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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?"
He was until relatively recently, unlike others who were born with silver spoons in their mouths.
I think he remembers his apartment dwelling days quite clearly.
"To those who are overly cautious, everything is impossible. "
The crux of these loopholes seems to be that by and large, corporate taxes are levied on net profit, not gross revenue. A company will make $10B in the US, then license something from a Bahamanian subsidiary for $10B, resulting in a profit for the US component of $0. If they had to pay on the total revenue, losing money to themselves would only increase exposure (since the US and Bahamanian divisions would both pay tax on the same $10B).
In the example of a US-based construction firm that made some money through a Canadian subsidiary, Canada would get the tax on that part of the work and the US on their domestic revenues.
The problem with this taxation model is that it would be a heavy weight on young companies; businesses generally run losses for the first several years of operation, even without paying taxes.
Obviously this is my layman's view of the way corporate income tax works; I assume that there is a certain complexity to the way that revenue and profit are calculated for tax purposes, and that there are frictional costs associated with various maneuvers.
"Because Science" is one step from "Because old book". Try "Because of my experiment testing my falsifiable assertion".
Perhaps you missed Obama filling his cabinet originally. He had to go through 50 people to get 20 from the DNC that had ACTUALLY paid taxes. Daschle failed to pay taxes, a woman named Hillary (not Clinton) was rejected for failure to pay taxes, Tim Geitner was still confirmed even though he didn't pay taxes. Go into Congress and you can find more, like Charles Rangle who didn't pay taxes. There was even a stink about John Kerry mooring his boat in Rhode Island to avoid state taxes from Mass.
Your point is invalid because its the DNC that raises taxes and its the DNC politicians that constantly fail to pay taxes.