Slashdot Mirror
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?"
It is easy to figure out how to hurt "shell" companies. All you have to do is tax transfers of wealth between corporations. Period. Taxing income is stupid, because all you have to do is hide the income long enough to get it to an offshore holding company in some island in the pacific. BUT if you put a 1% (or whatever) tax on money going out of the country, corporation to corporation, and you have all the revenue you need. Put a tax incentive of .75% tax break on any US corporation bringing money from offshore, and you'll spur the economy.
Tax the things you don't want, incentivize the things you do want and you can fix the world. Problem is, most politicians do the exact opposite, by taxing productivity and rewarding failure. The fix is simple, but we are unwilling to mess with status quo too much.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
The problem is that the 'transfers of wealth' are the same kinds of transfer as normal purchasing. When a company pays another company to build widgets for them, they transfer money. When they license a patent, they transfer money. When a company like Starbucks sets up a subsidiary that owns their trademark and pays that company to license it back, then it's the same sort of transfer: money being paid in exchange for a product or service. It's very hard to write a law that would block the shell-game money transfers without blocking real purchases between companies, and if you do it wrong then you end up penalising smaller companies.
I am TheRaven on Soylent News
I didn't say transfers of money, I said transfers of money out of the country, corporation to corporation. Corporations that transfer money, inside the country are not taxed. Are you being productive, then you won't mind 1%, if you're not, you will. Like I said, you incentivize the opposite, so that people get a bonus for bringing money into the country. It is really that simple, it would cause a shift in how business is done.
In your case, Starbucks paying "licensing" fees to Starbucks Holding Company would be taxed straight up 1% (my example, not a real number) on the totality, not the "profits". While Starbucks paying NEC USA (registers) would pay nothing in taxes for that transfer. NEC USA would pay the tax when transferring money to parent company in Japan (or wherever)
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.