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Outrage At Microsoft Offshoring Tax In the UK, Google Caught Avoiding US Taxes
Master Of Ninja writes "After the ongoing row about companies not paying a fair share of tax in the United Kingdom, and with companies such as Starbucks, Amazon and Google being in the headlines, focus has now turned to Microsoft. Whilst the tax arrangements are strictly legal, there has been outrage on how companies are avoiding paying their fair share of tax generated in the country."
And over here in the U.S., dstates sent in news of Google getting caught doing something similar: "Bloomberg reports that Google is using Bermuda shell companies to avoid paying billions of dollars in taxes worldwide. By routing payments and recording profits in zero-tax havens, multinational companies have been avoiding double digit corporate taxes in the U.S. and Europe. Congressional hearings were held in July on the destructive consequences of off-shoring profits. Why aren't the U.S. and Europe exerting more diplomatic pressure on these tax havens that are effectively stealing from the U.S. and European treasuries by allowing profits that did not result from activities in Bermuda or the Cayman Islands to be recorded as occurring there?"
"Why aren't the US and Europe exerting more diplomatic pressure on these tax havens...?"
Because where else would US politicians offshore their income? http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts
Sent from my ENIAC
So... lower corporate tax rates to the point where it's not worth the bother of jumping through these hoops.
No, actually I'm not. Not in the least. It's the way of things now, even when your motto is "Do no evil" or "What evil would you like to get into today?" Wall Street expects certain targets to be hit and the way to do that is cut corners and use loopholes.
A feeling of having made the same mistake before: Deja Foobar
Hasn't this sort of thing been going on for quite a while with large companies? Heck, even smaller companies. It's always in the best interest of the business to keep as much of their profits as possible, and since it's only slightly trivial to buy a politician, loopholes will exist for the foreseeable future.
Here's a thought; if you want companies to pay more taxes then make taxes reasonably low enough that companies find it more bothersome to play legal shell games than simply pay a tax.
In the end all the talk of taxing "the rich" or "greedy multi-national corporations" or some other bugaboo is absurd on the face of it, because you are seeking to attack the very people that have the legal and financial resources to simply shift money elsewhere where governments are less greedy themselves. In the end by heavily taxing people or groups with lots of money you simply get less from them than you would have otherwise. It sure sounds great on TV news bytes though!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Microsoft is an American company.
We should get first crack at stopping their tax evasion here.
What I'd like to know is why the whiners don't try it themselves? There are plenty of ways to legally lower your own taxes. Look into them instead of bitching about the people who are smart enough to actually do it.
Maybe the corporate taxes should be set at a more favorable rate. 20% of something is still more than 35% of nothing. (or whatever the current tax rate is.). Additionally we could simplify the tax code so these companies don't need to spend millions on their accounting and tax lawyers. Unfortunately we'd probably have to shoot all of the politicians first as this is where many of them came from, and are paid in campaign contributions to do.
Corporations are not people with concience and moral values. They are sociopathic bureaucracies.
Corporations should have to present their business plans to the government of the day and demonstrate their net value to society, at least every five years. Those that cannot do so should be disolved. Those appointed by the government to determine if corporations will continue to enjoy their licenses should be barred from receiving anything of value from corporations, other than by way of arms length transactions at fair market value, in the 25 years preceding their considering and making such decisions and in perpetuity thereafter.
Until this happens, there will be no end of corporate greed and abuse.
I know this is crazy, but maybe the problem is the taxes. It doesn't make any sense at all tax corporate profits when you could just as easily tax the income shareholders make from the profits, or capital gains in the event a corporation doesn't post dividends.
Maybe more countries should move to a VAT system. That way, it doesn't matter what they make. If the product is sold in the nation, it gets taxed, period. No ifs, ands, or buts.
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
since there economy is going to collapse all the money they'd pay would vanish into ether or worse, be put towards 'defence spending'
The reason these loopholes work is that multinational corporations can allocated their costs to high-tax countries and profits to low-tax countries. For example, a US operation "licenses" some software from a subsidiary in Cayman Islands or pays for "consulting services" that end up eating up all of the profits. Through these tricks a US corporation ends up with near-zero taxable income, while all the profits are transferred to tax havens.
The solution is to tax ALL profits, regardless of which country they were supposedly "earned" in. That way, transferring profits to Bermuda or Luxembourg will have no effect.
___
If you think big enough, you'll never have to do it.
That's the argument we use for file "sharing", so let's not turn it on its head for tax. You want to earn it, make the argument for it.
There is no inherent merit to paying taxes. They are a necessary evil to fund useful public works, and should be kept to an absolute minimum. When States becomes bloated, inward looking, ever swelling monsters that squeeze the pips until they squeak, tax avoision becomes an act of moral rebellion.
Brits in particular tithe up to 75% of our "income" to the State, when you factor in income tax, national insurance, council tax, water and sewerage rates, VAT, insurance tax, parking fees, and fuel and customs duty on everything imported or moved around. And that "income" is what employers can afford to pay us after they pay all of their protection money to the biggest racket in town.
So good on Microsoft and Google and Amazon and all the other companies who are throwing two fingers up at the grasping State. Let it wither and die, as long as it rots from the head down.
If you were blocking sigs, you wouldn't have to read this.
Someone's gotta pay for global military to be sure air bandits, pirates, and dubious govts don't steal corporate commerce as it moves around the world. And these companies have plenty of cash to pay taxes. Though not sure how deal with dubious governments....
mfwright@batnet.com
They may be evading sums as large as $99!!!
Because where else would US politicians offshore their income? http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts
I'm NO friend of Mitt Romney - to put it mildly. But let's not blame him for something that's not his doing.
1) Because Romney was running for president, US law REQUIRES he put his money in a blind trust.
2) Also under US law the trustee has a "fiduciary duty" to do his reasonable best to protect and grow Romney's money for him. That includes seeing to it that is not taxed substantially more than the law requires. If he can save, say, 40% of the trust's earnings from being taxed away by using a LEGAL tax haven in Bermuda, and trustees of such trusts are expected to know that, he is REQUIRED BY LAW to do so.
So let's not have cheap shots against politicians and financial managers who are only doing what the law REQUIRES them to do.
There are plenty of things politicians have done that we can LEGITIMATELY go after them about - which have zapped us to the tune of trillions of dollars - at $3,175.40 from EACH citizen for EACH trillion. Let's not the dilute the discussion, and give them something to use to discredit their critics, by flaming them over drops in the bucket that AREN'T THEIR FAULT.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
This is a very, very bogus report. "Outrage"? Come on! Is it legal? Yes. Is there some kind of "moral requirement" that we all maximize the taxes we have to pay or suffer "outrage"? Don't we all look for all the deductions we can legally get away with? WTF is all the bogus "outrage" at perfectly normal, legal behavior?
You should find this behavior reprehensible.
This is not a tax avoidance strategy available to people with incomes below a a couple of hundred thousand dollars, which is almost all of you. We have a massive debt, and infrastructure we currently (rightly or wrongly) rely on the government for. Someone has to pay those things. If large corporations and high-income individuals aren't, that means we're forced to pick up their burden simply because we can't afford the same tax avoidance strategies.
So, regardless of how you feel about taxes being theft or whatever, this should be outrageous and unconscionable.
Need a Python, C++, Unix, Linux develop
If Apple does it, it's okay because they are maximizing their shareholders' profit. But how can we let Microsoft or Google get away with it? I AM OUTRAGED AT THIS MORALLY CORRUPT CORPORATIONS!!
This isn't a problem with the companies in question - it's a problem with the game. As soon as a company has a presence in more than one country, the company needs to start making decisions about taxation. It's not an option not to make these decisions - one way or another, they have to be made. There is no option for them to simply "not play the game". They must.
And once they start playing, they find themselves in a crazy maze of exceptions, loopholes, provisos and special cases. If you want to cut down tax avoidance (not evasion) then you need to simplify the taxation system to the point where these loopholes don't exist. Of course, that'll never happen, because politicians for the last century have been busily creating loopholes in order to favour their particular patrons, and closing those loopholes would result in screams from said patrons.
The problem the politicians see isn't that these loopholes exist, it's that companies are using them who haven't paid politicians for the privilege.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
If you don't want companies to use loopholes in the tax code to legally avoid taxes, don't put loopholes in the tax code. Let's all remember that those loopholes and deductions were all heartily lobbied and bargained for. If you didn't want them passed, why didn't you send funds to your representative in order to vote against them?
So, these companies employ competent accountants, tax attorneys and financial managers to preserve their shareholders' earnings. That's exactly what they're supposed to do.: It's called meeting their fiduciary duty.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
All of this crap is legal, that's why they call it tax 'avoidance'. It's not right, or fair, but it is legal.
Did a little checking: Actually a presidential candidate is not REQUIRED to put their money in a blind trust.
In principle Romney could have kept control and ordered his accountants to not use a tax haven.
The downside is that he'd be nuts to do so. In addition to the loss of money from such deliberate mismanagement, he'd be leaving himself open to legitimate attacks on any OTHER decision he made about the money, along withaccusations of conflict-of-interest when he makes political decisions. (Avoiding both conflicts of interest and the appearance of them is the whole point of blind trusts.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
"Stealing" from the treasury! What a load of BS. Google/Microsoft are no more "stealing" from the treasury than you are because you haven't gone out and bought me something.
Taxation is legalized theft, no more, no less.
No economist thinks that corporations pay taxes, tho they may argue whether employees or customers bear the larger burden. Corporations choose between alternative projects based on the after-tax ROI. If they do not get the required return, they don't do the project or adopt a tax-reduction strategy.
Mod parent up! That's a very good metaphor.
Whilst the tax arrangements are strictly legal, there has been outrage on how companies are avoiding paying their fair share of tax generated in the country.
So, if the country's tax laws do not require these companies to pay their "fair share", then how exactly does one define their "fair share"??? Exactly how much more should they pay than what they are legally obligated to??? How large of an over payment would satisfy these critics???
...more and more implicit or explicit class warfare crap in the news. I suspect it's not coincidence.
"...Whilst the tax arrangements are strictly legal..." - THAT is where blame for these corporations ends, period. Do you deliberately pay more for milk than you need to? Do you volunteer some extra taxes because the government is in a bind? Of course not. These corporations do what they do to save money however they can - and as long as they stay within the bounds of the rule/laws, disparaging them is pointing in ENTIRELY the wrong direction.
Look instead at the incompetent government that WROTE THE RULES, morons.
Hey, I "get it". I'd cheerfully decimate the companies that bundled their crap investments, the 'rating' agencies that rated them AAA, and the bond traders that cheerfully swallowed instead of spitting. Then I remember: they were all largely conducting LEGAL business according to the rules and laws set forth by ... our incompetent government.
THEY would have suffered the natural result of their actions in the market, but then they were PROTECTED from their results (gotta make sure they get their bonuses, ya?) from...our incompetent government.
Want to know why I'm a libertarian conservative? Because in 45 years I've become convinced that while often it is well-meaning, almost all government is incompetent, and therefore the least possible government is best. Which is better, semi-anarchy where one is free to build ones own future as best one can, or some sort of perpetual serfdom to the landed classes that see us only as rubes to exploit, cows to milk, or votes to pander to?
-Styopa
Who gets to what a "fair" share is? Politicians who will always want to spend more money?
Really it is the shareholders and owners that should be taxed, not the corporations.
There are all sorts of problems with taxing corporations, one of which this article touches on. There are plenty of others. One of them is that taxation of corporations encourages them to get involved in the political process. Another is that it encourages them to make decisions based on which venue will give them the best "deal".
In the US anyway I think that taxation of corporations should be eliminated. Taxes should be raised on individuals (shareholders and owners) to compensate.
With this in place the idea of corporations as citizens would be weakened considerably.
Ideally this would be combined with a Constitutional amendment reversing the effect of the Citizen's United decision.
It's worth considering that the best point of attack might be to tax the repatriated funds to offset the difference. "Overseas profits" have to be repatriated before they can be disbursed to shareholders.
Hello? Last I checked the companies EARNED the money and it was the GOVERNMENTS trying to steal it from them. Yes steal with the threat of violence if you don't hand the money over to them. Power to these companies for fucking the man.
Can we just get back to saying "while" instead of using its pretentious trendy douchey variant? Sure, if you're British, and you use it regularly, fine. Otherwise, get over yourself.
Have gnu, will travel.
Interesting. Bill Gates was quoted by ThinkProgress in 2012 saying that the rich should pay more taxes. Funny how that doesn't apply to his company. Somehow it's okay for him and Ballmer to shift money offshore while he says the following:
"In an interview with the BBC, Gates noted “taxes are going to have to go up” and thus he’d prefer that they “go up more on the rich than everyone else.” There needs to be “a sense of shared sacrifice,” he said, adding, “right now, I don’t feel like people like myself are paying as much as we should”:
http://thinkprogress.org/economy/2012/01/25/411283/bill-gates-taxes-justice/?mobile=nc
And frankly, every single one of us does it when we can get away with it, as well.
"First they came for the slanderers and i said nothing."
In New Zealand, things which are purely for tax avoidance are illegal. They get banks for that all the time.
Is solely because of overspending.
Which causes the government to raise taxes.
Which cause people and corporations to do more to shelter their income.
How about we just eliminate the corporate taxes altogether. Instead ensure that all money paid out to individuals is properly taxed as income, apply sales tax to all purchas
"Whilst the tax arrangements are strictly legal" then STFU and change the law, asshole. Why the hell should anyone pay more than legally required? Oh wait, because you're demagoging for your own perceived benefit. I have an idea - why don't you *FIRST* let us all know both how much you make and how much you pay in taxes, and then we can talk about the evils of others. Is this really what Slashdot has come to? Holy fuck.
Well, that was a much longer and carefully structured comment on the preview screen. What's the point of a preview if what's on the preview gets truncated when you hit submit?
Oh well, I'm not going to retype that long and detailed dissertation.
If I were a billionaire I'd hide all my money from those greedy bastards too.
How about "Why does America still use a terrible tax system that is so easily abused?"
Stop the bullshit and reform the tax code entirely. It's a special interest monster designed to buy votes and support.
We aren't tax slaves.
There's nothing wrong or unfair about avoiding taxation. The top 1% of taxpayers pay 20% of the taxes. That's plenty.
I hear this all over and have to wonder how much money in taxes would be collected from this group compared to how much these companies don't pay. I don't see where taking refunds away from people who make $30K a year or less would matter when multiple companies can legally skip out of paying billions.
As long as the money just circulates through and never falls into any person's hands, who cares? At some point some human being is going to want another mansion or yacht. When they reach their hand into the pot that's when you grab them and take the government's cut.
Nobody is going to waste their life shuffling funds around and endless loop of shell corporations with no intention or method of eventually extracting some of it.
Imagine a Kennedy or Romney getting a house foreclosed on because the local government requires property taxes to be paid in cash. Or unable to restock on champagne and caviar because the clerk at the checkout doesn't accept "I own umpteen offshore corporations" as a valid method of payment. Or cleaning their own pool because every pool boy wants cash, no numbered Swiss accounts please.
The folks running these tax scams aren't doing it for kicks. They're doing it because they want to live high on the hog. As long as the taxes on their luxury lifestyles are in fair proportion to the taxes on us regular folks and our regular lifestyles who cares how the corporate books are structured.
Incidentally all those offshore shell corporations are setup by lawyers and accountants who ultimately want a cash paycheck to buy stuff with. If the CEO can buy another yacht by laying off the hoard of lawyers/accountants that spend their days fabricating shell corps he/she certainly will.
BTW, I support taxing cap gains same as income. If you had X dollars yesterday and X+Y today you owe tax on Y. I don't care where it came from or how you got it. If you're a human being you owe your fair share tax on $Y.
2) Also under US law the trustee has a "fiduciary duty" to do his reasonable best to protect and grow Romney's money for him. That includes seeing to it that is not taxed substantially more than the law requires. If he can save, say, 40% of the trust's earnings from being taxed away by using a LEGAL tax haven in Bermuda, and trustees of such trusts are expected to know that, he is REQUIRED BY LAW to do so.
Really? Can you cite a case where it was decided that banking domestic was breach of fiduciary duty?
We know tax evasion has been an issue for a long time, and we have not been able to fight efficiently against it. Every legal measure was optimized against by big corporation army of lawyers. And now we just started fighting on a front I did not see coming: tax evasion/optimization is now a PR shame.
That is efficient. But what puzzles me is that it can only happen with the help of the media. And the media are in the hands of corporate interest, which benefit of tax evasion/optimization. How was that vicious circle broken?
Look, the thieves are crying because someone is avoiding their theft.
Every penny that escapes the US tax system is a penny that isn't advancing Führer Obama's tyranny.
Contribute to civilization: ari.aynrand.org/donate
That being said, there is some nasty stuff going on on wall street that very much needs to be strangled. Manipulations with total return swaps and similar instruments that put cash into the hands of folks with massive investment holdings without having to report the cash as income. I certainly don't understand all the machinations, but I fully support giving the IRS teeth to dig into the results, not the methods.
If you've got three yachts, five mansions, and twenty three luxury cars you'd better have paid income tax consistent with your level of spending. If it looks like income and it smells like income then as far as I'm concerned it's income. I don't care what elaborate financial transaction ultimately resulted into that valuable asset finding it's way physically into your hands.
If your houses collectively are worth 1000 times what my one house is worth and you're paying 1000 times the property taxes then I'm happy. If you're playing some trickery where they're not "really" your houses, you merely have exclusive access to them and control over them but they're "actually" expenses on the balance sheet of a Burmuda Corp that you own through seven subsidiaries then I've got a problem with that.
There is no such thing as a loophole. There are deductions, credits, income allocation and a whole host of other things but loophole is a general demonization of legitimate, legal methods of reducing your tax burden.
That "metaphor" is bad. A $0 corporate tax does not result in 0 benefit to the country. Wage earners still pay income tax. If companies are allowed to keep more of their money in the US then that will likely be spent in wages and products that support additional wages. The money's kept off shore are not brought on shore as that would result in additional taxes.
In the UK, as in many other European and Asian countries, the residents don't own themselves: They are subjects of the monarch and whatever they earn or produce is also owned by the monarch. Since the 15th Century most of these countries (Notable exceptions are Russia and China) have enacted certain "Bills of Rights" where it is presumed that the production of the subjects remains with the producers, subject to the needs of the monarch.
In the USA, people are deemed to own themselves: Their rights to Life, Liberty and Property are endowed by their creator, not by the monarchy. In the USA there has been a continuous drift toward those providing government services to diminish the strength of those rights and grant more ownership to the government. The USA government has granted itself powers to seize or tax anything the citizens' own or produce in the name of the "General Welfare", and to extend those powers to citizens living in different countries, citizens trying to obtain citizenship in other countries (exit taxes), and to bully other countries into alignment with USA laws.
The actions on the part of USA citizens and corporations to avoid paying taxes is a result of the tax laws being abusive and unfair, coupled with government spending being out of control and unreasonable. The remedy for this is to collect taxes where the product is sold to the final consumer. In the USA, there has been a proposal for what is called the "Fair Tax Plan", but this plan will never be implemented in the USA because it makes too much sense, because it circumvents the tax abuses of special interests, and because it undermines the legislatures' ability to grant and withhold favors to those who finance their power or get out the vote.
Note: The USA Declaration of Independence specifies that the men are endowed by their Creator with certain rights, and among these rights are Life, Liberty, and the "Pursuit of Happiness." "Pursuit of Happiness" was substituted for "Property" to accommodate the anti-slavery crowd who wanted to make sure slavery was not ensconced in the verbage of Independence. This substitution was also made to avoid the prospect that citizens would assume that independence from England would entitle them to "property" (such as land) that they did not acquire through their own initiative and labor.
If a license for commerce is granted by the Crown (in the UK), then it makes sense that the Crown has a vested interest in the profits of that commerce within the Kingdom.
In the USA, corporations are granted their status as an outcome of the rights of citizens to band together for the purposes of commerce. This is a matter of protecting individual rights, and the rights of the citizens to the fruits of their production is not nullified by the recognition of this status. The United States does not own the coorporation; it is owned by the individual investors.
As I said before: The remedies for "tax avoidance" are fair and equitable tax laws, and tax collection at the point of sale.
The top 1% of tax payers earn what - 75% of total earnings in the US? They should be paying 75% of all income taxes. No, 20% is not plenty - even if that figure is accurate. The more you make, the more you pay.
Heh - I went googling for the actual percentage of total income taxes paid by the top 1%. I found a site with a wilder spin that I've read before - it claims they pay 38%, or almost double what you've stated. Which, only goes to prove that someone with an agenda can make any claim they like, and back it up somehow.
Bottom line - everyone pays xx% of their income, no matter how poor, or how rich, no matter how many influential people they bribe or sleep with. Set it at about 27 or 28%, and I'll see no change. Set it somewhere, anywhere - then ENFORCE IT FOR EVERYONE!
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Well, why do large countries sign free trade agreements with tiny little countries? Tear up those senseless agreements and the problem will go away.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
"tax havens that are effectively stealing from the US and European treasuries"
That's glorious turnaround: instead of considering taxation is theft - supposedly it's non-taxation that is theft.
Speak for yourself. My household income is $270K between my wife and I, and we do nothing unethical, unfair or 'shady' when reporting and paying our taxes.
And frankly, we wish everyone else would be responsible and do the same. It's no fun following all the rules and seeing the country devolve into third world status (education, infrastructure, etc) because so many people out there don't see investing in a strong, vibrant collective environment as looking out for one's self.
The top 1% of tax payers earn what - 75% of total earnings in the US? They should be paying 75% of all income taxes. No, 20% is not plenty - even if that figure is accurate. The more you make, the more you pay.
75%? Seems hard to believe. At any rate, the top 1% of taxpayers don't draw on 20% of the budget. They pay more than enough. We don't have a revenue problem in the US - we have a spending problem.
There's a simple solution: eliminate the corporate tax rate and increase sales tax and income tax. That way, all the taxes related to activity within a country stay within that country. And that way, people would realize how much they are actually paying, because whether you call it "corporate tax" or "sales tax", in the end, the people end up paying those taxes anyway.
Bottom line - everyone pays xx% of their income, no matter how poor, or how rich, no matter how many influential people they bribe or sleep with. Set it at about 27 or 28%, and I'll see no change. Set it somewhere, anywhere - then ENFORCE IT FOR EVERYONE!
Trouble is if you setup xx% high enough to be useful, you smash the lower end of the middle class and everyone earning less.
Flat income taxes are regressive. Losing 25% of your income is not a burden for someone pulling in a million a year, but it's crippling for someone pulling in $30k/yr.
If companies are allowed to keep more of their money in the US then that will likely be spent in wages and products that support additional wages.
No, it'll be spent on executive bonuses sent to their foreign bank accounts.
The last few years of GFC (heck, and the preceding couple of decades) have handily demonstrated how companies will act. Huge wage increases for the handful at the top, soaring profits, sweet fuck all for the average worker.
Why aren't the US and Europe exerting more diplomatic pressure on these tax havens
Uh, why aren't they changing their own laws so that these profit-allocation schemes are not allowed anymore? If some country wants to run a low or zero tax rate - that's their business, isn't it? But allowing a company that runs its business in your country to record its profits elsewhere is your problem.
Same thing with Hollywood accounting. Sure they are scumbags for doing it, but what about the scumbags allowing it in the first place?
Assorted stuff I do sometimes: Lemuria.org
The FRAUD here is on the shareholders behalf.
Take Starbucks.
The UK division makes some money and with that buys beans from another company, but the rate is so high that they make almost no profit.
The company in the UK is being fraudulent by buying such expensive beans.
So put the company in the dock and enjoin the parent company to make good the loss.
When the government takes money from people without their consent, it's not stealing, it's euphemistically called "taxation." But when someone figures out a clever way to avoid taxes---legally avoid them, mind you; these companies aren't breaking the law---that's called "stealing" by the U.S. Government, the biggest thief known to mankind.
I normally have nothing good to say about companies like Microsoft and Google, but in this case: Good for them. Starve the beast of every dollar you can.
Liberty in your lifetime
It means government.
Rather odd there.
You randian idiots really don't know jack, do you?
I didn't see that coming. I think the Ed Asner cartoon has had a lot of impact out there and Fox news, bless their hearts, helped to make it more famous by picking out the urination scene as their angle for attack. I don't think I would have ever heard of it were it not for Fox news.
This stuff has been going on for a very long time. From time to time a story on the subject comes out that points out the same things... "it's legal" for example. But now we have fake outrage and a congressional inquiry.
But the thing is, we're talking about congress. They crafted these legal loopholes and stuff. They use them for themselves. Both republican and demograt alike.
Color me surprised if they actually do something about it. It will quietly go away and they will either table the situation for later or they will claim no jurisdiction over the matter of international blah blah blah... not like it has ever stopped them when it came to the RIAA/MPAA interests.
1. UK, France, Germany, etc. cannot declare that I owe them anything because I have no presence there.
I have no presence in the US, not having lived or worked there for 20 years. However, because I haven't (yet) handed back my US passport, the US thinks I ought to be subject to income tax. No other developed country claims the right to tax people who neither live nor work in the country.
The US clearly thinks that US interests and laws trump those of any other country. For example: the US demands access to international bank data, but refuses to provide foreign countries with data from US banks. Typical.
The corporate tax problem could be resolved entirely within US borders, but doing so would require actual effort and sensible legislation by the politicians. However, they might have to offend some of the companies that bankroll their re-election campaigns. Far, far better to blame "international" people and corporations, and to attempt to shove the problems off onto other countries. In any case, the US does not have a revenue problem; the US has a spending problem, and the politicians certainly don't want to make actual, serious cuts in spending.
Enjoy life! This is not a dress rehearsal.
Why aren't the US and Europe exerting more diplomatic pressure on these tax havens that are effectively stealing from the US and European treasuries
Hmmm, let's see, companies are using legal avenues to prevent the government from stealing their profits, and you call that "stealing"? I thought this kind of "logic" was less prevalent in people who are actually capable of putting together the words that form a /. article.
So... Microsoft employs a few sales reps in the UK, but runs its entire European operations out of Ireland (with you know, offices, employees, and historically distribution).
And having the UK profits transferred to where the employees who worked to earn it is... tax dodging?
Where are the usual google koolaid guzzlers and apologists forever trumpetting how google does no evil?
This kind of crap may be "legal", but it sure aint ethical, and it is downright motherfucking evil on so many levels.
Just like the drugs cartels.
The products were sold to UK customers.
The products were delivered to UK customers.
The products are operated by UK customers.
It's like saying "I've sold you a coffee here today, but actually I'm 5000 miles away, so I don't have to pay sales tax on that". In fact, it's almost exactly that.
And, again, nobody has said that any of the listed companies did anything *illegal*. But there are doing billions of pounds worth of business to UK customers and not paying a single penny of tax, unlike their UK competitors doing the same thing with UK employees and UK administration.
It's not illegal, it's just a circumvention of a tax system that hasn't been designed to take account of it. And if allowed to propagate, would mean that every company in the world would operate from a handful of countries that charge no corporation tax, and your personal tax bill would quadruple or more.
If you're doing business selling your products to customers in a country, it's not weird to expect you to pay appropriate taxes on those products the same as if you were based next-door. Not doing so, like the UK currently doesn't, is just a way to lose all the large businesses, lose millions of jobs and lose billions of pounds in tax and (hence) start riots because the people who have to pay the difference instead (i.e. me) get pissed off about it.
It's like me starting up a software firm in the UK, selling millions of units making me billions of profits, but doing so in the US. It would cost US jobs, US tax income and US business competition (by undercutting them because I pay no US tax).
Starbucks in the UK competes with Costa Coffee. Costa Coffee is UK-based, with UK employees, and pays full UK taxes. Starbucks doesn't, because it "pays itself" royalties to use the name to a foreign subsidiary (of itself) that equal 100% of its profits in the UK. Hence, they have no recorded profit on millions of pounds of annual sales, they pay themselves all the "profit" into a country with better tax laws for them (saving them millions), and stiff the competition nicely (thus encouraging them to do the same and cause a mass exodus of jobs and companies off-shore).
It's not illegal. It's bordering on immoral. But it's DEFINITELY a stupid way to tax if a corporation making BILLIONS from your people and stiffing the competition hasn't paid you a penny in tax, which you then have to get from other companies or the population by raising taxes and making the problem even worse.
So, these companies employ competent accountants, tax attorneys and financial managers to preserve their shareholders' earnings. That's exactly what they're supposed to do.: It's called meeting their fiduciary duty.
The real problem is *what* is taxed. Income is bogus. I don't see why, when I go to work, the money I earn is taxed at a higher rate than the income derived by a rich person's trust fund. No, "income" is a bad tax. What we need is a "net worth" tax. 2 or 3 percent should do it for everyone, including companies, because, companies are people too. They have 1st amendment rights according to SCOTUS, let them pay up as well.
Everyone calculate their net worth and pay 2-3% no exemptions.
Is it really the case that zero-tax havens like Bermuda and the Cayman Islands are 'stealing' from countries like the US or UK? They are providing an alternative to double-digit corporate taxes in other countries, but can they really be accused of stealing if they are charging 'zero' in taxes?
Was Microsoft 'stealing' from Netscape when MS bundled a browser with the OS for free?
Do food pantrys 'steal' from grocery stores by giving away what the grocery store sells?
Ken
It's become the mantra of angry trust fund anarchists. If you don't like the laws of your own country, change them. Even Warren Buffet, while he's extolling the virtues of rich people paying more, is massively invested in offshore tax havens BECAUSE IT'S LEGAL TO DO SO.
Because where else would US politicians offshore their income? http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts
I'm NO friend of Mitt Romney - to put it mildly. But let's not blame him for something that's not his doing.
1) Because Romney was running for president, US law REQUIRES he put his money in a blind trust.
A blind trust and offshore account are two entirely different things.
A blind trust is designed to prevent you from being exposed to charges of insider trading by buying or selling stock in companies you have insider knowledge about. You can do that without having to hide it overseas in countries where the US tax man does not know how much is in there or what interest is being paid on it.
I dont read
We don't have a revenue problem in the US - we have a spending problem.
You've bought the conservative lies hook, line, and sinker.
The fact is, while this country is spending too much on its military (more than the next 13 military-spending countries combined), its main problem is, indeed, a revenue problem. The tax rates and the tax revenues as percent of GDP are lower than they have been at any time since the Great Depression.
So unless you are one of those who honestly believes that we'd be better off with, essentially, no federal government at all (in which case I disagree with you, but at least respect you for having beliefs consistent with your policy preferences), we need taxes to be a lot higher than they are if we want to continue to function as a first-world country.
Dan Aris
Fun. Free. Online. RPG. BattleMaster.
why aren't people going to their headquarters with rocks ?
Why aren't the US & England lowering their corporate tax rates so the companies in question no longer have an economic reason for sending profits off shore? Lower rate will increase tax revenue. Duh. Too much to expect from government?
ive said it before and i'll say it again.
pop a couple of these expensive warships we pay for just off cayman, bermuda, bvi and watch what happens.
Flat is flat. Regressive is regressive. The meaning of regressive taxation is that the percentage of income paid as taxes goes down as income raises.
Consumption based taxes are usually regressive. I would be curious to know if the US has a regressive or progressive tax policy after summing all taxes and involuntary contributions. I bet it is regressive, primarily due to capital gains and the use of tax shelters.
Zero tax havens shouldn't exist, period. If Google can park their lucre for nothing, you really think drug, sex, and arms cartels aren't as well? If Bermuda, et al are touting tax-free havens, I doubt they do much heavy lifting in 'following the money', if you will. Stop giving cockroaches easily accessible dark corners.
Get rid of all existing taxes and introduce one low automatically collected transaction tax.
No filing, no loopholes, no collection problems, no bureaucracy (or at least dramatically less).
May be this http://www.apttax.com/ is the solution.
That would reduce the taxes on the top 1%, not increase them.
Plus it is hard to define "income". You set up a company of which you are the head and instead of working for a salary your real employer pays the company. That money gets business rates, not personal tax rates. Then the company buys a nice house on some island somewhere and offers free summer stays for its employees. It buys you a private jet and writes it off as a business expense. It also pays you in cash, but in some tax haven so you don't have to pay US income tax.
That is the fundamental problem with trying to tax rich people. Most of us get paid a salary or via a contract so it is easy for the government to see exactly what we earn. Rich people have all sorts of assets and arrangements that make it much harder to tax them effectively, so even if you a flat tax rate it wouldn't really help. The people with the most would still pay substantially less than the rate you set.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
He could just have told the guy managing his blind trust money not to be a dick and pay a reasonable rate of tax on it. The guy wanted to be President of the United States, the least he could do is lead by example... Unless that was in fact what he was doing. Ah, I see now.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
What is the point of enabling political sociopath's when we can, instead, deal with the chaos of free markets? It's like trading the fresh air for Mustard Gas... The fear mongers have instilled a constant thirst for a hierarchical society, which as we have proven in the bazaar, totally works against innovation and civilised progress. In the US it is your constitutional duty to NOT pay the treasonists who currently invest our government. I celebrate any corporation doing the same!
But the point of a blind trust is that you don't know what the trustee is doing with your money, and you can't tell him what to do; so the trustee could very well consider that he has a fiduciary duty to reduce tax liability by placing the money offshore.
Let's go back to the birth of this country. There were no taxes. There was no national defense. When someone attacked us everyone picked up their gun and fought. There was no welfare, or unemployment. People worked as hard as they could, and in times of need folks from the community would help out. Employers rewarded hard work instead of taking it for granted. Employees had respect for their employers and did their best. At some point we started to shift what was considered a personal responsibility and civic duty on to the government in exchange for tax funding to support it. At the same time greed started to override responsiblity both in employers as well as in employees. Reflect for a moment if you will on how that's worked out. Every program run by the government has waste to varying degrees, but most of it is massively excessive. They're not even trying to control it. It takes 10 people to do the job of one. It takes mountains of paperwork to do the most mundane of tasks, and while this is supposed to create accountability it really doesn't because we still have rampant fraud and abuse.
The focus here should not be taxes paid by corporations. Yes, corporations get a lot of perks. But they also provide a lot of benefits. Think for a minute about what would happen if every corporation in America left. The price of everything would skyrocket. Food, clothing, fuel, services etc would all become unattainable save for the elite. Think about all of those people employed by those corporations. They'd all be out of a job. Think about the tax dollars that they do pay into the government. Not all of their income is funneled through offshore accounts. Take the time to go look up what percentage of tax dollars corporations currently contribute. I know it's fun to bash those guys because after all they're rich and we're not so they should just be giving all of their money to us anyway. But it gets pretty scary when you start to think about how much we rely on them. If the corporations were to decide to move their entire operation out of the US because of hostile policy it would collapse our economy.
For micro example of this see California for the past 20 years. Look at what they have been doing, and look at where they're at now. They started out trying to create all these programs to make life comfortable for everyone regardless of their ability to contribute. They kept raising taxes and increasing regulations on companies. Eventually the companies said "_ you" and moved their operations elsewhere. Now they are going bankrupt, and having to raise taxes further not on the rich, but on everyone just trying to maintain their debt. If we continue down this path it's going to happen on a national scale.
It appears that everyone only compares themselves to those that appear richer and not those making less. We look at big companies that earn a lot of money finding ways to save their money. How is this different than anyone of us that looks for ways to cut our taxes and avoid paying more than we have to pay?
If it is legal (and it is), don't blame companies that are owned by stockholders for trying to make more money by avoiding taxes they don't have to pay. If you want, make it illegal, then complain if they do something illegal.
Just gotta wonder if any of you blame-throwers are doing all you can to pay the most amount in taxes you can...
Simply allow the US to define a company as being a US company and tax every penny offshore at a higher rate than if they had kept everything onshore. Those who try to set up complex avoidance devices could be charged with treason and thrown under the bus. Then we can watch all the rats swimming for their home shore.
Regressive means that it affects those on lower incomes more. Because as a percentage of their income they spend more on necessary expenses (housing, food, heating, etc.) a flat rate tax means they effectively pay a greater percentage of their disposable income than the rich do. Go back to school.
"Whilst the tax arrangements are strictly legal". So every government, despite its own laws, feels that it is ENTITLED to a companies profits. Which is why, in the very near future, all companies will be state owned and run. Apple, Starbucks and Google, as run by government bureaucrats.
Take a look at your payroll taxes, state income taxes, federal income taxes, tobacco taxes, alcohol taxes, road taxes, property taxes, ad valorem taxes, telecommunications taxes, hunting permits, fishing permits, building permits. By the time you actually live your life, easily 30-50 percent of the average American's income goes to the government. Even GOD ALMIGHTY only asks for a tithe (a tenth).
See, the thing is, you can have freedom and individual property rights, or not. Politicians will decry all companies that provide valuable goods and services as profit-mongering evil, whilst they fill their pockets with your money and deny you the right to buy a 32-ounce soft-drink, to choose your own doctor, to own a firearm, or to move around your own country without approved paperwork. So the next time a politician is explaining how they are protecting you, the poor unfortunate little guy, remember that they are selling you the fact that you need them. They are selling you the idea that everything will be better if you hand over your choices and authority in your own life, so that they can make decisions for you.
They know best, and you don't need a 32-ounce cup, you mindless peasant, because it will make you obese and less productive for them. You don't need a firearm, because they will protect and control you. You don't need to choose your own doctor, because they will determine how much and what type of medical care you deserve. You don't need a retirement plan, because they will determine when and if you retire and how much you will live on. You cannot hunt, or fish, or drive, or build, or farm without their express approval and being charged for the privilege. Welcome to 2013 in the USA.
Actually, he DID pay his taxes... Showed that he did, even.
(Oh, that's right...your mind's made up...don't confuse you with the facts of the matter...sorry...)
Flat income taxes are regressive. Losing 25% of your income is not a burden for someone pulling in a million a year, but it's crippling for someone pulling in $30k/yr.
Easy for you to say, it's not your million. What if that person has a million or more in costs? Suddenly 25% is crippling to them too.
Oh, I get it, you don't care that it's crippling to them. Nice selective compassion there...
Bottom line - it's their money, not yours (both the 30K'er and the 1M'er). Stop telling yourself that it's "yours" under the banner of "fairness" or "progressive".
Well said! ALL corporations and wealthy individuals have access to financial experts (tax lawyers) whose job it is to minimize tax exposure. Like it or not, this is perfectly legal. In spite of all the outcry over "fairness" and "paying your fair share", people will ALWAYS want to keep as much as they can. I hope that everyone realizes that a socialist society has TWO classes, not just one - the super rich and powerful (who will always have access to these tax havens) and EVERYONE ELSE. Why do you think that so many rich and powerful people are liberals (progressives, whatever)? They can give their wealth to the government any time they want by simply donating it to uncle Sam. They want to homogenize the middle and lower class into one class. They never intended for this process to cost them one dime. So when the libs are talking about "the rich paying their fair share", they are referring to the middle class. Unless the middle class understands this, it is on the road to extinction.
Do you take a deduction for home mortgage insurance? If so you are doing it because the tax code allows it. What is happening to Romneys money and the 1%ers is the same thing. It is 100% legal and they are doing it. If you want to take a stand and complain about corporations doing legal things to avoid paying more taxes, do not take the mortgage interest deduction next year.
That is a dishonest, or a naive very question and statement.
We are talking "profits" or "income" taxes. Businesses are taxed on net profit, always have been. If you gross income in 1.2 million, and your expenses are an even million, then your income is only .2 million. You cannot, you will not, be taxed on the 1.2 million.
Your apparent misunderstanding is part of the GOP's propaganda. They want to scare small business owners into believing that they will be taxed to death, and the scare tactics are working.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
You do know that sales taxes are ridiculously regressive, right?
If someone who makes $50k/yr spends $25k of that on taxable goods, that's 50% of his income. Do you really think that someone making $500 million/yr spends $250 million on taxable goods? I mean, it would be great if they did—that would be some damn good economic stimulus right there—but in reality, the richer you are, the smaller a percentage of your income you spend on taxable goods. Generally, the rich put large chunks of their income into various financial vehicles.
What all this means is that with a sales tax being the sole method of raising money for the government to operate, the poorer you are, the higher your effective tax rate will be. Sure, the rich will pay somewhat more in absolute terms than the poor, but vastly less than they would with a properly-operating income tax system.
Furthermore, because of this, total tax revenues would drop precipitously. Now, you may be one of those who believes that would be a good thing, but me, I like having roads, bridges, police & fire services, a social safety net, and all the other stuff that a properly-functioning first-world government provides.
Dan Aris
Fun. Free. Online. RPG. BattleMaster.
Why? Hmmm... Lemme think.... Oh, that's right - these giant corporations OWN the fucking government as they pay for the politician's races. And many of these politicians end up sitting on boards of directors for these same corporations after their stint in congress where they make the connections that enable these huge corporations to extract profits.
Duh.
TFTFY
Shoes for Industry. Shoes for the Dead.
Politicians, corporations and rich people immediately point out that all of this activity is 100% legal by the current US tax code. Certainly immoral - but who cares? They're running away with all the money, that's all that matters to them.
Do you itemize your deductions? Have you ever altered your behavior over the course of a year in order to be eligible for a specific deduction at tax time? Declared your personal vehicle as being used for business purposes?
None of these things are immoral, all are legal, and none of them are required by law. At what point on the greyscale of "complex to implement" does tax avoidance become "shady"?
"Space Exploration is not endless circles in low earth orbit." -Buzz Aldrin
But...
It would also FAIRLY tax the 50% that pay ZERO and those that actually profit from a few thousand dollars from EIC when they file their federal tax return each year.
50% of the voters would never vote for someone that wanted that. See the problem? That's a sizable chunk of voters you can control and manipulate on a whim.
I have no presence in the US, not having lived or worked there for 20 years. However, because I haven't (yet) handed back my US passport, the US thinks I ought to be subject to income tax. No other developed country claims the right to tax people who neither live nor work in the country.
Yes, but you still maintain the right to return to the US at any time, and if whatever country you're living in goes through a political revolution and you run to the embassy, there is a decent chance that they'll fly you out even under gunfire. Certainly the US passport will carry weight in negotiations.
If you don't want to pay taxes, just repudiate your citizenship.
What exactly do you think the word "citizen" means? Citizenship is more than a relationship of convenience. It is supposed to be about a community of people who pledge to come to the aid of one-another. If you have income, then you've pledged a part of it to assist the rest of the community. If you don't want to participate, then just register that with the nearest embassy and you (and the citizens of the USA) are free of your pledge.
These companies don't pay tax anyway. Remember GE paying no taxes and getting $14 billion back, a few years ago?
Raise taxes on the rich, eliminate corporate taxes, create more jobs in the US (bringing in even more revenue).
Oh, I get it, you don't care that it's crippling to them. Nice selective compassion there...
sorry, "selective compassion" was poorly worded; "class bigotry" is what I should have said.
As much as it burns my butt that some of these companies can get away with paying a pittance (or no) taxes, "fair" never even enters the equation.
"Fair" is whatever they can get away with, within the framework of existing tax law.
Don't like it? Don't bitch. Fix the laws.
Chas - The one, the only.
THANK GOD!!!
May I also point out that these corporations are under ZERO legal, moral or ethical constraint to pay the maximum amount of taxes possible. They have a fiduciary responsibility to their shareholders to minimize their tax liability.
Chas - The one, the only.
THANK GOD!!!
I think the OP's point was that you could replace "US" with any other country, and your "benefits of citizenship" argument would still stand. Yet, none of these other countries require that you pay income tax if you neither live nor work there. The US is still an anomaly in that regard.
Minor difference. Some of us do it because if we don't, then I don't have food next week. The 1% do it so that they can put another layer of chrome on the prow of their solid gold yacht.
Honestly, I would absolutely LOVE to, at one point in my life, feel the joy of distinctly NOT living paycheque to paycheque... but I honestly believe that this will never occur.
We just invade the tax havens and remove their ability to function. If a new one pops up, INVADE IT!!!!
Not many of those corporations relish the prospect of losing the right to do business in the USA.
And since that will never happen you have no point.
And if the rich leave the country, who gives a shit.
Are you really so stupid as to think they will leave the country? Only the income will. It's what has happened already, and is accelerating.
People with lots of money have the ability to do a lot of things that people without a lot of money cannot... a simple truism that it seems many on SLashdot are unwilling to recognize.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You are ignoring the huge and lucrative gray area of avoision which is the fuzzy area between legal tax avoidance and illegal tax evasion.
Literally thousands of tax attorneys spend their entire careers coming up with borderline schemes whose legality is undefined and is constantly being determined and redefined by the courts.
Man, you really need that seminar!
Flat is flat. Regressive is regressive. The meaning of regressive taxation is that the percentage of income paid as taxes goes down as income raises.
Fine. I'll take flatness in utility over flatness in rate because that's closer to "economically just" (i.e., the same level of economic pain is felt by each member of the taxpaying community) and reduces wealth inequality (this being important because I want to halt our slide - and eventually reverse it - towards third world inequality levels). I know that's harder to calculate than a flat rate tax, but I'm willing to live with an approximation because I believe the results are ultimately better.
That is all.
Then include a single deduction (the minimum living wage deduction) that applies to everyone. the first 10-20K is untaxable. Solved.
He could just have told the guy managing his blind trust money...
...absolutely nothing. Blind trust. Blind.
Dewey, what part of this looks like authorities should be involved?
The difficulty in choosing something like "net worth" is that it is essentially a self'-reported value, unless you want to give monitoring powers to the IRS or some other third party to vet your claims.
And even then, what constitutes to "net worth"? If we're talking assets held minus liabilities owed, then my student loans should keep me tax free for several years after I graduate next summer. What assets would be counted toward calculating net worth? How would I go about determining the value of my books, or my computer software? I know what I paid for my computer 6 years ago, but how much has it depreciated?
If, by extension, you're suggesting that people start recording and monitoring what they own and at least the aggregate value of it, similar to what businesses do, I'm all for it. Too many people don't know what they own, or if it's worth anything.
US citizens are responsible for paying income tax on all income earned, regardless of where they earned it. It's actually a big problem for expats who then end up double taxed unless their host country gives them some sort of break for paying US taxes and I don't believe many (or any?) of them do.
And frankly, every single one of us does it when we can get away with it, as well.
I don't. I just met with my accountant for my company's year end books and didn't do any of the things I knew I could get away with which were not legitimate. For example, I had a few thousand dollars worth of receipts that were non-business expenses but would have looked legit. I did not file them, because I am an honorable man.
Don't project your own dickishness onto others.
Stop-Prism.org: Opt Out of Surveillance
I've got it, since corporations are people too, I will funnel my income thru bermuda too!
inb4 the "nuh uhhhh" you're forgetting sales tax, OASDI, etc. No, (s)he's not. The GP's specifically talking about income taxes and while the number isn't 50% that pays nothing it's a lot closer to 50% than 0%. Which is problematic.
> I have no presence in the US, not having lived or worked there for 20 years. However, because I haven't (yet) handed back my US passport, the US thinks I ought to be subject to income tax. No other developed country claims the right to tax people who neither live nor work in the country.
I already explained that this is completely backwards. This rule should apply to corporations, not individuals.
___
If you think big enough, you'll never have to do it.
Our current crop of US politicians has ramped up the class warfare feeling in this country to the point that many believe that everyone (or every company) that makes more money than they do needs to pay more in taxes. Google's "fair share" of the tax burden is satisfied when they comply with the tax laws and pay whatever the laws say they must pay. If you don't like the tax structure, elect new representatives who will change it. If I was big enough to move my income to an offshore tax haven legally (as Google appears to have done, and also the Kennedy family trust, FWIW) then I would do it. No one wants to pay more than the legally required amount of tax. Do they?
What a messed up concept. I worked really hard all summer and stored food for the winter. I should give a larger portion of that then the people that sat around all summer and looked at me. To be honest I think the whole idea of taxing what you earn is idiotic as well. tax what people spend. Sure you will have a bunch that save money but you will have a stronger society that can handle the problems that come along.
It's like 49% and I clearly stated federal income tax. It is still a tax and the federal government still has bills that need to be paid and everyone should be paying them, not just the "other" 50% of the people.
No, problem moved slightly up the income ladder.
Then they should manage their money better.
I care whether it's crippling for someone to meet the expenses of a basic, comfortable lifestyle.
I don't care whether someone's life of luxury is marginally impinged by an inability to buy a fourth.
I never said it was "mine".
Precisely this. A service/licensing/sales tax between corporations just like there is for an individual's purchases. With a higher tax rate when money goes from a national corporation to an international corporation (i.e. when money leaves the country). Preferably high enough that no profit is made.
Though include an increasing tax on profits, since those represent money taken unnecessarily from the public.
Nope. Flat taxes are just flat. The gasoline tax is regressive, because it takes a higher percentage of income from those with lower incomes. This endless redefinition of the tax lexicon by those who favor highly progressive taxes is intellectually dishonest.
What's the remaining problem after that? Once you've subtracted out the minimum living wage from being taxed, how can taxes on any income above that be "crippling"?
You can establish a blind trust with restrictions on the activity of the trust, such as investing in specific sectors, or in specific regions. It's the specific transactions that are "blind".
you most certainly can tell the trustee not to use off-shore tax havens if you so choose.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Read this: http://en.wikipedia.org/wiki/Regressive_tax
Learning is better than going to school.
tl;dr;hate learning;
Regressive taxation has nothing to do with the effect it has on humans. It is entirely about percentages and there is no room judging what is fair or unfair. Regressive is not a value judgement.
At any rate, the top 1% of taxpayers don't draw on 20% of the budget.
No, they don't. They draw on almost 100%. Who's running your telcoms and radio and TV stations? The 1%. We need the FCC to keep them in line. Who owns those big trucks that haul everything and cause most of the road damage? The 1%. Who leases public lands for oil exploration? The 1%. Who need the coast guard? The 1% almost exclusively. Who does the military protect? The 1%.
Who need the FBI? Not the bottom 1%! In fact, the FBI and DEA and BATF only benefit the 1% and the bottom 1% fear them.
The bottom 1% (probably the bottom 10%) use almost no government at all. They don't have any use whatever for the police, because if a poor man calls the cops he's usually the one to go to jail (and your local government gets federal grant money for cops and cop equipment). Social programs for the poor are very niggardly in the US compared to civilized nations.
When my grandfather was a young man, only the rich paid federal income taxes. How about we go back to doing it that way? Government benefits primarily the rich, the rich should be paying the lion's share of it (if not all, like in Grandpa's day).
We don't have a revenue problem in the US - we have a spending problem.
We have both a spending and revenue problem. I'd legalize, tax, and regulate drugs, disband the ATF and the DEA and the TSA and most of Homeland Security, but I'd keep FEMA (who benefits the most in a catastrophe, the guy with the ruined ten million dollar house filled with expensive items, or a renter whose most expensive posession is probably a used car? I'd cut the military in half or smaller. I'd cut most grants, and all grants to corporations. What would you cut?
But we can't cut our way out. As another poster already mentioned, federal taxes are lower than at any time since Truman. The rich are just being the greedy, selfish bastards one has to be in order to become or stay rich.
Free Martian Whores!
Where may I obtain a copy of this "pledge".
FWIW, this ridiculous income tax situation is one of the very few reasons that I'm resisting the idea of becoming an American citizen despite the fact that I never plan on leaving.
Pay taxes for your total asset in relation according to your "income in the country vs. total income worldwide"
couldn't that solve the whole problem in a fair way?
(Likely) insufficient tax revenue to meet expenses. A system designed to accelerate wealth gaps and minimise class mobility.
I didn't say they'd be crippling in that context. They'll certainly be disadvantageous, however.
A flat income tax is regressive in the context of the entire tax structure.
If flat taxes are so fair, how about we have a flat tax on assets instead ?
(Likely) insufficient tax revenue to meet expenses. A system designed to accelerate wealth gaps and minimise class mobility.
Likely, based on what? With a flat-tax and no deductions (save the one I mentioned) I believe the government would end up with more revenue than it does now. It would also become (due to the single deduction that helps low-income people more) a progressive-tax as the more you make the higher your effective tax rate goes (until it flat-lines at the flat tax rate). Not to mention that it would allow most of the IRS (and its expenses) to go away.
Believe ? Based on what ?
Or are you advocating a flat tax rate up around the 30-35% mark, where people in the upper income brackets effectively end up now ?
Or you could just have a progressive tax system in the first place, without trying to complicate it with deductions and other shennanigans.
Surely you jest. There's plenty of other taxation that needs to be evaded other than just income tax.
a company that you are the sole share holder in the dividends get taxed at 15%
You're talking about illegal things, and passing them off as legal. I'm sure if you have a house, you took a deduction for the mortgage.
"First they came for the slanderers and i said nothing."
I applaud! These companies are doing the best legal accounting in the world! And it's a service too. Government always overspends, and what it spends, it spends inefficiently (compared to a free market). By paying the minimum legal required taxes, they are preventing government inefficiency, indirectly. If you find yourself outraged that these companies only pay a certain amount of taxes (in addition to the income taxes that their employees pay), ask yourself: when was the last time you intentionally paid more taxes than you had to? When was the last time you volunteered money to the IRS so you could help out the disadvantaged?
The difficulty in choosing something like "net worth" is that it is essentially a self'-reported value, unless you want to give monitoring powers to the IRS or some other third party to vet your claims.
This ship has sailed, the government already knows your net-worth. That is a different argument, of course, and I probably agree with you.
And even then, what constitutes to "net worth"? If we're talking assets held minus liabilities owed, then my student loans should keep me tax free for several years after I graduate next summer. What assets would be counted toward calculating net worth? How would I go about determining the value of my books, or my computer software? I know what I paid for my computer 6 years ago, but how much has it depreciated?
It sounds like a daunting task, but it isn't really. Most people make this accounting for insurance and tax purposes already. If you owe more than you own, then you pay no tax.
If, by extension, you're suggesting that people start recording and monitoring what they own and at least the aggregate value of it, similar to what businesses do, I'm all for it. Too many people don't know what they own, or if it's worth anything.
I'm pretty sure that a study would find that some number, say $30,000 single and $50,000 married, covers most people in the united states when it comes to non-accounted assets. Everything else generally is on a ledger somewhere that is already reported to the IRS. You have NO IDEA how much privacy people have lost since Nixon's "Drug War."
No, they don't. They draw on almost 100%.
This is idiotic. You have no idea what the government spends money on, do you?
In New Zealand, things which are purely for tax avoidance are illegal. They get banks for that all the time.
...and as a Kiwi, I'd like to respond by saying [citation needed]
..Mullah or Pope, Preacher or Poet, who was it wrote: "Give any one species too much rope and they'll fuck it up"?
I've yet to see it written down in full. Nevertheless, those around you will use force upon you to ensure your compliance with it. In the end that's all government is, but I've yet to see a better way to live. To try to get rid of government is to simply accept the government of the local warlord.
*sigh* ... another belief crushed.
If they're obeying the law, how is it "unfair"?
More accurately, the government wants the customer's money, because sure as shit M$ isn't retarded enough to take the tax money out of dividends.
But of course, liberals have an entire religion based on fantasy economics.
Fair? You like cotton candy? That's what you get at a fair..
The 75% income and 20% taxation are misleading to the point of being an outright attempt at deception.
In 2009, the top 0.5% income-earning people in the US paid ~97% of the total income taxes that the government collected as INCOME TAX (meaning we ignore taxes on businesses and entities). Meanwhile, no, the top 1% only earned ~50% of the total personal income.
And frankly, if anyone should be "paying their fair share" it's the people who REFUSE to work...and yet the government sees fit to take 30% (after state/fed/local) of my meager $40K and give it to people who WON'T work, and all because it solidifies a voting bloc.
I'm all for taking care of the needy, but a vast percentage of the people on govt assistance are just lazy. The people who actually NEED assistance are strangely "ineligible" to get aid. (Apparently working two jobs just to make a rent payment and have not-quite-enough food for your kids makes you ineligible for govt assistance).
Bottom line - everyone pays xx% of their income, no matter how poor, or how rich, no matter how many influential people they bribe or sleep with. Set it at about 27 or 28%, and I'll see no change. Set it somewhere, anywhere - then ENFORCE IT FOR EVERYONE!
Trouble is if you setup xx% high enough to be useful, you smash the lower end of the middle class and everyone earning less.
Flat income taxes are regressive. Losing 25% of your income is not a burden for someone pulling in a million a year, but it's crippling for someone pulling in $30k/yr.
The "lower end of the middle class" are NOT middle class, they are WORKING class. That self deception and desire not to be associated with blacks and latinos is the main reason American workers are so passive and ignorant of the screwing they are getting from the top 10%.
Whilst the tax arrangements are strictly legal, there has been outrage on how companies are avoiding paying their fair share of tax generated in the country.
So, if the country's tax laws do not require these companies to pay their "fair share", then how exactly does one define their "fair share"??? Exactly how much more should they pay than what they are legally obligated to??? How large of an over payment would satisfy these critics???
There is such a thing as a "Minimum ObligatoryTax". Many countries use this device to ensure those fine bunch of capitalist pay something. Including the US. As to fair share, the state should squeeze the golden goose until it stops laying eggs, then back off a few percentage points. There is lots of money to go around.
Income is by definition a transaction--there are two parties, each with an obligation to report. Your wages are my labor expense, and you can bet I'm going to report the expense to reduce my taxable income. So it's hard for a person or company to unilaterally not report income.
Assets, on the other hand, can be hidden. Pretty much anything that doesn't require registration will do. Today I keep my money in a bank, but if I had to pay a 2% annual tax on it, I could evade that by keeping it in physical cash. Considering I can't earn 2% in interest, I'd come out ahead. And I can do that without anyone the wiser. So can everyone else.
Current tax laws have the top 1% paying less for each $1 they earn than the rest of us. The middle class worker will pay $6 for every $100 earned, the top 1% pay $2 for every $100. Upside down isn't it? How is there $1 different from your or my $1? Simply because they make more of them than we do?
free summer stays for its employees
Renumeration. Taxed as income.
It buys you a private jet
Renumeration. Taxed as income.
It also pays you in cash, but in some tax haven so you don't have to pay US income tax.
Renumeration. Taxed as income. If there is tax-treaty with that country, tax already payed in foreign country on that income is tax-deductable (or vice versa).
flat tax rate it wouldn't really help. The people with the most would still pay substantially less than the rate you set.
And while I'm at it, I'll suggest a _progressive_ tax rate.
Is Tax a Cost?
What do you think a company does when it's costs go up?
They are accountable to their shareholders to produce an acceptable rate of return to their stockholders.
They raise prices in order to maintain the same rate of return. If they don't, the shareholders put their money elsewhere. Bye Bye Jobs
You should expect a BUSINESS to everything it possibly can to maximize the rate of return to the investors who put up their money. In fact, you should DEMAND it.
Please, please leave your emotions at the door when you are talking business. Business is about the NUMBERS not the EMOTIONS. Some folks are greedy and evil. Some of these people have jobs and do greedy and evil things. In the long run, they do not prosper - because as a whole we don't like doing business with evil greedy people.
And while I am ranting... This whole idea that a large group of people called a "corporation" are evil, whereas a large group of people called "the government" is not, is so completely and utterly at odds with common sense it is beyond my comprehension. Government, by the way, is about BUYING VOTES - That's why they can't manage a budget. They have no reason to manage a budget. Their goal, unlike a Business, is buying your vote at the lowest possible cost.
Flame away I care not. Try thinking with your BRAIN and not your HEART.
Murphy was an optimist
So really, if all of these mega corporations were somehow forced to pay every last penny of tax that they were legally bound to pay, then governments would be receiving massive cash injections via those taxes.
At the moment it certainly does feel like the common people get taxed on income, fuel, alcohol, houses, tobacco, and anything else that the government can think of taxing people for, and that those taxes get increased every year because the government is always short of cash and needs a bit of a boost.
Wouldn't it sort of fix the problem if megacorps were paying the taxes they owed? Purely hypothetically of course, because i'm aware that government would never _lower_ taxes on fuel just because they were now receiving massive tax monies from megacorps. Hell, they'd probably just keep raising them at the same pace anyway.
And who doesn't believe that the tax system is totally corrupt anyway? Massive sums are probably siphoned off, hidden away, spent on items the public would deem questionable at best. I mean, i've never heard of any transparent statistics that are completely accountable for, and could easily be verified by the general public like say:
we have 9 million people working in City. The income tax from these people was £X in 2012, Fuel tax income to the government was £X etc.
Total tax income to the government in 2012 was £X.
We spent it on:
transport
------------
£X bus maintenance
£X roadworks in Cities 1,2,3
healthcare
-------------
£X hospital building maintenance at City1 general hospital
£X etc
you get the idea. Seriously, if anyone knows that these statistics exist in black and white for any government, please say so.
Getting into politics and climbing the ladder of political success is in my eyes an ancient human mechanism of gaining power, influence and personal wealth. There is no place in that mechanism for pure altruism, or the concept of "for the good of the people". Sure, the money does get spent on public infrastructure to a large-ish degree, but that is out of neccessity for keeping the balance of power within the political elite, so that the mob does not rise. The concept of altruistic government seems to only exist in Star Trek.
"Everyone knows that vi vi vi is the number of the beast" -- Richard Stallman
...are thinking that the Republican idea of closing tax loop holes is not such a bad one.
There are a lot of statements here about what we need to do to reform the government or the tax codes. Unfortunately, changing the tax code will just change behavior in response, which puts a cap on how much can be squeezed out of the stone. I'll offer a different view: all this discussion of which percentage should be paid by which entity is pointless. The government doesn't need any more money. If we somehow managed to collect significantly more in taxes from corporations like Google (very doubtful), they would just squander it like they did the money they already collected.
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
"Why aren't the U.S. and Europe exerting more diplomatic pressure on these tax havens that are effectively stealing from the U.S. and European treasuries by allowing profits that did not result from activities in Bermuda or the Cayman Islands to be recorded as occurring there?"" More effective measure: If your base is in our shores, pay us the tax.
"Why aren't the U.S. and Europe exerting more diplomatic pressure on these tax havens that are effectively stealing from the U.S. and European treasuries by allowing profits that did not result from activities in Bermuda or the Cayman Islands to be recorded as occurring there?"
Thats contradicts the arguement liberals use to try and tax internet sales even if the seller doesnt have a physical presence in that state. You cant present that arguement and then ignore it when its convenient.
It's very simple
"Their fair share" always means "what they're currently paying, plus my fair share".
You have no idea what the government spends money on, do you?
I live in Illinois' state capital. Half the people I know work for the government. You know where most of the money goes? Politicians' rich cronies; the Bloom Building, for example. The government, under Governor Thompson loaned a rich guy (who is now in prison, got caught up in the Blago mess) the money to build it, then paid rent on the building until it was paid off, then bought it from him at a very inflated price.
That's where your tax money goes -- to the rich. Food stamps don't benefit the poor, they benefit the poors' employers, who would otherwise have to pay more.
Section eight housing doesn't benefit the poor, it hinders them while helping their landlords (I've known Section 8 landlords and tenants). An apartment that might fetch $300 on the open market rents for $250, the landlord gets $500, and rents are driven up for everyone, especially the poor. Who, by the way, are paying the landlord's property taxes and interest as part of their rent, while the landlord gets to deduct the taxes his tenents paid for him from his income tax.
The God damned system is rigged. You, sir, are the one who has no damned clue where your tax money is going. It's going straight into the pockets of the 1%.
Free Martian Whores!
Yup, that works, and it works fairly to all.