? Yeah, right, let me know what the previous President's wonderful record on the Bill of Rights was, in particular the 4th amendment. Marxist? Puh-lease, let me know when Obama pulls a Reagan and sends troops in somewhere over a labor dispute.
Just goes to show you what a lack of perspective nets people.
End all tax "credits" and "exemptions" (including EITC and Mortgage tax credits) and government handouts to corporations. After 5 years of paying off debt, lower the marginal rate. Remember, no exemptions at all. This would sting at first, in fact it would have to be phased in, but then the country would have a tax system that is as "fair" as taxes can be.
People say the road to hell is paved with good intentions. Why? Is there any shortage of bad ones?
since I'm absolutely sure this is not nearly the biggest scam in the world, by far.
"Why do you look at the speck of sawdust in your brother's eye and pay no attention to the plank in your own eye?"
A lot of that answer is depending on who's measuring "better", obviously. But there's a lot of little effects that are hard to measure in reality, even decades after the fact.
The World Wide Web is dying. Soon, we shall have only the Internet.
The progressive mindset is taking over in the USA, and we are well and truly hosed. The class warfare propaganda worked like a charm.
I'm not quite ready to throw in the towel. There were some very hopeful developments in the last election cycle, the main one being that thousands of people now know what the Federal Reserve is, who owns it, and why it inflates the currency.
The key difference between today and the 1930s is that during the first Great Depression, there was little if any way for dissidents to reach the public to contradict FDR's propaganda blitz. Today, the networks and the major newspapers aren't the only way for us to find out what's happening.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
...but this one surprises me. I'm not even going to try to guess how this will play out and I am not seriously suggesting that Obama will die in office for any cause, but making rich and powerful people upset is certainly a way to do that.
This does not "undo" the disappointment I feel with Obama's broken promises (which I don't care to enumerate) but it certainly does confuse me a bit. One thing that would confuse me more is for Obama to start his healthcare campaign with new rules for the FDA that are more in-line with other countries banning the use of aspartame and high fructose corn syrup, legalizing sweetleaf and banning the common practices of dairy farmer industrialists. (Weird concept, I know, but by putting less crap into people, you should get fewer illnesses and such.)
The more you tax corporations, the higher the prices.
I think you probably couldn't name 3.
Most studies of hard economics relating to tax policy point out that we're substantially below the "optimal rate". Most estimations put that between 40% and 50%.
Papers that draw this conclusion, or at least have suggestions in this direction include:
Mirrlees, 1978
Seade, 1977
Tuomala, 1990
Sandmo, 1977
Wilson, 1993
Ballard and Fullerton, 1992
Dhalby, 1998
Stern, 1976
Piketty, 1997
Roberts, 2000
Atkinson, 1990
Kanbur, 1994
However, most are also very clear in stating that optimizing revenue is NOT necessarily the best rate. It is important to weigh social needs and competitiveness with alternative locales, population happiness, etc.
Most of the world has adopted top marginal rates just below 50%. The US was in that category until the 1980s. Upon reducing that rate, the US began leading all industrialized countries in terms of deficit-to-GDP ratios. While most economists point out that this is likely a combined result of increased spending, rather than tax cuts)... however, tax cuts that occur below the 35% range have never really been shown to increase revenue... In fact, most models suggest the opposite.
If you can cite ANY papers that have specifically defined models that account for opportunity costs, economic elasticity and a cohesive mathematical model, please point them out as I'm not aware of anything in that camp isn't ideological punditry from the Cato Institute or the Heritage Foundation or other similar politically motivated organizations.
Thanks!
You'd be wrong. Corporations, especially very large ones, build up entire legal teams and management structures to deal with the legal systems of their native country. Not to mention the infrastructure, i.e. office buildings and IT. Do you really think it's trivial to pull up stakes and move, when hundreds if not thousands of your employees have expertise in the legal system they're in right now and none of them have comparable expertise in any other system? When the building that houses those people would cost a hundred million dollars to recreate in another country? When relocating all of the IT hardware to the new building would shut down the entire operations of the company for a month or more? Even if you buy all new hardware for the new building (at yet another crazy capital investment cost), the downtime while shifting over can't be cut to less than weeks.
You've got it backwards; it's easier for an entity like a person to move to another country than it ever is for a large corporation.
Your comment is SOOOO lame, dude!
All taxes "punish success", and while that "punishment" might be enough to make *some* people give up entirely on trying to succeed, there will be others who will fill the vacuum.
What you said is clearly pointed out by most economists in studies on these topics...
BUT, the standard party line of reducing taxes is that "cut taxes to increase revenue".
It is frankly, based on nothing but hot air and/or lies and most serious economic studies have found little to no room for quibbles in that.
I'm not sure I understand the position being put forth by a number of people here, which I'll paraphrase as: "Corporations will have to charge more/cut back in order to afford this tax." But this is a tax on corporate profits, not on overall revenue. This would predominately affect things like dividend distributions, as opposed to product costs. Whether this is a good or a bad thing is separate, but it seems like we shouldn't be confusing the issues.
...and you must be one of the few native Americans that French and British soldiers (later known as US Army) didn't kill, right?
"Microsoft joined 200 companies who signed a letter complaining that the proposed tax changes would put them at a disadvantage with their rivals..."
Um, just what non-US rivals is Microsoft worried about here?
Most estimations put that between 40% and 50%.
Sorry, That should read "between 40% and 80%".
As it was stated clearly, these may not be ideal rates, but the claim of cutting already low tax rates somehow increases revenue just isn't true.
In order for it to be true, rates have to be high enough that people have substantially strong incentive to say "I'm not going to work up to my capability because my taxes are so high".
That just doesn't happen when the marginal rates are below 35%.
Big businesses employ big numbers of people.
Most people work for small companies.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
You are correct, given your example that wouldn't be more profitable. However, some country will always be cheaper.
You are also correct they wouldn't move the employees. They would just hire the cheaper ones elsewhere.
Never go to sea with two chronometers; take one or three.
... just maybe, because that is what everybody else was talking about?
Score:+1, OH SNAP
Hey, I hate paying taxes too (I pay more in taxes than my salary was when I started my current job). But, I also love all this free street light and the paved roads and not worrying about corrupt magistrates busting my door down and raping my family and demanding bribes.
You want to see what it's like living in a country with low taxes and weak government, vacation in the 3rd world.
I swear to God...I swear to God! That is NOT how you treat your human!
You are correct, given your example that wouldn't be more profitable. However, some country will always be cheaper.
I'd like to see a multinational do that - you make it sound like they can just hire a bunch of people in cheap country #1 (like everyone else will be doing) and train them. They can't even outsource software, so this would crater in a most disastrous way.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
Name ten more.
A unique way to learn a language: http://languageloom.com
I am a Democrat, and while I think the Mike Huckabee is a complete idiot on the great majority of his stances, I think his income tax abolishment and consumption tax proposal has great merit.
All we need to do is increase the state sales tax rate by the amount of the consumption tax. Then, the state can make tax payments to the federal government. No more income tax. Take a tax whenever money is exchanged for goods or services.
This means that we get all of the tax revenue when illegally acquired revenue gets spent. We also get federal tax revenue from visiting tourists. We also (finally) get the federal tax revenue from churches when they spend money. It also means that people who save (and not spend) actually get an immediate benefit by investing/saving.
Taxing income is moronic. There's too many ways to dodge it, too many ways to loophole it, too many ways to deduct it, too many ways to make exceptions.
Make it fair for everyone. Charge federal tax at the cash register.
President Obama's recent statements are simply following through with what he has said before the election: it's how he's going to be paying for his programs. His line about the Cayman Islands building in particular is almost a word-for-word repeat of something he said in a 2007 debate. He's paying for the programs he's implementing, in a Tax 'n Spend manner. Statements like these have already been priced into the stock market, and are a major reason that the Dow Jones dropped almost 1000 points over the two days after Obama was elected president (Nov. 5-6). (Perhaps relevant, the Dow has not since regained the level it was at on Nov. 4) While not a good thing for the U.S. corporations who benefit from tax loopholes, this latest statement is nothing new, and very expected.
[[Citation Needed]]
And why not do that to the person that made the original assertion? Is it that you don't really care for a citation, but that you want to attack an idea without having to actually state your opinion? That's the coward's way. "Citation needed" in an argument is a useless prick that is too much a pussy to state what he personally believes, but insult others in a way they think won't make them personally responsible. Unless you post that to both sides (and the other side posted first) then you are an intellectually dishonest coward.
Learn to love Alaska
Oh? Go look at the revenue figures, they disagree. Every time tax rates get cut revenue rises. Every time,
Where are the figures? Lets compare every year and whether there were cuts and what the revenue did. And comparing just cuts to the previous years doesn't work, we also have to compare increases. Where is a place where the tax percent change and change in revenue is correlated in a nice spreadsheet for every year we have numbers? I'd love to look at the numbers, but they aren't presented in ways that are easy to read. So please, lets look at them. Where did you look at them before you posted this assertion? I would love to see for myself.
Learn to love Alaska
I actually know a bit about the Laffer Curve, as I breifly studied under Ben Stein. It is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.
There are either a lot of Republicans on Slashdot or articles like this bring them out of the woodwork. I wish we could leave rabid political ideology out of tech and debate the issues on their merits. Party politics bring out the worst in people. It's almost as bad as religion.
So what you're saying is if the nasty government doesn't let the poor businesses alone then the economy might just get worse! And it would be all the gov's fault for trying to make them play by those totally unfair rules!
This is a pervasive problem. Individual corporations dispatch their lobbyests, who go to government and say "we might have to move," "we might have to lay off workers," and then politicians are all to eager to help them out by giving them a gift of tax breaks or a pass to violate whatever other rules are costing them a few bucks. And as soon as one company manages to get something by threatening the government, then others do too. Because they'd have no choice but to close down! It would be shame if all those people lost their jobs! And so the government caves in, again and again.
Making everyone play by the same rules is the only way to make this shit go away.
The state certainly isn't going to grant ME a personal exception on paying taxes if I threaten to move somewhere else. Why should corporations get away with that garbage?
Let's have zero corporate tax. No more depreciation schedules. No more 200 page tax returns that take all year to prepare. The income that is passed on to shareholders can be taxed at regular personal rates. Money that is reinvested is reinvested. Yah!
Let's end double taxation and make the U.S.A. the most popular place to incorporate. European companies will buy or build even more facilities in the U.S.A. and employ more people.
One of my rules is : Only a fool would trust legal advice from slashdot.
Now I have a new one : Only a fool would trust economic advice from slashdot.
For all those predicting total economic disaster if corporate tax rates increase (and explaining that all these corporations must locate to the Caymans because the cost of compliance is just unendurable), note some stats from an article in The Nation from 2003:
"Currently, the top marginal tax rate is 38.6 percent, scheduled to drop to 35 percent by 2006. ... The top marginal rate was: ...neither historical period is noted for the flight of corporations from the US.
91 percent to and through the Eisenhower years, indeed continuing up to 1964;
70 percent from 1965 to 1981; 50 percent from 1982 through 1986 (for the first Reagan Administration)."
One of the three was hoping for the tax liability to expire beyond the normal collection point.
Sorry, but there are so called elite of the crop and if they can't do their taxes right it either means...
a) the tax code is too convoluted for even experts
b) they are dishonest
c) all of the above.
I guess we can thank Obama for at least identifying scoundrels in his Administration, the problem is he still allowed them in. Congress gave them a pass which isn't saying much for that group either.
I welcome the IRS to check my numbers. I know I am honest. I also know that it is right. You have to figure that not only do these guys know better but many probably had help filing. It doesn't wash.
I would love the IRS to be required to go over in detail ALL members of Congress EACH YEAR. They should be subject to the utmost scrutiny at all times. However just like Presidents too many adopt an elitist "nobility" attitude that they are too good to be closely examined. After all, it is they who protect us and therefor deserve the latitude.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
"US Treasury Secretary Timothy Geithner has said the package of proposals 'would bring balance to our tax code.'"
of the Iraq war? 650 billion is the estimate for Iraq... Obama blew by that in just two bills and that doesn't include his budget.
Why not apply the same criteria to unsustainable social spending? Or should I say fraudulent and wasteful spending?
I was actually hoping Obama would hold Congress to his ideal of no earmarks. The problem was he redefined the word. The guy is a fraud and his budget and Congress's delight in his willingness to spend will put us in a ditch that even Bush couldn't have dreamed of digging.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
They claim it will cause higher prices and more unemployment? GET REAL. The spoiled brat answer to having to pay their fair share of taxes is to make less money so they can pay less taxes? When they are done with their threats of throwing a tantrum, the real world suggests they will continue trying to maximize their profits and increasing their bonuses. Companies still believe in the notion that if they aren't growing, then they are dying. Ignoring the fact that they exist on a finite world and the fact that nearly everything has a saturation point, they aren't about to willingly make less money because they suddenly have to budget taxes into their plans.
Oh, please. You are aware that the vast majority of Americans have only had their taxes cut since he took office, right?
Contrary to a lot of /.ers, most people actually leave their basement and enjoy being near friends and family. The truly rich already have homes or condos in foreign countries, but they make the U.S. their home because it's where almost everything and everyone they know lives.
Ive got a better idea... Why don't we keep our own money until the Federal Government can prove that actually knows how to manage spending. While 65% MIGHT be optimal for the government, according to only one economist, that is still confiscatory.
Plus do you really think the US lives in a vacuum? It would only be a matter of time before other countries would start vetting our wealthy and solicit tax breaks for re-locating.
You have Linux, BSD, and even Solaris now to choose from and build a local software industry around or you can keep buying Windows and pumping money out of your country.
Microsoft employs 41,000 in and around Redmond - but over half of its employees are resident abroad and over half of its revenues are generated abroad.
It is not a one-way street.
Microsoft is building a $300 million dollar research campus in Bejiing.
That single facility will have twice the employees of Red Hat. Red Hat's entire physical plant is valued at $68 million. Balance Sheet
When the geek talks about a "local" software industry what he is really talking about is protectionism.
Within this tightly confined space the developer doesn't need to produce a quality product - and he almost certainly won't be producing an export product.
That's way too much work when he can live quite comfortably - if a little more modestly - simply by satisfying the politician's demands for local staffing and content.
Go to wikipedia and look it up if you haven't.
We have farm subsides primarily as a result of the soil conservation movements that cured the dustbowl.
Numerous times, clouds of dust the size of several states roamed all the way to the east cost. Taking with them, all of the top soil from the midwest. This was on top of a very long drought.
As soon as we implemented soil conservation, the dust storms stopped and the rain came back. Had we not done that, it's very likely the US would have faced a famine.
So, the next time you eat something, be glad that we have farm subsides. Without them, it's unlikely that your parents would have been able to feed you.
Before:
Category - US Jobs - Offshore jobs
Salary - High - Low
Taxes - High - Low
Total - High - Low
--
After new taxes:
Category - US Jobs - Offshore jobs
Salary - High - Low
Taxes - High - High
--
Total - High - Higher (but still not as high as the US column, still competitive)
Sorry,
Off-shoring is still cheaper, therefore it will still be done. Now, the heads of the departments which do the off-shoring to save money will be moved over-seas and the local company will be spun off into it's own entity and the contract will be between two separate companies rather than one manager here and the workers elsewhere. The only thing that changes will be that high paying manager position will be moved offshore because it will be more cost effective both in the taxes and salary department. Good luck with that...
You forget, the innerwebs make moving information (value) very easy between separate companies in a myriad of countries.
Businesses _will_ find the lowest cost solution, you will not stop that short of nationalizing them. Barring that ::cough, Fannie, Freddy, cough:: You will just throw valuable, knowledge worker jobs to other countries because the salary will still be cheaper. If you want to build up other countries economies, great, but is that really what you want to do?
One Token Ring to Rule them All, One Search Engine to Find Them, One WAN to bring them in, and TCP/IP Bind them...
Oh? Go look at the revenue figures, they disagree. Every time tax rates get cut revenue rises. Every time, The problem is that spending has gone up faster, thus deficits.
I'm sorry, where is this?
Taking a year-for-year statistical analysis, the changes to the top marginal income tax rate are actually negatively correlated with GDP growth by a small amount (a=-0.03). They are also positively correlated with unemployment increases (a=0.33). Median income is ALSO slightly negatively correlated with tax cuts (a=-0.08).
All three primary factors of economic health have a NEGATIVE correlation with tax cuts.
There are a few isolated incidents (like the growth after the 1981 tax cuts). However there are plenty of counter examples. For example, GDP growth AND median income growth comparable to the early 1980s kicks off directly after the 1993 tax INCREASES.
According to statistical regression, tax cuts do very little to spur growth of any kind and with economics and statisticians pointing out that the Laffer curve of peak revenue occurs around 50%-60%, there is little gain (except personal gain for top earners) in decreasing it below the current 35-38%, and in my opinion, there are substantial social gains to decreasing deficits through increasing revenue.
I think your argument is mostly political bunk.
Prove me wrong without using isolated anecdotes.
Besides that government is only a means to an end, something many people forget all to often in this economic crisis...
I have to wonder what the growth rate of the economy would be at 65%? And I mean everyone at 65%, because I know they had above that rate "progressively" earlier last century. So what are the long term effects of that rate?
Would a lower rate bring in more long term? Or is high growth possible at the 65% end?
Everyone seems to think this is geared at the super rich, and super international companies. You are missing the point. It is aimed at every single American living outside the U.S.
I have run my own buisness outside the U.S. for years. I will spend hundreds of hours this year, as a sole propiator, reporting that I do not owe the U.S. goverment any money. That is currently. If you do not report all of your oversees accounts (even if you do not owe taxes), you are guilty of a crime with penalties starting at $50,000 US and up.
You are assumed to be guilty, just by living outside the United States. I have never taken a single tax deduction so far related to my overseas status. I don't make sufficient money for that, but I must report everything to the U.S. government even if the country I live in has laws protecting my privacy.
This new proposal will force banks and businesses around the World to report all Americans activities they do buisness with.This is not about taxes, this about monitoring Americans.
Living in Chile
Its forcing the large companies to start paying into the insurance fund that is government for their bailout money. It will be a real wake up call to these US companies that are not true US companies.
Companies already take into account corporate taxes when pricing their products/services; however, they price it at the theoretical tax level and not on the effective tax level. So in reality they can already pay the 39% corporate tax rate because it's already built into the prices. Yet they know that the effective rate tax rate, after all the "expenses" and loop holes, will be less 5% and they'll pocket the extra 34%.
US tax law is applied to the global earnings of US corporations. That means, a company that does business and has employees overseas still owes US taxes simply based upon having some corporate papers filed in the US (Delaware is starting to look a lot like the Cayman Islands). So if a company decides to incorporate overseas, the same rules apply. If the corporate papers are filed in Switzerland, Canada or the Cayman Islands, that's where it owes taxes.
The alternative would be to tax each corporation on the business it does within the borders of the USA. Cayman Islands based or not, pay taxes based upon the revenue collected or profits earned here. But be careful what you wish for. Because this means that US corporations will no longer owe taxes on earnings overseas (which they currently do).
Its quite possible that moving from a tax based upon the corporate location to one based upon the location of the earnings will end up costing the US quite a bit of revenue. And if the US tries to have it both ways, then other companies will retaliate and tax their companies US operations. That'll make those operations less economical, so they'll just shut down the plants here and do the work back home.
Have gnu, will travel.
Does that building bear any resemblance to a police box?
Businesses collect and pay all taxes on (products, services....) sales in the USA (no possible deductions, not even charity/nonprofit). Tax evasion, then send the CEO/CFO to jail, after a few years maybe.... Best of all private citizens no longer file annual federal taxes, and the IRS has an easier time collecting from the companies. The public/citizens still pay taxes, but no one can hide bullshit and lies about who pays taxes, citizens always pay taxes, all others/businesses are proxy tax collectors.
Unaccountable leaders are masters, and unrepresented people are slaves. How do US and EU fare?
Name ten more.
Sorry for only finding six; these are mostly economists with more prominent blogs. I'm sure someone who studies economics could find many more.
Note that there is a little debate here about the very top of the Reagan tax cuts, but I would consider that to be "some time ago".
The Laffer curve is just the mean value theorem from calculus with the two endpoints set at zero. Anybody claiming it is "nothing but hot air and/or lies" is an idiot, in denial of 300+ years of mathematics which are the foundation of our modern technology-based civilization.
The only quibble about it is whether we are above or below the point at which cutting taxes would increase revenue. I think most people would agree that most of our tax rates are well below this point (and thus lowering those rates would in fact decrease revenue). However, bear in mind that when the Laffer curve was first proposed, the top income tax bracket in the U.S. was ~70%, arguably well above that point.
Perhaps a better way to explain it is that sometimes cutting taxes lowers revenue, sometimes it increases revenue. Anyone who claims that cutting taxes always raises revenue is full of nothing but hot air and lies. But so is anyone who claims that cutting taxes always decreases revenue.
Sadly enough, he's right. Wisconsin is bad, and Milwaukee/Madison* are making a bad problem worse. If I ever start my business (after college) it sure as hell won't be in this state, which stinks because my family is here...
.... the police, schools, drugs, corrupt city officials, etc.
*At least Madison is able to pretend it has some semblance of a functional gov't. Milwaukee on the other hand,
Failure formatting five FAQs of financial facts.
The problem is nobody is talking about WHOSE revenue it is.
The Government should be working to increase the real GDP and not it's own revenue stream.
Remember that "for the people" part?
Who is stupid enough to believe that making US companies pay taxes for overseas revenue WHEN IN COMPETITION with other non-US companies that do not pay taxes for overseas revenue is a good idea, specially now?
Lol. If you believe that, I have a Republican party membership to sell you.
The real GDP is actually negatively correlated with tax rates by a small amount (-0.03).
This is a statistically insignificant number.
the real conclusion is that tax rates have NOTHING to do with real GDP growth.
The two periods of highest GDP growth in our nation's history took place when the top marginal tax rate was 91% and 70% respectively.
Jesus Christ, I knew a fucker who was renting a place with the infamous "plan 8" who had a better car than I and who went to the Caribbean on vacation twice a year.
For those who don't know, "plan 8" is a federal housing assistance program for families with low income...
Those are the loop holes that we need to close.
The "peak value" for the laffer curve is probably (according to most estimates) between 50% and 80%.
When our top marginal rate (1979) was at 70%, there was a real argument for the laffer curve having an effect in the event of tax reductions (although, as I have stated, real GDP growth actually has a small NEGATIVE correlation with tax rates)...
However, today with top marginal rates below 40%, there is very little support that lowering that rate increases the national revenue.
And with the negative GDP correlation and very real problem of deficits, I don't see a good argument for reducing that marginal rate, except to personally benefit the highest earners.
We also happened to be fighting WW2 at the time though ;)
It seems the Obama administration has been making a lot of noise about tax avoidance. Let's make one thing perfectly. Tax avoidance is perfectly legal. There is absolutely nothing wrong with minimizing the amount of taxes you owe. Tax evasion, however, is highly illegal. Stashing your profits in a secret off-shore bank account is tax evasion. Finding as many business write-offs as possible is tax avoidance. If a company is using legal loopholes, they have done nothing wrong. If you don't like the loopholes, change the damn law.
I do not like this trend. The Obama administration is purposely trying to make the term "tax avoidance" unpopular. A few years from now it could be conceivable that you will avoid telling anyone that Turbo Tax Ultra-Deduction Edition saved you an extra thousand bucks through business expense deductions you didn't know about, all because you don't want your friends and associates treating you like a leper.
IANAL, but I play one on the internet
-- Will program for bandwidth
You don't have to "earn" the right to be treated like a human being and a member of society. It's a duty of everyone to help with that.
To me, the best way to do that is to have 100% employment for everyone who wants to earn their keep WITHOUT working 2 or more jobs just to survive.
Until then, it will just be business as usual with chronic unemployment/underemployment of the masses and an ever widening gulf between the 'haves' and 'have nots' which, if unchecked, will likely lead to the destruction of affected civilizations.
Holy Mother of Godzilla, dood, what pharmaceuticals have you been imbibing? During WWII in Nazi Germany, stuffing people into ovens was "legal" - but amoral! During Idie Amin's reign, cannibalizing his ex-mistresses was "legal" but amoral! The Israeli treatment of Palestinians is "legal" - but amoral! The imprisoning of marijuana smokers is "legal" in America (and no, I've never taken any drugs, nor smoked, for that matter) - but amoral!
And colossal fraud on an unprecedented level has been "legalized" in America (along with usury - once highly illegal) - but it is amoral.
Dwell on this: 16 of the top banks in the USA are insolvent, yet those bankers and senior management affiliated with them became millionaires, billionaires, and in some cases, trillionaires -- now where do you suppose all that mulloh disappeared to???
A GAO study of American corporations found that between 1996 and 2000 61% of them paid NO taxes....and during the Bush administration that percentage went up considerably!
You win!
By making up your own meanings for a word you leap far ahead of those of us encumbered by the dictionary definition or by the requirement that anyone reading what we write have an idea of what we are writing about. I really do not understand why this is such a common behaviour in the USA. You are one among many now and it used to be a American left-wing academic trick to do so but I suppose it is now widespread. I'll leave you to your Yawl or Ebonics or whatever - because that definition you have fits no English dictionary I know of.
As far as I know, business taxes are based on profits, not on gross income. If hiring a new employee reduces gross profits, then the tax burden is likewise reduced. Increasing taxes does nothing to discourage hiring new employees or investment in business growth. If anything, I suspect it would encourage both -- If you were tax 100% of your profits, (and chose to remain in business,) you'd likely use any money above and beyond operating costs to expand the company. Doing so would reduce profit to nothing, and eliminate a lot of your tax burdens.
Small business likewise do not have to be affected. The owner can take money out of the company for his own uses in various ways. A relatively common one is for the owner to make himself or herself an employee of the company, taking a salary. Since the owners salary is now a business expense, business taxes are reduced at the cost of an increase in the owner's income tax. The owner would still be entitled to profits in doing so.
Big businesses employ big numbers of people.
I'll see your 'big numbers of people' and raise you, well, a ceo's bonus program.
big business is very hated. and its been building up. better watch out, all the built-up anger is going to go somewhere.
rich ceo's have been earning 400x (and more) than their workers. its obscene!
I have zero sympathy for any complaints by a big business in the US today. they have had to TOO good, and unjustly, for way too long.
we need balance! and those that claim they will take their ball and go home, I say - enjoy your trip. nature hates a vacuum and if you go, someone else WILL take your place. a nice reset - cool.
--
"It is now safe to switch off your computer."
The largest competitors for U.S. tech firms are U.S. tech firms, so that's a non-issue.
---the national debt climbed while taxes on the super rich and corporations declined. And every Republican President since, repeated this pattern; then Clinton came along, and left little Bush with a budget surplus, the first since WW2, which Bushie immediately squandered. And he reduced corporate taxes and taxes on the super rich, with no regard where money to run the country was coming from. BTW, Bush stole the money slated to fix and upgrade the New Orleans levees, stopping work in progress, and the levees failed. So we have now, thanks to Bush and the Republicans, the largest national debt ever, a huge part of that debt in Communist China's hands. That's right, we are in debt to the Communists- they have us by the short and curlies. Obama has to do something to pay off the debt, and have money to run the country, so closing tax loopholes is one part of the plan. He did, however, give a tax break to the middle class- the biggest one ever. So all those against Obama's plan to close corporate tax loopholes and end off shore tax havens- would you please post your plan on how to get this country out from under the debt that Bush dumped on Obama? if you have none, and nothing but lip flap, then sit down and shut up, and let a smart man fix this. A Black man, once again, is cleaning up the mess made by a rich, stupid, white man. History repeats itself.
Republican leadership = Idiocracy
Why do you believe corporations should have equal or more rights than a person? What statistical evidence have you read that proves to you that less corporate tax leads to a more productive and healthy society?
Begun, these tax wars have.
Of "love it or leave it" flag-waving Republicans fighting to not pay their fair share of taxes. So what if it all comes back to me the consumer? It's the principle that's being tested.
is to nominate all of them for Cabinet posts.
I agree with you, but this isn't much of an argument. Anyone could say the same thing to support their argument, and a lot of them would really believe it.
Here's some -isms for you...
I fear progressive authoritarianism operating under the guise of a liberal democracy. I fear those who would tear down our current society to enforce a raw democracy, guided by the "enlightened" elite, using propaganda via the media to steer the masses, creating a perception of "have-nots" so they can hate those that don't like where the system is taking us. Those that don't follow are run over; it's not a new concept, after all, these tactics have been around since "Philip Dru: Administrator", 1917.
We're being steered away from the republic, because a republic represents the freedom to get away from bad decisions made by others. "Why do we need an electoral congress when we can just let the people decide?" No... we have a democracy where you only need a majority to decide that someone else should pay for what you want, a fear that the Founding Fathers voiced often. There's a reason why they call it a progressive tax code, such that today 90% of the public pays 30% of the federal tax. Our "closing the loophoole" will end up chasing away the 10% that actually generates the cash for our society.
We have the media in league with the POTUS, in 100 days reporting favorable stories in a 2:1 ratio over the last president, yes 42% vs 20% favorably biased stories. And it's just not NBC or CNN... They steer the national conversations, and under the guise of entertainment (ComedyCentral, of Viacom, which lest we forget owned CBS up until 2006), they ridicule those that don't fall in line with their political ideology. John Stewart rips apart Cramer thanks to his NYSE executive brother, then falls back on "I'm just an entertainer" when his beliefs are cornered...
It's not socialism, no, because at least there they told you up front that the system was being run by the elite to forcefully equate the masses, except for those at the top of course. It's not fascism this time around either, because under fascism the corporations run the government, when today the government is itching to run the corporations (another $4.5 billion 1 hour ago). It's authoritarianism, chipping away our freedoms, our options, our future. Spending money they don't have today, telling us what we can't believe, then using the 1920's progressive tactics of criticising and ridiculing the non-believers.
I don't know about someone else's line, but my line for reducing taxes is restoring to me and my countrymen the right to earn and keep the fruits of our labors; not to essentially be forced into involuntary servitude ( that's a euphemism for slavery ) under the guise of "paying our fair share"
Wh47 d1d j00 541, 31337 15n't t3h r0xor5 ne m0r3???
When I argue for lower taxes, I want lower taxes because I want to keep my money and not give most of it to the government, and as a person empathetic to others, I want them to have that right too.
However, when we make the argument for lower taxes in the name of raising tax revenue, we are implicitly accepting the premise that bigger government spending more money is a good thing.
Wh47 d1d j00 541, 31337 15n't t3h r0xor5 ne m0r3???
This might well encourage companies to invest in R&D, or expanded operations, or anything else that looks unprofitable on paper but has impact far beyond the next quarter. Instead of paying out dividends and seeing 20% or 30% evaporate in the process, it may be better to keep profits down, provided the money is used wisely. In effect they are taxing themselves so someone else doesn't do it for them. If profits are only a few percent of revenue, it isn't too hard to post a small profit or loss by deliberately increasing expenses.
I am not arguing that this would be a bad thing, but I do not think it is the intended result. Worse, it might just serve to funnel MORE money to the people at the top, if they decide to spend on "human resources" (ie, themselves). As with so many things, care should be taken both before and after implementation to keep it from backfiring.
Mal-2
How is the Riemann zeta function like Trump rallies? Both have an endless number of trivial zeros.
could anybody think that was a "Troll"?? There sure are some weird modders on Slashdot.
Amazing how the language of the news carries it's own conclusions.
More amazing are the number of people on this board who wax eloquent about taxes without a clue of what they are talking about.
The foreign tax deferral has been around almost as long as the tax code - nearly 100 years. Foreign governments more often than not restrict cash repatriation in order to encourage more investment in their countries. The profits are taxed by those governments. Once repatriated, there are additional taxes rendered to the US Treasury. Frequently the operating entity must delay repatriation of offshore cash balances to fund operations there, and in so doing accomplishes a natural hedge against currency moves...not just for 'today', but for future viability. This is a long run strategy that makes sense - it is not a loophole or haven. The current law was put in place for a reason. Anyone who thinks it was put in place to 'screw other taxpayers' is an idiot. There are solid economic reasons for the deferral.
Obama wants to tax domestic corporations even if the cash is not repatriated. Then he says this is to encourage more domestic production. Except that he's raising taxes on landed manufacturers, as well. The National Association of Manufacturers is going nuts: if one wanted to design a tax code to destroy US manufacturing and the US economy, one could do no better than the Obama plan. This guy is truly dangerous.
Tax Avoision.
Utilizing the synergization of benchmark e-solutions to pre-workaround action items!
You want a better dependency ratio? Just stop those stupid "wars" against smoking and obesity while taxing tobacco and unhealthy stuff high enough to pay for the differences.
;) ).
A large proportion of nonsmokers eventually die of expensive diseases too (and this is way after their most productive years), and if they recover it just means they get another chance at another expensive disease.
So far all the stats I see that say smokers cost more (despite all the extra taxes they pay) appear to be rigged - they either assume that nonsmokers don't ever die, or other stupid stuff like taking the smoker's income and then multiply by X years of lifespan less and say that's the loss.
Don't ban smoking in restaurants and pubs. Just put higher taxes on establishments that want to allow smoking in their premises. You then don't lose a revenue source.
FWIW, I'm a nonsmoker, and I believe people shouldn't smoke - the disadvantages outweigh the benefits (to them personally). But if they insist, it can be good for the economy. Give their families a posthumous "Black Lung" award in recognition of their sacrifice (and maybe a free carton of cigs
Perhaps that is true in a time of war ...
I'd say that a time of 10 trillion dollar national debt also qualifies.
Sorry, why would the Cayman Islands cooperate with identifying companies that should be giving tax revenue to the US instead of... the Cayman Islands?
Minimizing revenue is a silly goal. It's trivially easy: stop collecting taxes. However, you're left with the choice, then, of unsupportable deficits or anarchy.
http://en.wikipedia.org/wiki/Pareto_efficient
Obama cited a building in the Cayman Islands where more than 18,000 US companies are housed: 'Either this is the biggest building in the world or it is the biggest tax scam in the world,' he said. 'I think the American people know which it is.'
Say goodbye to cheap Seagate hard drives.
Most of these replies show a profound lack of understanding of what corporate taxes are. I am not an accountant or lawyer, but I do own a couple of small companies. There are generally three kinds of taxes companies pay:
Payroll taxes - paid on top of what employees are paid.
Property & Inventory taxes - usually state level taxes that charge a percentage of the value of a company's real assets.
Corporate income tax - paid on the profits of the company. Here's the suck feature: your company generates a profit, your are taxed on it. The you pay a dividend, and the people who receive the dividend are taxed on that.
The tax we are really talking about is corporate income taxes. There is a situation where you simply don't have to pay taxes:
Don't have a profit. Don't pay any corporate income tax.
It's not that corporations aren't paying their "fair share" - it's just that we don't tax a corporation's revenues, we tax profits. Now, you as an individual have to pay taxes on your personal revenues. Our tax system is tuned to relieve individual citizens of their income.
So why the brouhaha about offshore subsidiaries? Because they look like a gold mine. It's fool's gold and will make a lot of people who think that taxes and justice go together feel good for about 10 minutes when we pass some sham law that does nothing. All that will happen is that companies will simply change how they do business, and ensure that they barely break even and will avoid corporate income tax anyway.
I for one really don't care much for our tax system. It makes good people into criminals too easily. It punishes success, while doing little to help the poor acquire wealth (which is how you make someone cease to be poor). Our byzantine tax system relies on voluntary compliance to a set of rules that make little or no sense and require years of litigation to clarify. It also costs a small fortune to manage and collect, a small fortune that could be used to do something productive, like provide free health care or even pay off the war bill.
Someone else suggested transactional taxes would really help, and I tend to agree. It's much harder to duck paying a sales tax, and the tax can be a lot smaller. How's 14% of that purchase sound compared to 38% of your income? Sounds good to me, and oh, being profitable would become a good thing again.
-- $G
If you don't know about this statute and how it operates, DO NOT claim to be an expert or authority on tax law!!! These cases hold 26 USC 83 applicable to all compensation paid for personal services -
Accorting to the Code with respects to the District of Columbia and those States of the union subject to Income from the territorial United States therefrom; NRA (8233), or pursuant confession (w8-ben) of a schedule anciliary to taxable 104NR activity (1041sk1) of Personal Services are ellected (8821) of the person
Regardless of the prior forms of entrance to the tax code, Section 83 has to do with liability to file for which personal services rendered as labor are property that is exempt from taxation. Have a nice day, without willful failure to file given this disclosure.
"I've got to own up to my mistake. Ultimately, it's important for this administration to send a message that there aren't two sets of rules -- you know, one for prominent people and one for ordinary folks who have to pay their taxes," Obama said on NBC's "Nightly News with Brian Williams."
There's nothing inconsistent about his position: Daschle, and Corporate CEOs alike aren't exempt from paying the same taxes everybody else does.
-The art of programming is the pursuit of absolute simplicity.
Small business hire a lot more people than big business, so go fuck yourself. Small businesses don't get to avoid taxes in this way. Fuck big business, they can all be destroyed, make way for small businesses.
Because it was earned OVERSEAS and LEGALLY SHELTERED. What Obama wants is to claim the 39.6% that US-based companies pay, and let you also pay the double-taxation (tax on profits made overseas, to the overseas country AND to the US government). And we're not talking about the additional 15% on distribution of what remains...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Right, so we are going to bomb Monaco which has NO INCOME TAX. And has has for a long time now.
This isn't about income tax.
They may need find Headquarter Havens. Now that the Unions and the Government are taking over the failing businesses, they are getting hungry, very, very hungry. The current administration is clearly anti-business and anti-rich, unless of course you are a rich politician or union member (entertainment, media, sports, etc). Back when the UK had a 99% tax bracket, the rich moved (rock stars, for example) and that could happen now in the USA.
The reason they are headquartered in the 'US', is so they can avoid having to pay import taxes and tariffs. If they have a way of being 'US companies', and not pay US income taxes, they get the best of both worlds.
There is no incentive for a normal US citizen to really want such a company here, it is just the corps playing games.
HA! I just wasted some of your bandwidth with a frivolous sig!
Of course Mightycorp will bellyache about their little scam of being able to make billions and not pay tax! Did you expect something else? Greed is greed! Making millions, sending the money overseas and not having to pay tax on it is the big business method of 'stuffing it in the mattress' or 'pushing it into the sock and hiding it under the bed'. I believe greedy companies will feel its their right not to pay taxes to the communities/countries where they made so healthy a set of profits. Its not right, but greed help them to sign. Also, it would be in violation of US law for them not to sign. US law states CXO's must do everything in their power to maximise returns to shareholders. A few years ago I saw the boss of a pharmaceutical company lie through his teeth while under oath before US congress. Its the American way.
I hear you'll keep 5% of what you earn and like it. Assuming your protein isn't given to the Hive. *rolls eyes* Yes, I'm getting tired of people making up stuff too. I don't even understand why they demonize as stupidly as the grandparent did.
Small business hire a lot more people than big business, so go fuck yourself. Small businesses don't get to avoid taxes in this way. Fuck big business, they can all be destroyed, make way for small businesses.
You will end up fucking yourself over. Reap what you sow. What happens to these small businesses when they consider expanding? You know, to fill a need? They won't and that need will go unanswered. It is utterly foolhardy to chase out of the state, not just the big businesses, but also any business that wishes to grow.
Lets hope he can somewhat fix this meticulously complex and over raped country. This is the first and only time I have ever respected a person in the government. He seems to me to be a real intelligent and humanist person.
I am very perceptive and I can tell a lot about a man by the way he speaks and carries himself. I knew Bushie was a typical sporto-hick-foreman's son-boss hog-J.R.Ewingwannabe-taker-taker-taker pretending to be a humble idiot cowboy the first time I saw him on TV and listened to the way he spoke when answering questions. This is a dick tater I thought.. but you all fell for his idiot charm for 8 years. This has been a rough decade for me and I have learned to hate this country after 9-11, not because of 9-11, but because of the ensuing religulous idiocy in the name of freedom that took over after. And now I see it too much but how do I leave? ;-)
I get the opposite from Obama. When I first heard him speak I heard a man who was humble but had a messianic flavor to his thoughtful way of articulating and explaining his positions on various subjects, who was educated, who was like someone I could bump into and chat with at work and learn something cool from. He sounded like a kind teacher who would let everyone out 20 minutes early. He sounded like the cool boss who would let you take a day off if he saw you were stressed out.... he also had leadership in his voice and if he asked me to do something I would do it because it sounds like his heart is in the right place: progress and compassion for everyone.
I know utopia is impossible just like perfection, but it is something we can get close to if we stop being so destructive and selfish and at least try to get there.
So will his changes work? Well with the best intentions I believe most of them will do a bit of good, and yes he will make some mistakes just like YOU and ME but in the end he is a more compassionate person than the republicans would like you to think. They enjoy their temper tantrums calling him a "facist" or a "socialist" as they try and be the richest a selfish cowboy reverend preacher they can be.
So here is your translation guide to new republican words:
Fascist = person who isn't you and yer paw or your cousin said is one too,
OR
someone who tells you if your being a selfish belligerent backwater ignorant asshole
Communist = someone who shares too much of something that is normally hoarded by more deserving people like you or your cousin
Socialist (humanist)= someone who cares about lots of people they don't actually know - and seriously tries to make their lives easier to live like those science loving pussies in Star Trek TNG or those douchebags in europe
Leftist = someone who isnt in your church, you know --- the one true church = yours
OR
someone who sees what things will be like in the future if we continue to be like this, and has decided to try new ways to do things to positively impact the future
It just seems to me that our country we cherish is in love with one thing only: profit
And to make profit, you have to be cut throat. You have to take take take. You have to find any way you can to exploit a resource. You have to dominate your market. You have to make things that eventually break. You have to demand that you have control over your customers. You need to sell them anything, and if it is addictive and short LIVED than you sell more!
But you see... LIFE is so short.
Call me a fucking communist, a democrat, a humanist, a leftist, a fool whatever because I know your just mad as hell that these are my simple wishes:
I really don't want these luxuries. I don't give a shit about your 10 bedroom home. I really don't give a shit about your other "assets" either. I want to be made to last.
I want to be able to afford medical care. I want to be able to get an education that feels like I'm learning something rather than I'm paying to memorize something quickly to be certified. I want to only consume what I need. I want
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Big businesses employ big numbers of people.
True statement, but the aggregate of people employed by big businesses is smaller than the aggregate of people employed by small busineses. Also, small businesses are less likely to have the time and resources to use offshore banks, although some do.
The part that should really concern people is that the President's proposal reverses the burden of proof on charges of tax evasion. If you're accused of hiding money in a tax haven, you have to prove that you're complying with the tax code rather than the government having to prove you broke the law.
Oh? Go look at the revenue figures, they disagree. Every time tax rates get cut revenue rises. Every time.
AK's not talking about the government's revenue, he's talking about his own. I noticed the same thing with mine!
You've got it backwards; it's easier for an entity like a person to move to another country than it ever is for a large corporation.
It could be true if your corporation is present only in one country. Even then there are known cases when large single-country corporations (Volvo, IIRC) told their government that "either you change the law or we are out of here" (the law was quickly changed.)
But I [still] work for a large corporation that has presence in tens of countries; in some it's small, but in other it's major - R&D, manufacturing, thousands of people, large buildings etc. Right now the corporation is going through the process of reduction of US-based workforce. Ultimately only people that *must* be in the USA will remain in the USA; the rest will be in Asia (mostly China and India, probably.) And why not? A transnational corporation has no particular loyalty to any specific country. Research is better done when there are many qualified researchers (and nobody will deny that China has tons of them, US-educated and such.) Manufacturing is *definitely* better done in Asia. So what is the reason to even keep facilities in the USA? The answer is, sales to US entities (and the government) and some technical support. Everything else is best done elsewhere, using foreign land and labor. Many US employees will be laid off, at great benefit to the profit and loss statement. The shift is already happening, and it is not revolutionary - it's just Chinese factories are increasing production whereas US-based plants are reducing hours, making fewer products and sending people packing, one by one until nobody is left. Then the buildings will be gutted of remaining equipment and then sold, and that's the end of it.
Also to offer comment on the theory that others presented - that US managers like to live in the USA. US managers like to be rich even more. And when the same amount of money that you need here to have a standard house buys you a palace and servants in Asia, the answer looks more and more obvious. With money they can live like kings anywhere; and do not forget that many rich US people despise Obama's financial policy, and some believe that such unlimited, drunken-sailor type, spending will only break the back of US dollar sooner than expected. When that happens you want to be as far from the USA as possible, preferrably presiding over a solid business that makes products that people actually want. What money will be used at that time is unimportant.
Dr Who wants his TARDIS back
Your'e all thinking it, I just said it for you
"If rules are changed on tax deferral and we are taxed in the U.S. on non-U.S. profit, this significant additional U.S. tax cost would adversely impact our ability to invest and grow our business in the U.S. ... and to compete against our foreign competitors who are not subject to the U.S. tax," said Cisco Systems Inc. spokesman John Earnhardt.
The thing to note which is often left out of these conversations is that the USA taxes WORLD income. I can't really blame folks for not understanding the details (I can't say I fully understand them myself, by any means), but at the core, the USA expects you to pay income tax no matter where you generated the revenue and no matter what other taxes you've already paid. One of these "loopholes" was flexibility in this doctrine.
One must wonder how competitive the USA can be when we are taxing our own corporation's profits they've generated (for example) with Chinese workers, using Chinese products and Chinese consumers. The USA is generally unique in this regard. A company's value is based on its earnings, which is reflected in the share prices which are owned in your 401k plans. A company also hires and reinvests based on how much money they money they net.
Sure, you can work under the assumption that reinstating heavier taxation on overseas revenue will "bring jobs back home", but to blatantly simplify this issue by calling this "a tax haven" without any detail is intellectual dishonesty.
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
Not in the 1960s during our second boom.
If wartime causes booms, does that explain away 2003-2007? Neat.
Ticks both ways I think.
The simple fact is that tax cuts and increases have zero statistical correlation with GDP growth, either positive or negative. Even when normalizing other variables, this seems to be the case from every study I've ever seen.
*shrugs*
The race to lower taxes is a race straight to the bottom. Businesses will continue to use tax havens as long as there is any benefit to doing so, and the simple fact is that a big economy like the USA cannot afford to lower tax rates to what a little place like the Cayman Islands can charge, e.g. basically nothing.
A better solution is to change conflict laws to ignore the formal jurisdiction of incorporation and instead use the primary place of business.
Or just use FairTax or some other national sales tax and kill income and corporate income taxes all together. Your much less likely to see loss of revenue to tax havens if you are a tax haven.
This is something that the major economies of the world can cooperate to make happen, and we don't have to drop our taxes into the toilet to do it.
Great, our current government isn't big enough, lets have a one world government to regulate taxes and trade between everybody.
If you were the Cayman Islands, why in the hell would you be willing to lose a huge portion of your business by divulging tax information to other countries? What is the incentive?
The Gospel according to lolcat
The United States currently has the lowest overall tax rates in the world, by a small margin.
However, the cost of living in the United States (even including taxes) is MUCH higher than most countries.
For example, health care quality in Canada is generally regarded as equal to a US based HMO. You can argue all you want about specialists and whatever... I'm talking about an HMO like Kaiser.
However, in Canada, the cost-per-person of providing that health care is barely half in Canada...
So they have 5% higher taxes to pay for it, but are able to avoid spending 8-10% of their income to provide health care for their family.
In addition to the lower overall costs for healthcare, they have the added benefit of universal coverage, which means that people like homeless children are also covered.
If anyone could point out, numerically, how a privatized health care system is better, I'm interested to hear. I don't particularly care for polemic or euphemism about slavery. Almost everyone in the world pays more taxes than you do and you DO NOT want to live in countries where you would not (Zimbabwe and Somalia come to mind).
Back when raising an army consisted of feeding and clothing a bunch of already-armed farmers, taxes could be lower, but 10% tax rates don't buy F22s, National Guard disaster relief Blackhawks and advanced CDC laboratories to isolate and analyze nationwide virus outbreaks.
"big businesses" will have to fire people or increase their prices to remain competitive successful
Goddammit, wrong, wrong, WRONG.
Taxing profits does not mean labor reduction. And raising prices on nonessential goods and services (like beer) sold under marginal tax rates on international markets just means that non-international U.S. companies selling in the same vertical (like Yuengling, Sierra Nevada, Iron City, Boston Beer/Samuel Adams, etc., etc., etc.), and who DON'T get to take advantage of these stupid offshore tax loopholes, they get a chance to compete.
What REALLY happens is these companies are forced to cut dividends. Who is most impacted by a 10-20% dividend cut? The ultra-rich. The majority stockholders. The multi-millionaires who have a 20% effective tax rate. This WHOLE THING is a back-handed capital gains tax.
This whole argument is bullshit. For every global mega-corp which is going to get hit by this loophole closure, there are a dozen or more other competing U.S.-based businesses who pay ALL of their taxes. These will see an incremental gain in relative market advantage, and they have that much better of an opportunity to compete. All you trickle-down people need to look at it from the perspective for small and medium-sized businesses and say "hooray for fair competition in the free marketplace". Isn't that what you all purport to believe in?
-----
BTW, how does your example conflate with taxing international profits? Chicago is only 75 miles away from Milwaukee. It's still the same company and it still employs U.S. workers. You think Miller is going to relocate to Singapore? Hardly.
If you're an American abroad, you're taxed for having a US passport (a reason why I have heard quite a few peopel changing nationality). All Obama is doing is making this a "feature" of being a US company as well (OK, a bit simplified but this is what it appears to boil down to).
Joking aside, it's not an easy problem to solve. If you look at what profits MS has made over the years and how much tax it has paid you do start to ask questions. And it's not just MS.
You phrase "taxs world income" also is correct in another way. Current US external debt appears to exceed the value of the bailouts. In other words, you could say that the world (again) pays to fix the US..
Big business (>500 workforce) employ an huge amount in a single location (20K, 100K) but the majority of the employment is small (20) and medium business (20 to 500). Alone small business employ 50% of the workforce. The big Business IIRC employ in the range of 10-20%. The advantage of big business is job opportunity, wage opportunity, more stable work etc... So no, big business do not employ big number of people. The majority is small business. But big business is less labile and more likely to exists after 10 years than small one.
C. Sagan : A demon haunted world:
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visit randi.org
Want to stop abuse on the part of corporations?
First, completely ban campaign contributions. I'm inclined to say lobbyists should be banned as well, or at least very strictly regulated.
Second, lower corporate tax, simplify the tax code, and ease up on certain regulations. I realize it's the latest fad to bash corporations, but the fact is that they're the ones who create jobs. They're the ones who produce products and provide services. If taxes go up it means they either raise process or lay off people, it's not complicated.
Another massive problem I see, particularly for small businesses is the burden of excessive regulation. Obviously, it's necessary to some extent, but this regulation essentially helps ensure that those at the top remain there and the upstarts have a hard time being truly successful.
One reason asian economies are thriving is because of the success of small business and their governments are actively promoting their growth through a variety of means. Taiwan, for example, offers extremely low interest rate business loans, South Korea I believe is offering dramatically lower tax rates for the first few years of business. And they aren't encumbered by all the absurd regulations American companies have to deal with, both state and federal.
Third, when a company does break the law they should be punished harshly and promptly. I'm not so naive as to believe that there aren't people out there looking to take advantage of the system. Obviously consumers need to also be protected from abuses. And if a company is poorly run, there's no justifiable reason to bail them out. To be honest, the problem with the banks, for example, is that the government allowed them to get too large. But even if it meant some short-term economic pain I tend to think they should have been allowed to fail. Live by the sword, die by the sword, and all that.
Using tax havens, in my opinion, ranks fairly low on my list of offenses. If the US offered a more attractive business environment these companies wouldn't have the incentive to move money offshore.
As long as Coors doesn't move the brewery here in Golden where I can get free beer, I'll be happy.
How is it we've totally forgotten that? Everything I see gov't doing now is about "maximizing revenue", as if we're all cows to be milked rather than citizens.
Maybe if they didn't maximize spending, they wouldn't need so much revenue, ya think??
~REZ~ #43301. Who'd fake being me anyway?
In fact, IF gov't is truly "for the People", then one of its functions should be to MINIMIZE taxes, since taxes by definition are a penalty on the People (even those taxes which are used to benefit *some* of those People).
~REZ~ #43301. Who'd fake being me anyway?
Argument #1: Taxing corporations is a bad idea becuase corporations will pass that expense to the customer, cut jobs, and probably avoid the US altogether. We need to make government more efficient and cut spending.
Argument #2: Taxing corporations is good. It will help pay our national debt, reduce offshoring, and will prevent the forming of mega corporations and over compensated executives. Furthermore, it will encourage domestic competition since quantity of businesses will rise when their sizes are indirectly tax capped. Plus, corporate taxes are on retained earnins only, this cannot result in job loss since employee expenses are tax deductible.
Argument #3: We're fucked both ways becuase our government is mismanaged. As long as a mismanaged government is funded, we are enabling their actions. We need to legislate and simlify our tax system.
Argument #4: Corporate taxes will be used as a tool to shape public consumption and hand out government favors to "prospective" businesses.
Personally, I think argument #3 is the most sound. We can't really make any tax decisions becuase our government is such a bloated ineffective clusterfuck that it makes windows vista look like it can run on a thin client. For crying out lout, look at Japan. They are such a small country. They have the second largest GDP, fucking more than China and China owns them in population. Not to mention they have the worlds smallest government size (to people) ratio than any other "free" nation. They seem to have sane tax laws, good job market, good education, oh and they jacked our auto industry. They make us look unamerican.
Trying to install linux on my microwave, but keep getting a kernel panic...
Wow,
I see, but that only works for interest, royalties and dividends.
I guess I'm going to have to move my software business to 'computer art licensing'...
Whooooosh!
It doesn't matter if he cuts taxes if he's spending MORE! He's just shifting a much higher tax burden to future generations.
TANSTAAFL
Send your spendthrift head of state this
Mod parent up. People who want to raise taxes on evil "big business" seem to not understand that the end result is that those evil "big businesses" will have to fire people or increase their prices to remain competitive successful.
Big businesses employ big numbers of people. This concept is lost on most Democrats and populists that scapegoat big corporations. You can't just blame big companies for everything and expect that they'll ignore this and carry on!
And I think the concept of an income tax is lost on you: You pay them on corporate earnings. Which means profit.
I seem to remember in my college days that we learned how corporations looked at profit: before interest, and before taxes Companies don't make less money from their operations because they pay taxes. They just have less cash.
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To all the posters that are horrified that I want to maximize tax revenue: I don't. I was merely pointing out that the right-wing assumption that reducing tax rates usually leads to a net tax revenue increase is quite likely to be incorrect, especially at current tax rates.
I will say that when a govt. is trying to reduce a deficit incurred in the past, increasing tax revenue is often preferred to decreasing it. This is recognized on both sides of the aisle. The GOP has just been going about it in a way that has not, in fact, worked.
SirWired
Let see what can we do against crisis? Raise taxes ? Great idea, then we can have more bailout money.
I like the way they are thinking.
That's funny. Gotta love loaded phrases.
Businesses don't operate in a vacuum. The structures and guarantees of gov't are needed for a felxible and specialized economy such as ours.
Taxes, I would say, are needed for success in this world. Else your 'small business' would be completely taken from you by richer more powerful others.
Not necessarily. A book profit means that the balance (difference between assets and depts) increased. That could mean that the assets have increased because new equipment was bought from the cash income. Taxing profits means that young companies grow less. Profits are only paid out as dividends for mature companies that are not expanding anymore.
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Ireland is a gigantic tax evasion scam
Because there are "tax cards" that you get when you set up your country are Ireland drew the 12.5% one and now no one else can set their tax rate at that level. Is that what you're saying?
Ireland's corporate tax rate is what best suits Ireland - if Germany wants that tax rate, they can just set it. So why don't they? Because it doesn't suit them to. But it doesn't suit them that Ireland has... boo hoo.
For a long time Ireland was a very backward rural country with nothing at all. The best it could offer its youth was a pretty good education and a plane ticket to somewhere else. Suddenly (with a lot of credit to the EU) infrastructure was rapidly developed and because it was all new, it was top notch. Then all that education turned out to be quite useful.
US companies like being in Ireland because they get a lot of the comforts of home (the tax rate doesn't hurt).
If it was just about tax, then where are all the manufacturing companies?
Genesis 1:32 And God typed
Well, I am displeased to hear this, unless of course Obama was directing his attack towards the corporations and not the people. It is sad to say, but in this economic crisis, big coporations making billions of dollars profits, need to stand by their country, and support the failing infra-structure. It is not by forcing the poor people, who work so hard , but cant afford the legal representation or accounting council to find all the loopholes, that should be targeted.
Too often I find myself watching as the poor get poorer and ...well you know how it goes.
Britney Spears is making millions, is she paying millions too in tax, or is there a glitzy
accountant following her around calculating everything that can be deducted.
I would love to see a flat rate for people (corporations are a different matter) , that way less energy, effort,time and money is invested in making this happen. Think about it, no deductions, no receipts, no time wasted calculating, no time wasted getting documents, or contacting accountants that charge you through the nose to break even.
If we had a flat 20% of whatever you did make, poor would not be poorer, then the rich. They would be even. We would have alot more money in our coffers, because for once the rich would be paying
the FULL amount,.....remember no deductions...so from 100 million dollars for one person's gain in a year (Arnold Schwarzenegger) would equal about 20 million for the US! Thats it thats all.
No extra wasted money on the government figuring out new ways for people to pay, and have that side lined by another loop hole.
Why not, I ask you....why not?
I wrote this earlier on another message thread, but if President Obama wants to end the problem of "offshoring" assets, he needs to seriously consider going to the much simpler, but much more effective, FairTax consumption tax system to replace our entire national income tax system.
It's not a secret that the WORST form of corruption in Washington, DC is those thousands of tax lobbyists trying "tweak" the IRC to support even the most narrow of constituencies. The result: the IRC plus its additional rulings are now over 67,500 pages of regulation, a code so complex that even the Internal Revenue Service personally admits it has difficulty figuring it all out!
I mean, look at what's so very wrong about the IRC:
1. The compliance cost this year for 2008 Federal income taxes is a mind-boggling US$350 BILLION, and the cost is rising each subsequent year. While people like tax lawyers, accountants, Intuit, H&R Block and Jackson Hewitt might make money, isn't this in the end a major waste of resources that can be better used for other purposes?
2. The fact we tax savings and investments means the USA probably has the lowest savings rate in the world among industrialized countries. A higher savings and investment rate is so sorely needed if we are to fix our economy.
3. Tax evasion is a SERIOUS problem. We have a huge problem with people participating in the underground economy (I've read the estimated value of that is around an amazing US$2 trillion). American citizens and businesses who can afford it are using every possible legal (and sometimes illegal!) tax loophole in the IRC to funnel out of the USA a MASSIVE amount of liquidity, now sitting in offshore financial centers (OFCs) located in places like the Bahamas, Bermuda, Cayman Islands, Nauru, Panama, and so on to keep these assets out of the hands of the IRS. The amount sent out to OFCs: estimates vary, but shocking--somewhere between US$12 and US$17 TRILLION! And that money does not flow in our financial system, either.
4. Income taxes by definition favors debt financing over cash payments. The result is obviously wrong, as we've seen from the sub-prime mortgage meltdown of the past few years.
5. Larger American companies--because of having to make economic decisions based on lowering the tax burden instead of what's best for the business--are moving a lot of their corporate headquarter and production operations out of the USA. And you wonder why the Bahamas, Bermuda and the Cayman Islands have so many "corporate headquarter" offices and why American companies have large production facilities in Mexico, contracted out a lot of production to China, and contracted out a lot of customer service operations to India, causing big problems like closed factories all over the Midwest (the infamous Rust Belt) and a generally rising unemployment rate.
6. Because of the estate tax, Americans are spending a fortune on tax lawyers trying to figure out how to transfer money to the next generation without being hit by that 55% estate tax.
7. Foreigners are reluctant to invest in the USA because of very fact we have taxes on earning money.
This is why it is WAY past due we seriously look at fixing our taxation system. One radical (but very common sense) proposal, FairTax (House Resolution 25), essentially replaces all of our national income taxes (the Internal Revenue Code) with single 23% national sales tax on final production goods and services (business to business sales, used goods and college tuition are not taxed). To ensure this tax is progressive, every legal resident of the USA (citizens, resident aliens, aliens with work permits and foreign students at higher institutions of learning) will get a monthly payment that covers the cost of the tax up to the Federally-defined poverty level. This is the plan I favor, given these obvious advantages:
1. It breaks the power of tax lobbyists to use the IRC to favor one group and/or p
First item: Let's acknowledge that corporate taxes are a fraud. Corporations do not pay taxes. Rather, they remit so-called taxes that have been passed on, ultimately to consumers. Any tax the Government may levy on corporations will almost always be passed along to the consumer in one way or another. The corporation may simply directly pass along the cost by increasing prices and assuming taxes similarly affect all their competitors then this will be the easiest to accomplish. They may cut back on workers wages and benefits to offset the taxes. They may cut or eliminate dividends to shareholders. Most likely some combination of the three. And they may even pretend to eat some of the tax by paying for it by reducing profits (but I contend this is equivalent to cutting dividends).
Second item: business regularly seek to manipulate their operations to minimize taxes. They hire tax accountants and make business decisions based not on the soundness of the decision vis-a-vis how it benefits the business but on how the tax bottom line is impacted. On top of the actual corporate taxes paid, which were about $370B in 2007, corporations spend an additional $200B or more simply to comply with the tax code.
Third item: businesses regularly lobby for special exemptions and loopholes in the tax code. This leads to an overly complex tax code (and increased compliance costs) as well as the potential (and actuality!) for corruption in Government.
Fourth item: our federal corporate tax rate is one of the highest and most punitive in the world, and is cited as a major reason for our multi-national corporations to move their headquarters overseas.
By now, my proposal should be obvious: eliminate corporate taxes.
The compliance costs go away...$200B+ freed up for more productive things.
$350B (+$200B compliance costs) or so goes right to the bottom line, which will lead to cheaper goods for consumers and/or higher wages or dividends to employees and shareholders--what'll that do for the economy?
Business decisions now will be based on sound business principles instead of tax impact.
Loopholes, etc. go away...all businesses now on level playing field.
"Corporate welfare", which almost always takes the form of tax credits, goes away.
But best of all, consumers will make the decisions, not bureaucrats.
Addendum: tax gap (uncollected personal income taxes) is estimated at $250B to $300B each year. So put the IRS people who would have been overseeing corporate tax collections to work recovering these revenues and the corporate taxes not collected are basically offset!
shit yeah... tax the hell out of those companies (and hopefully individuals, who will be harder to catch)
foreign companies need all the breaks they can get with the protectionist attitudes of US industries.
americans really need to start taking care of their own.
having lived in countries where foreigners live for tax avoidance. Ive seen the cost of living skyrocket so dramatically that the locals cant afford to eat .. im fully in favor of this
You act as if our economy depends on these big businesses which are too big to fail when in reality more jobs are created by small businesses.
Tax cuts made in 2001 and 2003. Numbers in $B.
Year GDP-US Total Revenue-total
1999 9268.4 3168.45
2000 9817 3457.77
2001 10128 3756.33
2002 10469.6 3388.04
2003 10960.8 3671.43
2004 11685.9 3594.74
2005 12421.9 4017.01
2006 13178.4 4435.76
2007 13807.5 4776.44
2008 14280.7 4928.28
My own calculations for Revenue / GDP
0.34186
0.35222
0.37089
0.32361
0.33496
0.30761
0.32338
0.33659
0.34593
0.34510
If corporations pay less taxes, the citizen pays more taxes. If corporations pay more taxes, I pay less taxes, but prices go up. At least I have a say as to where the money goes.
Say, Microsoft pays more taxes and prices go up. I don't really care since I don't buy their product. But my income taxes decreases. My extra income from decreased taxes can offset the increase in prices in products I do purchase. In the end, I decide where my money goes.
You may argue that the mom and pop store I patron will have to charge more because their new computer costs more because of the increase price in the OS. If the mom and pop store uses Linux, then their prices stay the same. Again, I decide where my money goes, and so does everyone else. I shouldn't have to pay for every single company in the US that decides to use these loop holes.
Additionally, the small startup company that does not have the resources to run these schemes is at a disadvantage against the big company that does. If the agile startup company can keep more of their revenue, there would be more competition and innovation.
I can't believe how well the powerful corporate forces in the USA can manipulate the public so well. It makes you think representative democracy is dead or at least dying as the most dangerous science continues to progress: Psychology.
The banks run the show; they get what they want falling just short of causing riots and even have the gall to undo the housing bill from last week that addressed what EVERYBODY WAS SAYING (except most politicians on either side-- help the home owners don't reward the crooks. Many can now afford their house at its more realistic value. If you think poor minorities caused this mess then you are not smart enough.sorry.)
Now we get to see how corporatist the USA really is-- FINALLY somebody doing the public's will and making "tough" decisions that wouldn't be so hard if the government wasn't broken. Couldn't pick a better time to fix these problems and yet we end up with MORE OF THE SAME. Just watch as this one just barely fails like the rest.
Democracy Now! - uncensored, anti-establishment news
Where can we find a list of the 200 companies that oppose this plan?
Dude, where's my packet?
Rather than thinking about how to collect more taxes perhaps we should spend less?
I *adore* the folks who think this is terrible, and then seem to think it's going to hit us.
Let's be real: is there *anyone* here who's in the top 5% of the income profile? Hell, no, no one with that much money hangs out here, commenting on /. The nearest we get are the suckers who are *sure* they're Going To Be Rich Any Day Now, If They Work Hard Enough (and have no life).
The odds are hundreds to one, or maybe thousands, that you will *NEVER* be richer than the rest of us.
Now, let's get to that famous "enlightened self-interest": in 1972, 25% of the federal revenue stream was from corporate taxes, and 16.67% from individual income taxes. It's now just over 10% from corporate taxes, and about 44% from individuals. (Numbers from the IRS's Tax Stats at a glance.) Oh, and in '72, the top tax bracket was 70%.
Meanwhile, every year, or every quarter (until the last nine months or so), we keep hearing about record profits, while the good jobs here get offshored, or go to H1-B's.
So, let's not only kill the tax havens, let's *soak* Bill Gates, and Larry Ellison, and the Waltons, and all the rest. Get rid of separate capital gains taxes, and roll it into straight income. Won't affect 401Ks, or other retirement, only the folks with *millions* of income annually from stocks.
mark
Over 60% of the real US economy is SMALL BUSINESS and they pay their fair share of taxes! Its unfair that the weaker businesses bear the burden while the mega corps bribe and sucker people into letting them cheat on their taxes.
History is not on the side of Reaganomics; sucker.
Yeah, the rich should pay nothing...
The USA's economic religion is what is causing the fall of the USA; its an implosion and half the nation is suckered into screwing themselves.
The COST OF LABOR is greater in the USA than the legitimate corporate taxes. They will continue to outsource. These mega "US" corporations are multinational and really have no loyalty to the USA or any other nation. Most do not need to exist. I for one would be ok with slower technological progress if we didn't allow corps to get big enough to buy off the government that regulates them (and by extension never be too big to fail.)
Corporations are created by government and owe their existence to it; there is no reason limitations can not be placed upon large corps so they can not move out. Germany for example, makes corps leaving pay back the benefits and welfare they get from the government... Which makes it extremely difficult to leave without going broke.
Democracy Now! - uncensored, anti-establishment news
What you fail to realize is that if on paper Big business is headquartered in Cayman Islands, but 99% of its workforce is in the US, they are not simply going to move 99% of its workforce to Cayman Islands (or fire US workers and hire people in Cayman Islands.) If they could have done that, they would have already done it.
SO the Big Business will remain here, will continue to employ Americans and will now pay the correct taxes.
smaller businesses. Multinational corporations are the only ones given this benefit. "Common people" lose business as they are undercut by corporate armies who're using every trick and low blow they can find. Sure prices might rise, but we'll probably see a fairer business climate rather than one that's lopsided and unhealthy.
This is corporatism. More people will start to WAKE UP as they see that the people don't really have representation.
MegaCorps get our representation with hardly any taxation. Win-Win for them. Nothing new here except we have 1 man trying to do something illustrating just how bad it is to even more people.
Democracy Now! - uncensored, anti-establishment news
So basically what the companies are saying is, "Unless we can screw you (i.e. US and European taxpayers), we'll pick up our marbles and go home." My only question is, "Will you take some bankers with you when you leave?" possibly followed by, "Guess whose bank accounts are frozen?"
Please do not read this sig. Thank you.
IMPEACH obama and the democrats and liberals and progressives at the national and state levels!
Even chavez, musolini and hitler were well liked by the populus!
REMOVE the cabinet members!
REMOVE the czars!
REPEAL all bills signed into law since the the inauguration!
LESS government intervention in our business and our lives!
DEPORT the illegial immigrints and aliens! After all, they have broken the law and are criminals!
NO cap and trade! Science has proven there is NO man-made GLOBAL WARMING!
REDUCE taxation at all levels, for all individuals and businesses!
NO joining a world bank or finaicial regulator!
NO to the U.N. method of treating children! We wright the laws in our country NOT theU.N.!
NO additional gun control! REPEAL any laws requiring laser etched ammunition!
NO to any democrat, liberal, progressive, socialists, or communist ideas and bills!
The original idea behind "vakantiegeld" was one of "enlightened capitalism". The idea being that employees who go on vacation have higher productivity, this lead to a mandatory vacation.
Because the employer could not count on the employee saving some money during the year to actually go on vacation "vacation money" was invented: the employer saves a percentage of the wage of the employee and pays it in may.
The shift is already happening, and it is not revolutionary...
If that's true, the administration might as well convince Congress to raise taxes. You're saying it's already too late to stop them from moving out of the US entirely, since they already are. In that case, an increase in taxes doesn't change their behavior in the slightest.
"However, in Canada, the cost-per-person of providing that health care is barely half in Canada...
So they have 5% higher taxes to pay for it, but are able to avoid spending 8-10% of their income to provide health care for their family."
So they pay 5% more of their income and their health care costs are reduced by 4-5% of the income? Sounds like they just about break even
There is also:
3. Invade tax havens.
Hmmm. Aren't both Bermuda and the Cayman Islands part of the British Commonwealth? Wouldn't an attack on them mean that we're at war with England, Canada, and Australia? While we could win, aren't they our friends? Canada is even helping to prop up GM & Chrysler, and if that isn't throwing away good money on our behalf, I don't know what is.
The Netherlands is a NATO country, and we are bound by treaty to attack any nation which invades a NATO nation. NATO is first and foremost a mutual defence alliance. Since obeying treaties is a Constitutional obligation, we would have to fight ourselves. Should we use blue state vs. red state, or do you have some other division in mind? Maybe redo 1861-1865, but give the Confederates a few other states to even things up a bit?
Shutting down the tax havens is an excellent idea, but claiming to be serious about a war is just stupid.
That said, we can strong arm them into line. We can embargo and blockade all we want. It won't work with the Dutch, because they have land access into Europe, but being an island in the USA's backyard leaves them at a serious disadvantage. Might Makes Right and a fleet would get them to tow the line quickly.
Then what do we do when the Tax Havens move further away?
- doug
In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.
(diff article): Additionally, income does not capture the extent of wealth inequality. Wealth is derived over time from the collection of income earnings and growth of assets. The income of one year cannot encompass the accumulation over a lifetime. Income statistics view too narrow a time span for it to be an adequate indicator of financial inequality. For example, the Gini coefficient for wealth inequality increased from 0.80 in 1983 to 0.84 in 1989. In the same year, 1989, the Gini coefficient for income was only 0.52.[9] The Gini coefficient is an economic tool on a scale from 0 to 1 that measures the level of inequality. 0 signifies perfect equality and 1 represents perfect inequality. From this data, it is evident that in 1989 there was a discrepancy about the level of economic disparity with the extent of wealth inequality significantly higher than income inequality.
(see wiki).
or see this So no, I don't care about the 40% of the population that might have 1 share in BP.
Just like not giving money to the banks and automakers, making businesses pay taxes will destroy the economy! The poor people will um.. be poor! The really really really rich people will be reduced by at least one really! Oh the humanity!
Having to work for a living is the root of all evil.
The industrial sector is moving to Asia because of massive amounts of cheap labor, and fewer safety and environmental controls.
Spend some time in China. Hire someone to clean your house, for 2 hours, for $3.50. No government nanny tax, medicare, or disability insurance. Watch construction workers walk an iron scaffold, 40 feet up, in tee-shirts, shorts, and barefoot, with no gear. I saw all of these things TODAY.
Until we all value life the same way, or understand the costs of injuries/death, labor-intensive work will go where it's cheapest.
Beware: I believe all are created equal, and have the right to life, liberty, and the pursuit of happiness.
Corporations don't pay taxes, they collect them.
Think about it.
Don't blame me, I didn't vote for either of them!
Would you volunteer to lower the income section of you're own company's quarterly report?
Let me be clear: everyone here with a $200K 401(k) is a corporation owner. The companies are beholden to YOU.
Keep that in mind when you suggest dicking with their income statement. Do you want to own a company that's making less revenue, that's shrinking? Assemble your peers, and vote your proxy.
I won't be voting with you. Or maybe I'll sell a few calls, and vote with you for fun...
Beware: I believe all are created equal, and have the right to life, liberty, and the pursuit of happiness.
Which was helpful when passing mis-typed parameters was a common source of bugs.
We can never know everything MS is into. If we can imagine it, they could be into it. They are very progressive after all.
The IRS last month announced an amnesty program to give off-shore companies the "opportunity" to open their books for a chance at reduced fines
This sounds like the stick that follows the carrot.
Yup. I had H&R do my taxes this year. Cost about 160 bucks. And.... they did them incorrectly. I owed some extra to the state/county.
Here's a better idea. Let's make the U.S. a tax haven, so all the world's business and industry will move HERE instead of continuing to leave in droves!!
~REZ~ #43301. Who'd fake being me anyway?
You're absolutely right...
Here's another good one... watch everyone of moderate to high income leave California (where $150k/year is only middle class) in droves. And a 55% tax on high-dollar property? Do they really think everyone with a $15M property has $8M lying around in cash? (Or is this really a land grab made easy by property tax defaults?)
=====
http://www.sos.ca.gov/elections/elections_j.htm
1351. (08-0020)
Wealth Tax. Initiative Constitutional Amendment and Statute.
Summary Date: 01/28/09
Circulation Deadline: 06/29/09
Signatures Required: 694,354
Proponent: Paul McCauley
Imposes one-time tax of at least 55% on property in California exceeding $15 million if single, $20 million if married. Imposes one-time tax (between 36.5% - 54.3%) on income exceeding $10 million when resident dies or leaves California. Imposes additional 17.5% tax on total incomes of taxpayers with income exceeding $150,000 if single, $250,000 if married; 35% if incomes exceed $350,000 if single, $500,000 if married. Creates tax credits. Requires State to acquire shares of specified corporations to influence environmental practices. May exempt new revenues from education funding requirements. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: One-time increase in state revenues potentially in the low hundreds of billions of dollars from imposition of a wealth tax, and ongoing increase in state revenues potentially in the billions of dollars from imposition of the tax on certain people dying or leaving the state. This revenue would be allocated to accomplish various goals related to environmental protection. Potential annual net increase in personal income tax revenues in the tens of billions of dollars annually. At least $8 billion annually would be allocated to the state General Fund with additional revenue allocated for environmental protection. Unknown state and local revenue reductions-potentially in the tens of billions of dollars annually-due to changes in taxpayer behavior. (08-0020.)
======
(No shit, sherlock...)
~REZ~ #43301. Who'd fake being me anyway?
http://assets.opencrs.com/rpts/R40104_20090227.pdf
Sure, cutting X tax will increase Y revenue.
If I cut someone's taxes by 10,000 dollars, and the neighborhoods revenue rises by 1 dollar, was that wise?
In terms of revenue put back into the economy, the link above shows that for every dollar you cut corporate tax, 30 cents goes back into the economy. Whereas, paying a government dollar out to someone in food stamps, puts 1.73 dollars back into the economy.
We have to tax. We might as well tax the areas that are proven to be LEAST stimulating to the economy when given a tax break.
in case you don't want to click the pdf, here's the list. don't have time to format it though:)
Policy Proposal One-year change in real GDP for a given policy change per dollar
Tax Provisions
Non-refundable rebate 1.02
Refundable rebate 1.26
Payroll tax holiday 1.29
Across the board tax cut 1.03
Accelerated depreciation 0.27
Extend alternative minimum tax patch 0.48
Make income tax cuts expiring in 2010 permanent 0.29
Make expiring dividend and capital gains tax cuts permanent 0.37
Reduce corporate tax rates 0.30
Spending Provisions
Extend unemployment compensation benefits 1.64
Temporary increase in food stamps 1.73
Revenue transfers to state governments 1.36
Increase infrastructure spending 1.59
Source: Mark Zandi, Moodyâ(TM)s Economy.com.
We don't. Hey, I don't want to be responsible for killing people, even if it means they would kill me. I would rather be killed than kill someone else that I don't know by proxy without my personal consent for reasons I don't directly agree with or have any say in. I would rather not be in the position where I am killed because of some politician's decision on behalf of a people who don't really want to kill anyone, and I don't want to put anyone in that position myself. If we have to accept this for a brighter future, then count me in, kill me.
Silly article.
Mart
"I know I will be modded down for this": where's the option '-1, Asking for it'?
I'll give you the benefit of the doubt and assume you meant income taxes. But you're still misinformed.
You're completely missing the point about tax rates. Whatever the figures and technicalities, the top tax bracket in the U.S. is a lot less than 52%. Perhaps the point would be more obvious if you lived in the U.S., where the pundits the writer mentions make a whipping boy of European "socialism", which they basically use as a code word for the high taxes (real and imagined) that rich Europeans pay.
Basically the guy is saying that an American who looks at the Dutch tax system is going to jump to the common misunderstanding that it's a soak-the-rich scheme. And he's right, we would.
As for vacation money, the fact that it's effectively part of your salary is kind of beside the point. In the U.S. (and everywhere except the Netherlands, if I'm not mistaken) there's no government mandate to make sure people have money for a proper vacation. You're expected to save or borrow your vacation money on your own; if you can't or don't, you're out of luck. Whereas in the Netherlands there seems to be an assumption that everybody, even people who are improvident or don't work, deserves a chance to get away for a short while. That's a very unusual and interesting point of view.
... Policy Wonks are Geeks with better smelling cologne.
Phew. Pretty heady stuff here.
How about we socialise everything that everyone needs. You're going to pay for it so why not include it in taxes and get a massive economy of scale? This still leaves loads of room for corporations to make cash on "luxuries" and will leave more money in the pockets of the consumer to spend on it?
Economy of scale is still a pretty powerful argument, IMHO, especially when it comes to education, basic utilities, roads and health care).
Surely we can build capitalism on a strong social base?
I know I'm whispering in a tornado but can we just think about how to do things better rather than clash ideologies?
you talk like a fag and your shits all retarded