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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.
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.
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.
As a publicly traded company, you risk being sued by your shareholders if you do NOT use such tax arrangements as soon as you learn about the possibility. So putting the blame on Google/MS isn't exactly rational.
Problem is that the rich make the laws. So they adjust the rules to benefit themselves unfairly.
Hey there poor person, why don't you have your investments setup in IRAs and 401(k)s? You should get into the consulting business and write a few books. Capital gains taxes are rather agreeable. What's that you say, you can't afford food? Well, if you'd taken my advise ...
This signature is false.
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
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.
Considering how the tax money is spent it's probably more evil paying taxes then avoiding them...
Be seeing you...
Trouble is, governments can be sociopathic bureaucracies just the same.
Circumcision is child abuse.
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
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.
"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.
...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
That's a common fallacy. There is no US statute, state or federal, that requires "maximising shareholder value"
Why would anyone engrave "Elbereth"?
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."
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.
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.
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!