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Facebook Paid 0.3% Taxes On $1.34 Billion Profits
theodp writes "Facebook is unlikely to make many new (non-investor) friends with reports that it paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion for 2011. 'Facebook operates a second subsidiary that is incorporated in Ireland but controlled in the Cayman Islands,' Kenneth Thomas explains. 'This subsidiary owns Facebook Ireland, but the setup allows the two companies to be considered as one for U.S. tax purposes, but separate for Irish tax purposes. The Caymans-operated subsidiary owns the rights to use Facebook's intellectual property outside the U.S., for which Facebook Ireland pays hefty royalties to use. This lets Facebook Ireland transfer the profits from low-tax Ireland to no-tax Cayman Islands.' In 2008, Facebook COO Sheryl Sandberg cited 'local world-class talent' as the motivation behind Facebook's choice of tax-haven Dublin for its international HQ. Similar tax moves by Google, Microsoft, and others who have sought the luck-of-the-Double-Irish present quite a dilemma for tax revenue-seeking governments. Invoking Supreme Court Justice Potter Stewart's famous common sense definition of ethics ('Ethics is knowing the difference between what you have a right to do and what is right to do') is unlikely to sway corporations whose top execs send the message that tax avoidance is the right thing to do and something to be proud of."
Tax avoidance IS the right thing to do and something to be proud of.
but they're still actual human beings - not a faceless entity - who make the decisions and understand the ramifications, so they and all of the other corporations (and individuals) who seek tax havens are essentially privateers and definitely scumbags.
www.chihuahuarescue.com- Help to end dog abuse, abandonment and cruelty
Thats why Obama raising taxes on those that make 5 times more than the average citizen will solve all of our fiscal problems.
In a simmilar way that his credit card legislation didn't result in banks raising fees and interest rates to recoup lost profits.
Government makes stupid laws.
Companies follow those laws.
This is the fault of the companies and requires more government.
t
Tax avoidance is good business. But I would also want to make sure that USA companies don't totally offshore their revenues ... and jobs. This is why we need tax reform.
Yeah, let's tax the wealthy people in the US making more than $125/$250k because they are the problem. In fact, please post more information about that top 1% causing the problem on Facebook using your iPhone again...
The rich aren't the problem, these guys are the problem. If they want to do business in the US, they should be required to pay US tax rates for all income in the US. Period.
...is to pass a law which states that the government will not provide material support or assistance to companies who offshore their profits.
Your container ship full of product headed to Europe gets hijacked by Somali pirates? Well, you can either ask the Liberian government (your ship's flag of convenience) or the Cayman Islands government (your international HQ) to help rescue your ship.
Website breached or attacked? The FBI isn't going to help.
The Chinese pirating your IP out the back door? Sorry, the State Department won't be lobbying China on your behalf.
You want a real government's help? OK, well then you have to pay taxes to the real government. Having a shiny sign on some skyscraper where 1% of your workforce lives, 50% of your profit is generated and nearly none of your income tax is paid means you're really not a local entity and won't get the government on your side.
Seems logical to me. Ireland is happy to get 4 million that they wouldn't otherwise get at all. Ireland's simply undercutting other governments. Makes sense.
But if you want to collect tax dollars from companies that operate in the .U.S.A., you might want to assess their global revenues, period. Global companies paying global rates makes perfect sense.
Otherwise, you're looking at a future without tax revenue. Good luck with that. Let me know how it goes.
On the other hand, you can look at this as simple capitalism. Ireland made a better offer. You lost. Suck it up, or learn to compete.
Either way, don't bring ethics into it. You're talking about taking someone's money for "the greater good". And you're forcing them to participate. If you're going to discuss ethics, you might want to start with your own.
Tax avoidance is a good thing. Kudos to Google and every other company who keeps the government's thieving paws out of their coffers by any and all legal means available to them.
-- Stu
/. ID under 2,000. I feel old now.
Come on people, get with it! You realize that Facebook is owned by a member of the "family" right? Look at who the owner is related to, and what they are doing for the Government. I'll bet that after they get paid by the Government for spying, that US citizens actually pay them to exist and be a business.
/sigh
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
How long will it be until laws are enacted that income sales to entities in a given nation results in deemed presence in said nation? And moving money from external entity results in taxable income (minus tax already paid to other jurisdictions)
The current setup is clearly unsustainable. It is nothing less than leeching of money from a nation without returning it back into circulation (which is done by either taxes or wages).
naive.
...if you could.
But we can't.
That the rich and powerful get to step around (or plainly just stomp over) the law is the whole reason this is alarming.
I, for one, am not complaining about the lack of "ethics" involved in tax evasion, but rather about how the system seems to be EXTREMELY BIASED towards the rich.
There is something rotten when in a given system the more powerful/rich you get the less you contribute to its development(proportionally).
It almost seems like the rules were designed to distance the elite from the commons, further pushing the former up and the later down.
you know what? good for them. also, thanks for the idea. I run a small business, 3 people including myself in the us, 10 overseas. all working hard. I put in about 80 hours a week of work. I pay an insane amount of taxes in the us - high income. from my point of view - union guys and other mid and low level jobs. people didn't work their ass of in school, don't have the needed skills, don't get as much an hour. people who don't work nearly the hours I do. I'm supporting them. I pay in more money, yet they have equal vote in how it's spent. and even in a tax system that's not having a higher % for more income - how's that fair? same %, yes, but it's not the same amount of money. I pay way more, but I studied more, I work more hours. that's why I make more. you're punished for not being a c student at school and a c worker in life. yes, get my money the fuck out of the us, and don't get fucked in the ass by people who didn't work hard enough and didn't earn it.
now you might say - hey, factory guy, hard fucking work. he works hard, and may work two jobs. well, maybe learn a skill earlier on in life that doesn't get you stuck at a fucking factory and 2 jobs? that's what I did while they were smoking pot and ditching school.
don't agree - please reply with your point of view. I'm open to an argument I didn't think of to change my mind. haven't heard a valid one so far, but please give me one if you think of something I haven't in my life.
How about we just close the loopholes? If you have a US based company that is clearly operating a subsidiary, that subsidiary (even foreign) will be subject to US taxation. Far simpler strategy.
I suspect the poster, as most people, choose not to pay more tax than they're required to pay.
Or warrantless wiretaps. Or hoovering every damn email, text, and phone call in the entire USA.
Good for them.
Because crap like the Patriot Act is what higher taxes are used for.
So keep voting for candidates who want to "invest" your money. Keep telling yourself the candidates YOU vote for really want "good government". Sure they do.
Making corporations paying taxes on profits is double taxation and should not be done. Rather the profits should pass through to the owners (investors) and then the investors should pay taxes as if that was their earned income. Any retained earnings by the corporation (profits not passed through to investors) should be taxed as if it were earned income. This includes paying SS, Medicare, Medicate, workman's comp, federal, state and local income taxes.
While we're at it lets eliminate all the loopholes, subsidies and deductibles on the personal income taxes as well.
Wouldn't a simple fix for the countries involved just be to impose a tarrif on the importation of the "IP Rights"? Just set it to be equal to taxes on profits, and the problem is solved. So, FB UK doesn't make a paper profit of, say, 3 billion because their revenues of 3.2 billion are offset by "IP Licensing Costs" of 3 billion - just tax the importation of the right and collect the same amount as you would if they didn't try the shifting.
If only all that time spent on ACTA would have been spent on international tax agreements to eliminate these kinds of ridiculous constructions.
I know, not easy to do, but a whole lot more worthwhile. Until this happens it will only get worse and, honestly, if given the chance, I would do it too.
That would be a wonderful idea, highly likely to backfire.
After all, lobbying the US is expensive by comparison.
Is the submitter under the impression that taxes can be justified via ethics? I'd be impressed if it could be done without resorting to magical thinking, logical contradictions, non-seguirs, or appeals to force.
Basically small companies that provide most of the jobs in the US, but don't have the resources to mulit-nationally hide their profit have to subsidize those large companies that do now that the country is broke...
Where are the democrats on this one? Oh yeah, some of those large companies are part of the "family", so they must be "exempt"...
I bet that all those companies are already paying their fair share of money to the government, senate, congress and many other agencies, but not with taxes. A win win situation for all the parties involved, not for common people who have to make up for the difference with higher taxes.
Facebook has a moral obligation to its shareholders to maximize profit.
How about we just start requiring executives to pony up the difference in taxes. Company should've paid 100mil in taxes, but used loopholes to only pay 15? Make the executives and board members cough up 85mil.
Just WAIT til you find out how IKEA operates! Go on, look it up yourself, you wouldn't believe me if I told you!
Mostly random stuff.
This assumes that the govt officials are not in the corporation's pockets and have the taxpayers best interests at heart.
Are you that naive?
Start using the NSA for some good and uncover the people involved.
In addition, start taking advantage of the nature of these tax domiciles as being easily knocked over by a superpower's military. Offer to disclose each conquered country's information to other regions such as the UK and EU. In any case, move in a way that thwarts any effort to move out assets to "somewhere else".
Finally, be willing to use extraordinary rendition to moot jurisdiction movement. This would be viable for cases such as Eduardo Saverin, and assets of companies sent offshore.
In any of the cases, there will be no shortage of people willing to defend their country from tax jurisdiction abuse. With plenty of people out of work - more than a few leaving from good jobs - opportunity exists to discourage/deny the use of creative accounting.
(If you really want to turn up the heat, ensure that nobody involved, whether directly or indirectly, will have any protection from the US)
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
is compulsory.
With "liberated" attitudes like that floating around the 1960s and 1970s, no wonder ethics and morality are bat-shit out of whack.
"I don't know, therefore Aliens" Wafflebox1
Sure, that will go over well...right after the country that subsidiary is located in agrees to stop taxing it. Of course, if you pass that law and get other countries to agree to not tax the subsidiaries, pretty soon the "parent" company will be based in a no-tax country.
The truth is that all men having power ought to be mistrusted. James Madison
+-1 ?
Yeah, because shiploads of FaceBook profiles are being shipped across the Indian Ocean all the time.
It might make more sense if the government levied a special tax on assets of corporations held on our territory. FaceBook's likely response would be to move their HQ from Palo Alto to some island. They might not get all their employees to move with them; but they'd get enough.
The government doen't have too much leverage here except to exert pressure on the other government that are leading the race to the bottom. First diplomacy, then gun boats.
Corporations follow the laws of capitalism, not the laws of ethics. They will never pay more than they are legally required. If you don't like it, change the laws.
Set up an AMT for corporations that operate in the US. If they are bigger than a certain size in terms of US revenues, then they have to pay a minimum tax rate on those revenues or the usual taxes on profits, whichever is higher.
Yes, that sucks for low margin companies with lots of revenue, but it's likely better than letting very profitable companies like MS, Google, FB and many others get off essentially scot free through international tax games.
The Caymans and Ireland are tax shelters. It is not clear in a just system why these goverments should get any of Facebooks profits. How are Irish roads or Cayman firefighters providing a service for Facebook? Facebook profits come from advertising. It might be smart for countries to focus their taxes on the ads. Tax advertisement revenue instead of profits. This would distribute the wealth to locations where Facebook is used and where profits are generated.
If the community spent half the energy we spend flaming each other with the same argument over and over and over calling their Congressmen to yell at them, faxing their Congressmen copies of large checks written to their opponent in the upcoming election, etc., then things might start to change.
If Slashdot were chemistry it would look like this:Cadaverine
Since we are going to argue based on judicial statements let me give you another. From the Honorable Judge Learned Hand
"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."
So long as the methods used are completely legal their is simply no room for complaint.Corporations are legal devices for making money, they posses no morality, and no ethics. These are human traits. Corporations, despite the legal treatment they receive, are not people. The executives of these corporations are legally tasked with maximizing the profitability of the corporations. It is their fiduciary duty to do so. If the law allows this arrangement then the executives of this corporation would be failing in their responsibilities to not take advantage of it. The government is entitled only to what the law allows. Since the government makes the law this is clearly fair. There is nothing immoral, illegal, unpatriotic, unfair, or wrong with any corporation, organization, or individual using the law as it is written to reduce their tax liability so that the tax payer keeps as much of the money they made for themselves.
In a corporate sense it is the right thing to do as long as it is within the law. It's the only thing to do, really, if you're meeting the obligations to your investors.
Correspondingly, terminating the tax and incorporation laws that allow this kind of corporate tax avoidance is the right thing for the ordinary citizens in multiple countries to do. The law is broken if this is the end result. Therefore, the law must change. No more big company free rides on the backs of the rest of individual taxpayers and small companies. They make billions in profit, and pay single-digit millions? Ridiculous. *I* pay more in taxes, and so do a lot of other people *and* smaller companies, so that Facebook or [insert huge multinational company here] can make huge profits. I'm paying more for the services that they receive from government, be it transportation, education, defense, or whatever. Some people complain about the "welfare state" and people taking advantage of it, but you head down to Wall Street and these shell companies are standard operating practice to get out of paying taxes. Crafty and smart they may be, but they're a bunch of free-loading corporate welfare bums to me. And unlike people who actually do need help, they aren't living below the poverty line. I have zero sympathy.
This shouldn't be an ethical issue. The point isn't to shame companies into "doing the right thing" in an ethical rather than financial sense. That's nonsensical. The goal is to get the fricking broken tax laws fixed, so that big companies pay a fair amount on billions of profit rather than almost nothing. They're getting too good at socializing the costs of society while privatizing the profits. I'm not begrudging companies the ability to avoid whatever taxes they can within the law. That's their job. Good on them. But the law under which they do so must be fixed.
At risk of being modded down -1: Disagree, there's an important counterpoint worth mentioning here:
Companies have a legal duty to pay taxes according to the laws.
Companies theoretically have a moral duty to pay taxes according to the spirit of the law.
Companies have a legal duty to minimize expenses and maximize returns for their shareholders and investors.
Accordingly, corporations have a legal duty to engage in legal-but-potentially-morally-questionable tax sheltering to minimize expenses and maximize returns for their shareholders. If a director is not using every tool at his disposal to make a business profitable, then at best he will be fired or reprimanded for being a bad director, and at worst he will be sued for breach of his fiduciary duties.
It would appear that a better solution is simply to write simpler tax laws that don't create the loopholes in the first place rather than to try to patch the loopholes with more convoluted tax law. But that is so very much unlikely to happen while Congress is immune to the insider trading and securities exchange laws. Congress won't think that this is broken so long as they're the ones making money off of the loopholes, even if it's at the expense of the U.S. taxpayer.
The term you use "Big government" is really meaningless, double-speak, Orwellian language. As an example 15-years ago there were far more government employees than there are know and the national debt was about 3-trillion dollars, yet now in 2012 after all the out-sourcing, and privatizations the national debt is approaching 16-trillion. So your argument is what? exactly, just pure double-speak.
"NON-US income". I suppose you think then that the U.S. Government and YOU are entitled to some of that 'fair share'?
Get a life, a career, and take your two arms and pull to both sides really hard. The light that you are seeing is that of your a-hole opening and your head emerging.
The Cayman Islands are part of the British Overseas Territories -- could Parliament or the Queen change their tax laws, or appoint a governor who would?
clearly become by clicking here to place a paper get tough. I hope for a moment and appeared...saying states that there Market. Therefore, steadily fucking risk lloking even
The truth is, facebook only collected X million dollars while making a lot more. As in, all their services and such cost a certain amount of money plus that owed to the government. It is known as embedded taxes, this is a great tool of governments to use in avoiding the general population from understanding their true tax load.
A tax on corporations is just an indirect tax on those who directly or indirect interact with that corporation. Any penny paid in taxes by the corporation comes from its customers and so on and so on.
The real fixes are open honest taxation. Let people really know how much it costs them for what they receive.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
...and its equivalent called avoidance as well. Perhaps the US could do so more aggressively(read: go international) and allow regular citizens to help.
Regardless of amount, purposeful evasion/avoidance shows contempt for a country and its constituents. That is, it makes you quite close(and blatant offenders like FB/Google already crossed it) to falling on the wrong side of the enemies foreign and domestic phrase.
If you want to be on the wrong end of a very capable and effective hyperpower(the US), do not be surprised when it(and its citizens) acts against you. You're free to become a terrorist, but not free to evade the consequences of your choice(which is the primary goal of tax avoidance/evasion, consequence evasion).
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
The problem to your solution is that you need to legally define "offshoring profits". You see, these systems get set up by lawyers in such a way that they are legal.
The solution, of course, is to pay taxes on revenue, not on profit.
But frankly, taxes are so heavily skewed towards corporations that I've thought about creating a company with the business purpose of running my life, only so that everything I do can be tax-deducted.
Assorted stuff I do sometimes: Lemuria.org
Some folks wish they got a lot less from government.
How about the IP laws that seem to let these companies make all this money and/or let them fiddle the books so they pay almost no tax? The only reason a lot of these companies have such large profits is because our freedoms are restricted to let them do so. This is part of the social contract. We collectively agree to have our freedoms restricted in order for companies to make money. This lets them generate employment and contribute to public services through their taxes.
It seems to me that these companies simply want to have it all: restricted freedoms for us and they make off like bandits without contributing some of those profits back to society. Not everyone agrees that the amount they are expected to pay is fair but likewise not everyone agrees with the freedoms we collectively give up. However what we seem to be getting is increasing demands to give up more and more freedom so companies can continue to make money while the same companies are using legal loop holes to dodge the social contribution part of the bargain. If we carry on in this direction it will not end well for either us or companies.
How about we just close the loopholes? If you have a US based company that is clearly operating a subsidiary, that subsidiary (even foreign) will be subject to US taxation. Far simpler strategy.
You miss the whole point of the story. This story isn't JUST about US tax being avoided.
paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion
The problem here is that Ireland offers ridiculously low tax rates to attract investment and employment.
They realize that the spending and the taxes Ireland gains from income taxes and sales taxes paid by the employees and the jobs that are created helps Ireland more than the corporate tax. So they set crazy low rates cor corporate taxes and Facebook and Google set up data centers there.
I'm hard pressed to declare this a totally bad idea. If it works for Ireland, good for them. If it works for Facebook and Google, how can you blame them for doing exactly what the law was set up to encourage?
The US can fix their tax laws too. They could easily make it more profitable to keep the investment mostly at home. Irish tax and legislation isn't exactly secret sauce. Washington State gives Boeing and Microsoft and Amazon astounding tax breaks just to keep its citizens employed. So do a lot of other states.
Side note: There is a school of thought that says taxing corporations is counter productive, and taxing the compensation AND THE PERKS of people that work for the corporations makes more sense. (Lets not start the corporate owned cars, planes, yachts and houses rant m'Kay? I said "compensation"). When you get right down to it, the reasons corporations are taxed is to gain some measure of government control over them, not to gain any real tax revenue that would not otherwise be collected from shareholders or employees.
Sig Battery depleted. Reverting to safe mode.
Could you please try explaining that again in a way that makes sense? I have no idea what you're trying to say here.
Your forgetting they paid direct to head office, in advance, in order to get the option of not paying now.
Your real government services are being sold cheap of the back of a lorry by your congress critters, good luck stopping it or even getting them to admit its wrong.
contractors are not included in the official headcount yet for all intents and purposes they are govt employees. And they are not cheap.
It's simple - see through the bullshit and judge the size of the govt by what it spends.
This is perfectly acceptable.
You seem to be stating that having a company 1% in the USA is better than a company that's 0% in the USA. This clearly isn't true when the company in question is raking in 90% of it's money from the USA, and giving virtually none of it back. They soak up our real estate and resources. I'm sure a company that pays tax on 100% of its revenue would do a lot better for the USA in that plot of land than one that pays tax on 1% of its revenue.
Let the tax evading bastards evade their taxes and fuck over the economy of a different country. Let the entire operation and everything regarding it run out of the Cayman Islands. SURELY those running the country will look kindly on this big, massive organization giving nothing back to the government, and no blood will be spilled by anyone corrupt.
Maybe a simple solution is to not tax corporations income at all and to pass the taxable income to the owners of the corporations like a partnership. If you own 10% of the company, then you must claim 10% of the net income on your personal taxes. If you own .0001%, then you claim .0001%. In this modern age of computers, corporations can issue 1099 statements with your weighted average share of income.
Doing so treats corporate income like any other business income for tax purposes and dividends just become a return on capital investment. The downside to all of this is that some very wealthy people won't be able to shelter their money in off shore corporations any more because they will have to claim it as personal income just like a sole proprietor or partner.
Pfft, as if that is going to mean shit to any of these companies.
They could hire HITMEN to take care of this stuff if they wanted to, hell, they probably have more contacts than the FBI bloody does!
First they don't play any taxes, but use the luxuries of a country,
then they expect huge profits but don't give them back to their employees,
and then they have the audacity to call poor people "moochers" and "leeches".
People that got poor because of them.
IMO, they are America's actual number one enemy of the state.
The "terrorists" are a freaking joke compared to the destruction those companies do to the country.
In theory. Oh god only in theory.
I'm a mix of Bin B and C. I go downright socialist in the sense that because I believe in Keynesian economic theory, I think that the government should shift between deficit spending and a surplus in counterpoint to the private economy. Ideally this should be set up to be as automatic as possible.
Combined with our not being willing to let people starve in the streets, not wanting people in prison to have better lifestyles than those out of prison, etc... I think that we should have a sort of universal employment option instead of most forms of welfare. Call it the 'Federal Jobs Program'. It'd be a typical government job: Low on pay; high on benefits. I'd try to keep it paying slightly less overall than private jobs in the same category. Meanwhile it provides medical*, training(technical, OJT, and college), perhaps even food and housing. I'm picturing how we used to treat junior enlisted in the military - eat at a dining facility(where junior enlisted to most of the work), live in the dorms/barracks, family housing for the married. Anyways, haven't even addressed what I'd have them do - which is mostly 'build infrastructure', which to me is anything that should still be in operation and providing benefits 20 years later. Roads, bridges, schools, parks, government buildings, etc... Heck, maybe even put them to work putting solar panels on people's houses in areas where it makes sense. Running fiber. Helping to set up a community cooperative internet provider. To try to keep private businesses from using it to get their projects done cheaper, I'd require all infrastructure to pass in to the hands of a cooperate(IE customer owned)/not for profit, not a for profit business. The details would fill a book, of course.
The trick is that when deciding whether a project would be profitable, you deduct the welfare we'd be paying the worker otherwise if they weren't working. So with laber discounted something like 50%, you can now, on paper at least, have a lot of projects be profitable/worth it if it wasn't for the otherwise high cost of labor.
*Until we get some sort of universal system set up; as a libertarian I find the idea of your job providing your healthcare abhorrent. You should be getting your own healthcare insurance INDEPENDENT of your job, outside of military/professional sports and such.
I don't read AC A human right
There's a difference between supporting the troops and supporting the military complex. You have to be careful about the lines drawn.
Getting our troops out of Iraq, Afghanistan can be supporting the troops while not supporting military industry/spending. Lowering overall military numbers gradually while increasing pay can be supporting, etc...
I don't read AC A human right
Big government means and has always meant big in terms of budget. It has nothing to do with number of government employees.
Outsourcing a government employee does not reduce the size of the government.
They why is this a problem? If they are paying what they are legally obligated to pay, then why should they be forced to pay more? Who's the authority on how much more they should be paying? Why should they pay more? Ethics? Does that mean there is an ethics tax now?
If we don't like how companies use the laws that are set up, I guess we know what we need to do, don't we? Make laws that force companies to pay what we feel is justified. Just don't be surprised by the outcome.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Does this mean that the people who pay no income tax should be held to the same standards? If so, I'd vote for it. No more "ObamaPhone", no more public education or police protection for deadbeats, no more food stamps for people who do nothing more than produce more mouths to feed... I'd be happier to see those fucks go too.
But I'm sure you'll have some bullshit excuse for those fucking leeches. At least a company hires people, that's jobs. The welfare fucks are like a cancer.
The article says how much Facebook paid Ireland for operations around the world. How much did it pay Ireland for profits generated in Ireland?
As an example 15-years ago there were far more government employees than there are know and the national debt was about 3-trillion dollars, yet now in 2012 after all the out-sourcing, and privatizations the national debt is approaching 16-trillion.
The thing that started this began more than 15 years ago. It was the creation of an unofficial 4th branch of government, called private contractors. Not all private contractors belong to this branch, but the ones that do.. oh boy..
They arent called federal employees, but these 4th branch payrolls mainly consists of federal money. When you count these 4th branch employees, federal employment has gone way way up over the past few decades. It isnt just the growth of defense contractors either, as a lot of technical and social services are now contracted out and they are growing rapidly too.
Its actually plainly obvious that this is the case when you consider that spending must ultimately end up somewhere. If spending grows rapidly then the number of people dependent upon federal money for their wage also grows rapidly. Plainly obvious stuff. You've got to get pretty convoluted with your argument before you can hide this truth.
"His name was James Damore."
Stop using Facebook.
"If any question why we died, Tell them because our fathers lied."
Sean Parker: You know what's cooler than a million dollars?
Eduardo Saverin: You?
Sean Parker: A billion dollars.
http://www.moviemistakes.com/film8538/quotes
Corporations are not a "someone". Those corporations profit from the infrastructure and R&D of the countries they operate in. This concept that the government is somehow "stealing" from companies and people is one of Rand's most insidious and disgusting fallacies. It's Orwellian and retarded on so many levels. She couldn't even reconcile it herself. She believed in democratic election but not in government or any taxes. She claimed her type of economics had never been tried, when in fact, it's the main theme throughout history with the exception being the beginnings of government in the modern era.
Ayn Rand was a jilted, orphaned byproduct of Soviet totalitarianism. She went 300% in the opposite direction. She somehow believed that "taking" from the productive members of society would somehow cause those members to go on "strike". This is so simplistic and reductionist it's mind boggling that idiots like you swallow it by the gallon. She fails to even consider that government is symbiotic. "By, for, and of the people". Never does she think that there is possibility that one can profit and pay taxes. Nor is there talk of how the concentration of power and money is dangerous. Nor talk about the marginal utility of income.
Also how fucking stupid is it to think that "productive" people would go on "strike" because of a few % of taxes? If there is opportunity to make money, people WILL go out and make it.
You want to see how insane she really was just watch her interview with Mike Wallace: http://www.youtube.com/watch?v=1ooKsv_SX4Y
Seriously, educate yourself. Stop telling people they should re-examine their own ethics until you even understand the ethics being supplied to you by your crazy hero.
If company A owns or has shares in company B then company A can not buy, sell, lease or rent assets from company B, they can transfer assets directly but if company A is outside the country company B is registered in then Company A pays export duty on it. One of the biggest tax evasion methods is for one company to own another company and have the second company rent or lease the rights to use the parent company's assets particularly IP assets. Check out Hollywood accounting. They remove this little loophole and the you will be surprised how much tax revenue will suddenly be brought in.
paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion
The problem here is that Ireland offers ridiculously low tax rates to attract investment and employment.
This isn't due to a ridiculously low corporate tax rate in Ireland (it's 10% or more according to wikipedia, depending). The country with ridiculously low corporate tax is Cayman Islands (no corporate tax). Ireland's subsidiary pays licensing fees to the subsidiary in Cayman Islands, so that on paper the Ireland profit becomes miniscule, and thus the tax sums are low too.
Blinded by greed! Now if we look back at the last decade in which traitor bush enacted lower taxes. You'll see companies like Exxon-Mobile having a streak of record breaking quarterly profits exceeding several billions of dollars for several years, AT&T record breaking quarters, Banks record breaking quarters, real estate industry record breaking quarters, financial industry record breaking quarters, medical industry record breaking quarters, and the media record breaking quarters. So all this money which is being taken out of the economy is taxed at the Bush lower rate which allows the Neocons to keep more and give less the the American idiot. So over time the NeoCons wealth starts to grow exponentially which allow them to buy up everything-technical term "Consolidation". Now in 2013 the American people are straddled with a debt which could only be paid off in a reasonable time by tripling the population, or have each American pay a one time sum of $42,500 to end the debt now, or have the local governments privatised as much as possible, or have the federal government continue to receive taxes yet give back less to each citizen. So ultimately what the NeoCons will say is the only solutions is to allow them to control whatever service the idiot Americans need because your government can no longer afford too.
Dividends? Cap gains? Operating costs? Wages? Did you fail kindergarten math?
Corporate taxes are counterproductive. We should support savings and investments because they create progress and jobs. Tax consumption for less harm to the economy.
Are we going to have one article for every multinational corporation that uses tax shelters/accounting tricks to avoid paying taxes?
Personally, I don't think what they are doing is "morally" right - but then again, I'm one of those morons who don't think that corporations are people. Frankly, I'm not sure why companies pay taxes (specifically taxes on profits) - I think the rate should be 0 percent. The employees pay taxes (from the CEO to the night custodian). Employees pay taxes to drive to work, use facilities, etc.
If they are using land, they should pay tax on that (i.e. physical presence) - just like any homeowner. If they are using electricity, the pay the utility company (and they shouldn't get a subsidized power bill, unless they have an agreement with a private utility company). A company can't do much with money in isolation. It needs to spend it or invest it and pay capital gains tax.
The biggest flaw that I see is that the company starts "gifting" executives cars and accommodation. The employee might not pay tax on it - it isn't bought from their income. The executive is happy - they get "lower" tax rate effectively (since they don't pay for the car/house). But you can't stop companies from having their own vehicles - Fedex can and should own aircrafts. I don't see a clean way to distinguish these cases.
Maybe someone can enlighten me on why companies are taxed, and other flaws with eliminating corporate tax?
I have been studying economic policies within the context of power in varying types of governmental systems. Capitalist democracies like the United States, Rome or ancient Greece almost exclusively use military might to get their way abroad and defend their national interests. The quintessential example is an attitude of 'We probably wont have a reason to invade you if you sell us sufficient amounts of oil'. Socialist democracies such as nearly every nation-state of the EU use economic reliance or dominance to do the same thing. That attitude is more akin to 'Now that we have helped you industrialize your agrarian workforce, you owe it to us to sell low cost manufactured goods or our food aid programme might have some funding difficulties.'
The current question in 'colonialism 2.0' as Vaphell insightfully called it is which attitude is better for civilization as a whole - coercion through threat of violence or coercion through the threat of starvation?
I.e. diminishing returns.
The higher you raise corporate taxes, the more inventive ways large profitable companies are going to find to avoid them. So we end up taxing the crap out of small players that can't afford to globablize (and are a small percentage of oerall tax revenue), while the big boys just offshore their financials. If the USA were to lower corporate taxes 80-90% it probably wouldn't be worth the effort for a lot of companies to maintain foreign entities to get the tax benefits. This might make for an interesting economics investigation...
Maritime law dictates that anybody who is aware of piracy has to intervene to stop it if they have the means, no matter what flag the victim flies.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
And this is what I point at when I suggest flat taxation, and everyone says it would hurt the poor. The poor are already being hurt by the super rich paying almost nothing. I include businesses in this definition of super rich.
The solution, of course, is to pay taxes on revenue, not on profit.
Except that it would then be impossible to run any business with a physical product, unless you own the entire supply chain.
Everything you wrote is double-speak. IT MAKES NO F U K G SENSE!
I am looking through the bullshit, and if the government would stop privatizing everything there would be more wealth in the local economies, instead of wealth shifted to some private international firm.
And does it matter? I think the entire debate falls into the "what is less evil" category, rather than "what is good". I think I have better things to think about.
You (and the OP) seem to ignore the fact that the United States itself is one of the biggest tax havens for foreign companies.
Facebook pays VAT for all ad revenues. In Finland, that's 23 cents for every euro collected.
Additionally, Finnish Facebook shareholders pay 29% on all dividends as well as capital gains (if any).
The people primarily hit by higher taxes are regular wage earners. "The one percent" and corporations have many ways of getting around paying taxes, and there is no law that can fix this (short of turning a country into a totalitarian state). That's why it is so fascinating that the "educated middle class" so often votes for tax increases and the politicians that favor them.
It further encourages companies to move all operations to places with low wage labor. Taxing profit, wages, and cap gains all have purpose. If a company is extracting money from a country, they should pay for what makes that country worth selling to.
Corporations pay lots of taxes, but they are mostly local taxes (e.g., on property) and state taxes (e.g., on sales). Those are incidentally also taxes that go to services corporations actually need and want from their community. They pay even more taxes indirectly through personal income tax, because they need to adjust their salaries accordingly.
What corporations are avoiding is federal taxation. They can do that because there is really very little they get for high federal taxes.
And there is little governments can do about it. We've entered an age where corporations (and increasingly individuals) look at nations like shoppers look at products: cost, service, and performance. Politicians better get used to it, because there is not a whole lot they can do about it.
Actually, the main reason why they're able to get away with having to pay so little is to do with the US law of treating two separate entities (one of which owns the other) as a complete unit, of which law Ireland recognises. If it weren't for this bloody stupid idea then we'd be taxing them a hell of a lot more, as would you.
If you want to start somewhere, try your coru^H^H^H^H business friendly politicians. They're worse than ours.
- An Irishman who spent time looking into these loopholes.
I like it.
And your company doesn't pay its fair share of US taxes, and you are in management? Guess what, you only get a similar percentage of US benefits, and get to wait on longer lines to go through immigrations and customs while traveling back to the US.
And companies that don't pay their fair share of taxes should NOT be considered an individual for election purposes. (Not that it ever made sense.)
Of course contractors aren't cheap, we actually produce results.
How about we just close the loopholes? If you have a US based company that is clearly operating a subsidiary, that subsidiary (even foreign) will be subject to US taxation. Far simpler strategy.
You miss the whole point of the story. This story isn't JUST about US tax being avoided.
paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion
The problem here is that Ireland offers ridiculously low tax rates to attract investment and employment.
Somehow when employees are forced to compete for jobs, its okay, when companies are forced to compete for marketshare, thats okay too, but when goverments/countries are forced to compete to attract international business, politicians scream bloody murder.
How about we just close the loopholes? If you have a US based company that is clearly operating a subsidiary, that subsidiary (even foreign) will be subject to US taxation. Far simpler strategy.
You miss the whole point of the story. This story isn't JUST about US tax being avoided.
paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion
The problem here is that Ireland offers ridiculously low tax rates to attract investment and employment.
You hopefully do realize that this amounts to a taxation rate of 0.3%, which is way below the lowest corporate tax in Ireland - 12.5%.
This is not simply an issue of placing HQ in a tax haven (within the EU) - it also requires an ample dose of transfer pricing. Whether this is a "moral" action or not I'll leave for others to decide (I personally believe that the practice should be outlawed), but it is not a case of simply following national law.
I think this issue points out the obvious problem: US income tax law--let alone the income tax law of many countries--needs to be MASSIVELY overhauled.
Think about it--why are we having problems like:
1. Businesses incorporating--and often operating--in low-tax countries for tax avoidance reasons? Indeed, look at how many businesses are incorporated in Nevada or Delaware so they could enjoy much lower state tax rates.
2. The existence of "offshore financial center" banks, where both individuals and businesses are placing their money so they can't be touched by the IRS in the USA, HM Revenue & Customs in the UK, and so on. Why do you think there are so many "banks" in various Caribbean island nations, Switzerland and Monaco? Indeed, a recent economic estimate of money sitting in OFC's could be around US$33 TRILLION dollars. (!!)
This is why radical tax reform is needed. For example, the no-loophole flat tax proposed by Steve Forbes in 1996 eliminates taxation on bank account interest, capital gains and stock dividends, which would drastically slow the "offshoring" of businesses and liquid assets for tax avoidance reasons. I'd take it further and replace the income tax with something like FairTax (there is a bill in the US Congress to do this--H.R. 25), which would essentially end all taxation on the process of EARNING money. Such major reforms would put an end to most companies engaging in these practices, helping the local economy tremendously in the long run.
So? Surely this hurts you, average tax payer in America, but so what? Why should Mark Zuckerberg care about you? He is a jew (which stands for the chosen of the God), a billionaire, a man who controls your privacy. Now, what type of idiots are you if you are going to continue use facebook now?
Its TOO funny because on one hand they (corps) do everything they can to reduce their taxes. On the other hand, they often demand more govt services then most who do pay taxes (policing, court time, etc).
I think he's pointing out that taxes on corporations are just a form of double taxation where the taxation is "hidden" - you see more expensive goods and services, but have no idea what the cause is.
I'm in agreement, and I'm someone who would happily see higher taxes in exchange for better public services, and am as anti-corporate as the next guy. Corporate income tax just doesn't make any sense. Tax sales, tax employees incomes, tax dividends, etc, but the process of moving money around (which is, after all, what a corporation is) shouldn't, by itself, be taxable.
You are not alone. This is not normal. None of this is normal.
I fail to see how this is for ``the shareholders'' in the long run. Unless corp is paying dividends (or you have hope that corp will someday pay dividends), the secondary market is just a ponzi scheme (your ONLY way to make money is to find yet-another-fool to pay you more---without dividends, as a shareholder, you don't benefit from the corporation in any way).
Now, for the corp to pay US shareholders dividends, wouldn't it need to have large profits in the US?
Making corporations paying taxes on profits is double taxation and should not be done. Rather the profits should pass through to the owners (investors) and then the investors should pay taxes as if that was their earned income.
No, it's single taxation. Corporations are people, remember? And people pay taxes.
Corporations even have basic human rights like free speech (demonstrated through their ability to make unlimited political campaign contributions), so if they enjoy rights as if they were citizens, we should expect them to perform the other basic duties as if they were citizens as well.
I think a lot of that has to do with how some countries compete at the expense of everyone involved.
Ireland is a perfect example of that. They are attempting to lure corporations there with these lower rates but are screwing over every other nation, including their own. The rates are so low not even they can sustain their nation and are currently flat fucking broke.
I would honestly endorse a global tax code where they are taxed based on their total income globally and that income is paid out proportionally to which area generated the most of that base revenue before it got shipped around to each country through its own shell companies.
Or possibly divided according to how their workers are divided up. If they want to have 45% of their workers in one country, than that country gets 45% of the taxes they paid and so forth. Then they can't avoid the taxes and the area they want to put all their labor at also gets all their money, even if it isn't were they are.
1.) 'CruTcHy' doesn't know that PYTHON requires left indentation -> http://slashdot.org/comments.pl?sid=3335057&cid=42378113 (yet said I needed to do that? Please... talk about "pot calling a kettle black", lol!). He doesn't even CODE Python, and claimed to have "debugged it" himself? He used an online debugger (on code that /. formatting messed up on a paste that ran perfectly, see #2 next).
2.) IF my program has a "bug", how come it ran PERFECTLY here, 5x in a row vs. trolls like yourself + 100's of times BEFORE that too, vs. your "trollspeak/trollanguage", 'CruTcHy'... Hmmm?? -> http://slashdot.org/comments.pl?sid=3301707&cid=42259605
3.) 'CruTcHy' conceded memory usage with loaded data (where first you criticized me for it & withdrew it) -> http://slashdot.org/comments.pl?sid=3058625&cid=41126057 (yet he says he "codes Delphi"... on THAT note? See #12 below also, lol!) and *tried* to say he'd edit a large custom hosts file vs. duplicates by hand with a text editor (good luck to that with MILLIONS of entries, lol).
4.) 'CruTcHy' missed the fact that the hosts file DOES need protecting (UAC ACL & write protect help do so) -> http://tech.slashdot.org/comments.pl?sid=3058625&cid=41126421
5.) 'CruTcHy' ADMITS hosts files are useful (which I will find very useful in the future, thank you!) -> http://tech.slashdot.org/comments.pl?sid=3058625&cid=41126661
6.) 2 significant folks in the security field who create custom hosts file data host my GUI program in malwarebytes' hpHosts & securemecca -> http://slashdot.org/comments.pl?sid=3058625&cid=41126285 for custom hosts file creation & mgt.... and 'CruTcHy' said nobody gives a hoot about my program (seems you do, & fail vs. it, and there's these security folks also).
7.) Text Editors like notepad.exe &/or gedit will NOT handle properly processing hosts file data fully, which 'CruTcHy' had to be "schooled in" also -> http://slashdot.org/comments.pl?sid=3058625&cid=41121573
8.) 'CruTcHy' is a troll that's constantly off topic - He had to be reminded of what the topic is here (hosts) since you were trolling calling me homo, retard, & such, plus starting up your trolling b.s. -> http://slashdot.org/comments.pl?sid=3058625&cid=41104817 &
9.) 'CruTcHy' doesn't even know that PROCESSORS FETCH INSTRUCTIONS FROM MEMORY (not send them directly to the CPU) -> http://slashdot.org/comments.pl?sid=3335057&cid=42374745
10.) 'CruTcHy' says code should be easy to debug & yet doesn't use error-handlers -> http://developers.slashdot.org/comments.pl?sid=3258205&cid=42016197 (we ought to call you "Mr. Crash & Burn", lol... change your nick to that, might as well, after that)... lmao!
11.) 'CruTcHy' says he codes Delphi - ok: Show us a program you've done that did as well as stuff I've done, all written in Delphi no less, over time then since 1997-2004 (In response to this, I will put up a list of things that did well in respected publications, commercial trade shows in computer sciences, books, magazines, newspapers, & more that I did while you were STILL
Our politicians make the tax rules, so all companies that just follow the rules, are not doing anything but taking maximum advantage of the graft they and others paid for.
Is that you Timothy Geithner? Obama in 2016! Woot! Vote for the little guy! Like Facebook or Google. Fuck the 1%ers!
Got my Obama phone! Aren't your phones free too?
I know we didn't elect him but a recent candidate (that we were pretty smitten with) offered a famous quote that "Corporations are people too"... he left out the part about morality, taxes and even death as a guarantee! There is no excuse for allowing this to happen. Money transacted here should be paid in Ireland?? Cmon.
Should Things I buy from another place inthe US on line incur taxes to ireland too?? It plain does not scale. Unless you are one of the Pedipalp Wringers that we just love so much... you know the ones with the princely ^H^H^H^H^H^H^H kingly wages and smirk of superiority....
but they're still actual human beings
Who take money from other human being and promise to pay them dividends at some future time (that's what a stock is -- a right to vote in an entity which promises but does not guarantee future dividends). And that money which they take from those human beings has been taxed at least once (and in many case multiple times).
Any guest worker system is indistinguishable from indentured servitude.
Not gonna convince me that FB are the good guys. Not going to open a FB page anyway. Although kudos to them for getting *one* thing right. They sell information. Creation of that information does not take roads, public telecommunications (the info goes over private networks), etc. Why should they pay for services of which they consume none?
Any guest worker system is indistinguishable from indentured servitude.
Ahient dhat urite Zucky Zucky !
Zucky: "Iz Thanke Thanke Uhz Ahal."
Why do corps get to pay tax only on profits? How would you like it if individuals paid tax only on their leftover "profit"?
1. Lower the corporate tax rate, and raise the unearned income rates in response. This fixes the problem with richer people paying an effective tax rate lower than poorer people and makes it less likely that companies would want to set up such complicated shell corps. It has the negative effect of hurting the retirement of anyone that has all of their money in non-Roth investments suddenly subject to the new higher rates.
That's a pretty common solution. I think this one also works and is more novel:
2. Require companies to pay taxes based on the nationality and/or country of residence of the majority of their executive officers and board of directors. The tax rate is based on the income earned by all subsidiaries. This means that Facebook wouldn't have to just set up shell corporations in other countries, they would have to find a board made up of non-US people, and likely move the top executives out of the country, too. And at that point, well, they aren't really a US company any more at all, and it doesn't matter if they pay US taxes on their non-US income. But really I don't think most companies would go to that effort, as that is far beyond their fiduciary duty to their American shareholders. While business is offshore-able, most people still want to live in the same country as their friends and family. I think this can be used to "fairness'" advantage in tax law.
It doesn't hurt to be nice.
A rather simple solution. If the company is owned primarily (over 50%) by Americans, then whatever that percent is should be taxable. In other words, if Facebook's stock is owned by 75% Americans, then that 75% of that $1.34 billion should be taxable as if it were derived in America.
Great idea.
You've done the hard part.
Now run out and have every country pass the same law. Post back when you are done.
Sig Battery depleted. Reverting to safe mode.
You miss the whole point of the story. This story isn't JUST about US tax being avoided.
paid Irish taxes of about $4.64 million on its entire non-U.S. profits of $1.344 billion
The problem here is that Ireland offers ridiculously low tax rates to attract investment and employment.
Ireland's corporate tax rate is not "ridiculously low" and, contrary to what TFS suggests, Dublin is no tax haven. The Irish corporate tax rate is low by EU standards, but let's get real here: it's a far cry from being at Cayman level.
Let me to requote TFS with a bit more emphasis:
paid ***Irish*** taxes of about $4.64 million on its entire ***non-U.S.*** profits of $1.344 billion
What's the going corporate tax rate in Ireland again? 10%? 15%? Whichever it is, this means that they booked well under $100 million in profits over there. $1.344 billion is the profit booked in the Cayman.
Also, if Facebook is indeed siphoning profits out of Irland the way TFS says it does, I'd be very surprised that the Irish taxman won't eventually knock at the door. EU governments have little sense of humor when they need money, and $1.2 billion for having the rights to Facebook's IP is a bad joke that is virtually guaranteed to be investigated.
Tax avoidance in fact allows the job creators to keep the money that they would otherwise re-invest (since they only consume a tiny portion of what they earn, their consumption levels do not changed due to higher or lower taxes, only their re-investment levels change).
So says your church dogma, sure. You have convinced yourself that the wealthy will "reinvest" in things that are good for the working class, because you have been chanting it repeatedly at your church rallies.
However a quick glance at the American economy will tell you that is not how reality works. For decades now we have kept lowering income taxes for the wealthiest Americans, shifting the tax burden increasingly to those who make less. Your religion claims that doing so will create more jobs, more opportunity, and more economic mobility. Have any of those happened as a result? The answer is, without a doubt, no. Hell around 10 years ago unemployment resulting from these epically bad decisions became so bad that we had to change how we count unemployed people just to make the numbers palatable. Once we made the mathematical adjustments, we of course kept going on with the same economic decisions.
In other words, what you are preaching doesn't work. It doesn't work in America, doesn't work in Somalia, doesn't work in China, and won't work anywhere else, either. Just because you were born about 2 centuries too late to be the slave owner you aspire to be doesn't mean you have a chance of convincing a government to bring back slavery (thankfully).
There is no obligation to "pay back" for anything to anybody. Every payment is done at the time of consumption.
Take slavery, add cannibalism, and you get roman_mir! The remaining question than is at what point do you consume your slaves? Or is just taking them in considered consumption?
It's time the people of the United States wake up and recognize the *fact* that there is no systemic fix for this sort of thing. Corporations and their wealthy owners and executives are never going to allow themselves to be restrained into being responsible members of society. Present trends will continue until either everyone not part of the ruling class is explicitly enslaved, or until the corporations are burned to the ground and their servants and masters are killed or hounded into exile.
:-(
I don't *like* this picture of the future, but it's become increasingly obvious that its where we're going.
More than that..
Who also said the powerful only understand one thing, violence. They surely only respect actual pressure, not words, not ideals. They don't understand those words, and they don't share those ideals. They are kinda like dogs who got used to sleeping and shitting all over our beds.... we really, really ought to start acting accordingly, instead of wagging the finger and rolling our eyes. I wish it was legal to suggest killing a bunch. But apparently it's only legal to be killed, slowly, and over generations. Well fuck.
Apple was one of the first companies to take advantage of this loophole, and you are banging on Facebook. For fuck's sake, i expect slashdot to be the first ones to bang on this, not the last.
I still wonder what's good about corporations paying taxes anyway.
Wouldn't it be more beneficial if they didn't pay taxes?
So, if corporations didn't have to pay taxes. They would hire more people or pay them more. Those additional hires or higher salaries will then be taxed again. So the Gvt. does get it's money.
The effect is, that corporations won't have to go offshore for the best tax deal and pay taxes there.
So we would benefit a lot more if the corporations stayed here - tax free - but in return hire more people or pay higher salaries.
Haven't you heard? Taxes are for the little guy. The person who can't afford to hire an expert to guide them through an endlessly complex code. The person who can't afford to hire an expert to guide them through an audit. The person who can't afford to hire a lobbyist to badger Congress for tax breaks. In other words, the middle-class American taxpayer. The sucker.
WRT your side note: Not without fixing an immense number of laws.
Right now, the tax systems of most nations only even work "somewhat" well and fairly if taxes apply at *every* step on the way. Otherwise, intermediate goods and trickery will be used to affect valuation of taxes and pick tax rates by picking geographical locations for these taxes to be collected in even more.
Also, the article linked has opinions I don't agree with. It is obvious to me that if corporations themselves can own property and have income and money, they should be taxed as every natural person that does (though more thought should be invested as to *where* it is being taxed, for fairness' sake).
Its an open question as to whether corporations should be taxed at all, a question that even economic theory can't agree on.
I can see both sides of the issue.
There is an interesting article on this issues located here http://www.econlib.org/library/Enc/CorporateTaxation.html
The upshot seems to be that the appearance of fairness is the best rreason any one can come up with. The counter argument is that shareholders own the corporation, so why not tax them.
In any event its s fairly good read.
Sig Battery depleted. Reverting to safe mode.
How is that simpler? How, exactly, does the proposal that every corporate entity everywhere on the planet will have to file and pay taxes to every country it does business in on all profits earned anywhere in any country it does business in make things 'simpler'?
And how do you pay 5,726% of your revenues in taxes? I mean, after the US gets its cut, and Canada, the UK, France, Sweden, Denmark, and each of the other 100-odd countries most of these corporations do business in get a cut... what's left, exactly?
In that case, they pay taxes on that 90% of its money that was earned in the USA, IN the USA. What TFA is talking about is the fact that Irish tax law allows Facebook to pay ridiculously low tax rates earned by its Irish subsidiary, as allowed by the Irish tax code.
Let's be clear - this money was earned in other countries, and unless it gets shifted back into the US, it is not subjected to US tax law. It's that simple. Looking at money earned overseas and saying, "damn we should get a cut of that," simply invites retaliation in kind - every other government on earth will start demanding their 'fair share in taxes' of profits earned in the US, as well. This will rapidly bankrupt any company in business.
The US government has zero tax jurisdiction over profits earned overseas by companies operating in foreign markets - the only point where the US government gets to tax that money is if the corporation actually moves those profits back to their US parent company. And given that there's a whole big world out there, it's usually simply not that hard to find other things to do with those profits - reinvest in your facilities, talent, and manufacturing overseas, for instance.
The whole lot of them - Google, Amazon, Starbucks, Facebook (et al.) - and also the governments that aren't closing these loopholes.
Seems to me the only ones that "win" are the corporations and governments - while the rest of us are not only expected to pay our taxes, but also to bail out the aforementioned out when they act irresponsibly.
Perhaps it's time for a "War on Greed".
Well, actually, if we made huge megacorporations with subsidiaries all around the world unfeasible because of double taxation, it would solve a lot of our problems. It would essentially force those corporations to break up into smaller companies that operate independently on national level. They would still do business with each other but they would have to work in their own interest (and consequently in the interest of national economy), not in the interest of HQ that is on the other side of the world.
I'm Irish and Ireland has a lot of problems but this isn't one of them. It's businesses that provide jobs that are the fruit of what makes the world tick. It's not bureaucrats or politicians. It's industrialists.
What happens if other countries follow suit and offer a low corp. tax rate. That country attracts new businesses in their own locality, not just foreign ones. Remember, Irish corporations also benefit from these tax breaks. The reason many other countries are not offering corp tax breaks is because they lean more to the right and want more money for themselves. They are not concerned with jobs for the 'underlings'. If every country in Europe had low corp tax rates, the EU and Eurozone would be thriving and using stimulus to get its way out of debt. But our overmasters don't like people to be thriving. Tax breaks for businesses are effectively a stimulus.
There's too much communism in the world. Too many greedy politicians trying to take someone else's pie so that nobody can have any pie.
On Ireland's problems:
The agricultural sector is now at ~5% of output. This is too low imo. Ireland should be an agibusiness country too. We have vast swathes of vacant land.
European law - common agricultural policy and deregulation of fiscal policy cause a lot of the problems.
Trade unions are a little too demanding.
General global corruption problems.
Idiotic politicians.
Neutrality.
This is not the solution at all.
The solution is to completely repeal absolutely every income tax on the books, and then the 16th Amendment that allows what is simple theft by the government to exist. We stopped the draft because it was wrong. We should stop the income taxes because they are wrong, again being simple theft, which is wrong.
The thing to do is to replace the income taxes with the Fair Tax, which taxes new goods and services sold at retail. In that scheme, no businesses are taxed. That is as it should be, since these taxes harm businesses, but we can only tax such businesses if they do business in the USA. That is a great incentive to business to NOT do business in the USA, which they take to its logical conclusion and work to set up their manufacturing operations in foreign countries, resulting in a job scarcity in our country. In short, the income taxes are tearing this country apart, and have been ever since the rest of the world recovered from WW2 and began being able to compete with us. First textiles went to Italy and other places in the 60's, followed by consumer electronics in the late 60's and 70's, followed by great harm being done to steel and auto industries in the 80s, and then great impact to the intellectual industries like software in the late 90's to present as software development went to places like India and Russia. Income taxes in the USA are at the bottom of all of this. Their repeal would get a lot of these jobs to come back to the USA.
Its an open question as to whether corporations should be taxed at all, a question that even economic theory can't agree on.
You keep saying that. You sound like Fox news reporting "the controversy" by stating there are two sides, even if the controversy isn't nearly so contentious. Corporations are people. While they gain the rights and privileges thereof, they should be taxed like it. It isn't an issue of economics, except as a distraction to the massive rights boost corporations get over people. all (or most of) the rights, and none of the responsibilities.
Learn to love Alaska
I've seen papers indicating that taxing the moving of money would remove all future crashes. The crashes happen from bubbles that pop. The bubbles in recent time have usually been based on some manner of money juggling that encouraged more juggling. Like Enron, it wasn't about profitability or sustainability, but about revenue. You can't sell at a loss and make it up on volume, but there have been companies who did that long enough that the revenue numbers were high enough to get bought out, then crash (AOL managed to buy Time Warner with worthless stock). If you restricted stock purchases to every 30 minutes on trades locked in 10 minutes before the trading moment (randomly matching buyers and sellers of appropriate prices at an instantaneous point), then the nanosecond arbitrage would be gone. With the arbitrage speculators out, stocks would even out in price and fluctuate less. No more booms, no more busts (well, the bubbles would be dampened, people will still have runs on tulips). Another way of doing it would be small charges on moving the money. With the flow of money being more restricted, the arbitrage opportunities would be reduced. Investments would go back to being investments, and not opportunities with traders with direct links to steal from investors.
Learn to love Alaska
The counter argument is that shareholders own the corporation, so why not tax them.
They do.. the problem is their "income" isn't usually all that great. I doubt the check Zuckerberg cashes at the end of the month is more than a couple times more than mine. (Heck, maybe less.. depending on his day-to-day spending habits and how much he can avoid charging directly to his personal accounts.)
Of course on paper he probably makes more in a couple minutes than I do in a year, but as long as its all just tied up in share value, he doesn't really have any "money" as far as taxation is concerned. He'd be hit like a truck with taxes if he randomly decided to completely cash out one day.. not that he has any reason to do something like that.
I can think of an obvious solution to that problem -- consider share increases as taxable income.. but I think we're a century or two too late for that to go over very well.
when goverments/countries are forced to compete to attract international business,
You are so naive it's almost funny.
You think that all those countries are "competing" for business, so all the $1.3bn of business goes to Ireland?
It doesn't work like that. The company gets that business from all over the world and does business in many countries. Ireland isn't winning business. And a company wouldn't give up on something the size of France or Germany basically ever.
SJW n. One who posts facts.
Would love to see progressive tax policy where 'payroll tax' is abolished and companies receive financial incentives to employ locals - to the extent that a company could decrease their taxation rate significantly by employing more staff. The equivalent otherwise lost beingcollected from the poor suckers making minimum wage and paying the majority of the taxation requirements of the government of the day. Let companies wither down their taxation to almost nothing by employing more staff..
This would be a huge mess to deal with, policing every company and deciding if they are worthy, there will be so many shades of grey on the issue it will be too much trouble to figure out. There are much simpler solutions:
1) Remove all corporate taxes! simplifies the government, simplifies the tax code, reduces company waste of dealing with the tax code. Just image the influx of companies, jobs, and boom to the economy this would be, it is unimaginable. All profit all companies earn is already double taxed, once when the company earns it, and secondly when it is paid out as a dividends.
2) To cover this loophole simply tax the royalties Facebook USA is paying to Facebook Dublin. Is this already the case and the story is sensationalized garbage?
Certain companies, notably those dealing as real estate trusts or energy companies, already do not pay taxes on taxable income if they distribute almost all of it to shareholders within a designated 12-month period. In the case of mREITs, at least 90% has to be paid out, which is done so in the form of monthly or quarterly dividends.
To-do List: Receive telemarketing call during a tornado warning. Check.
The very way campaign contributions work in America, and undoubtedly elsewhere, allows corporations to get these petitions for favorable tax treatment written into law. Unlimited donations via the Super Pac loophole has essentially taken the teeth out of the Federal Election Campaign Act of 1974.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Except that it would not work that way. It would just result in more shell corporations and a more complicated corporate structure.
The truth is that all men having power ought to be mistrusted. James Madison
With the current tax system - yes. This requires more than just changing one tax, you would have to re-think the entire system.
Assorted stuff I do sometimes: Lemuria.org
I am not sure that I want to allow Facebook to arm its own militia.
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
A publicly traded company is said to have a fiduciary responsibility to its shareholders to maximize the amount of money it makes. If they know about a weakness in the tax collection schemes of the world, moral or not, they are obligated to pursue it. That's why most U.S. corporations are based in Delaware.
The fault is a bad taxation policy based on net income. If they were taxed at one rate on gross income, they wouldn't have any reason to go through the expense of setting up these shell companies.
Big rich folks complain about people mooching the system, and then they mooch the system a million times worse than everyone else.
Classic.
Finally, a company is allowed to keep most of the money it has earned. Screw the Witch From the Anus of America, the doodlehead from Reno and the communist from...well, Kenya. Mark it up as a victory for capitalism and all those idiots who bought Facebook at its Initial Public Offering (IPO).
Is that Facebook is finally making a profit.
This tax rate was on their FOREIGN profits.
Their U.S. profits were charged at a much higher rate.
Just like drugs dealers
it is US law that corporate managers of publicly traded corporations should tax avoid as much as they legally can. it is called fiduciary responsibility. if they did not, they can be sued by their shareholders (or even the government [SEC] in all irony) for breach of duty.
want to change it? first, you must change US law before you appeal to ethics.
If done right, more shell corporations and more complicated corporate structure should also mean more tax burden, not less. That's the direction we need to go.
"The significant problems we have cannot be solved at the same level of thinking with which we created them." --Einstein
Casteism
Perhaps contract is the wrong word then may be "social understanding" is a better term. Certainly the terms are always open to negotiation. My point is simply that we can view company taxes as pay back for the legal restrictions that allows them to make money. The level of those taxes and the level of those restrictions is always open to negotiation. This requires some give and take. As it stands at the moment companies seem to have avoided paying almost any tax and are arguing for more restrictions so they can make even more money. So I would give companies a choice - either pay tax rate and have all the nice legal protections they enjoy or don't pay any tax but also don't have any legal protections and let them decide which is the most profitable route.
So, you think the way to go is to drive up costs? That will work out well for everyone. /s
The truth is that all men having power ought to be mistrusted. James Madison
Firstly, there are probably not that many FaceBook employees in Ireland (correct name Eire).
Secondly, they are collecting all non-US profits there, which mean that Eire has an inflated GDP
for no real gains in employment , taxes, consumption etc..
Krugman had a post on this a while back in the NYT.
http://www.irishcentral.com/news/400-Irish-Facebook-staff-set-for-windfall-several-hundred-thousand-euro-each-as-stocks-go-public---VIDEO-152143895.html?mob-ua=Y
The country goes by the name of Ireland, it's part of the UK.
Sig Battery depleted. Reverting to safe mode.
The way to go is to penalize corporate ownership complexity and reward simplicity. As a bonus, you can do both by removing a lot of crap from tax laws.
Corporations can't just pass all costs directly to their customers. The market will only pay a certain price for given goods or services, and if you charge more it just won't pay. So up to a point you can just pass tax increases on, but if you want to stay competitive some or all of that burden falls on your profits.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
It's pretty simple really. There are millions of people in the UK on Facebook. Facebook makes profit selling their private data off. Clearly much of that business takes place in the UK, involving UK citizens and UK companies all operating under UK law and regulations. Facebook even employs people in the UK, people who are a product of UK society, the UK education system and whose needs are catered for by UK government services.
Yet Facebook, and seemingly many other international companies, don't want to pay any tax here. What we are saying is that if you want to do business in the UK market you damn well pay our taxes and stop trying to subvert the spirit of the law.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
You know the easiest way to reduce corporate ownership complexity is to reduce tax law complexity. Forget everything else. Make tax law simple and straightforward and lots of problems go away. Once you have done that, you can look at the remaining problems and start to come up with solutions. However, the problem with both offshoring profits and complex corporate ownership can for the most part be solved by simplifying the tax code.
The truth is that all men having power ought to be mistrusted. James Madison
I believe I just said that.
However, even if you simplify tax laws as much as possible, it'll still be possible to offshore profits by buying expensive nothing from shell companies incorporated in tax havens. This trivial accounting trick will bring your taxable profits close to zero. Apart from simplifying tax laws, you also need to make an official list of tax havens and make a new law which states that money paid to companies incorporated in those tax havens is never recognized as tax-deductible expenses.
You are not a legal entity in Ireland. You are not a legal entity in the Cayman Islands. You, in fact, are probably not allowed to be a legal entity in both of those plus the United States. (If you started out as a legal entity in the Cayman Islands, you sure as hell aren't going to be one in the US in less than a decade of effort.) Therefore this trick of simply moving money across jurisdictions isn't available to you. And that, in a nutshell, is why the trick of moving money across jurisdictions is a cheat. Because you and I can't do it. Not can't because we can't pay the fees (though that's true too). Can't because it's literally not legal. Corporations are NOT people. Corporations can pay a $50 fee and exist as a legal entity anywhere in the world, and multiply their existences into multiple countries for that same trivial fee. If you tried to do that, you'd end up on a Homeland Security watchlist.
Double taxation it may be, but you have the solution precisely backwards. It's the moving money around that is the source of these tax loopholes in the first place. Money is moved from the United States to Ireland and from Ireland to the Cayman Islands, while doing no work whatsoever along the way, and suddenly it is magically no longer taxable at any of those stops along the way? Bullshit. Tax each and every transfer like that, and watch all these tricks go away.
Meanwhile, eliminate taxes on individuals.
We're at a severe disadvantage as natural persons. We're either not allowed to hold multiple citizenships, or acquiring them is extremely expensive (relatively speaking) and extremely time-consuming (absolutely speaking). We're mortal. Corporations are not. We only have one income. Corporations have hundreds of millions. We only have one brain. Corporations have tens of thousands. The asymmetry is monstrous, unfair, and insurmountable. I would argue to abolish the legal concept completely, except that we humans seem unable to effectively organize collectively any other way. Certainly our attempts to collectively organize governments are universally pathetic. So we're stuck with the legal creature, at least for now. But stop pretending they're individual people, and stop pretending that we owe them ANYTHING. It's the other way around. They owe us EVERYTHING, and not just salaries.
Taxes are a necessary evil as long as a military is a necessary evil, and as long as we have the idea that we need to pay for necessary evils. So let's tax the legal entity that feels it the least, and leave the rest of us alone.
Worse are the corrupt politician who allow it to happen for a kick back of cents, not to the dollar but cents to the thousands of dollars and microscopic percentage which those corrupt cheats take to allow the richest to pay a negligible percentage versus the average wage earner. Now add to this the bullshit were those same lying cheating and stealing arseholes cheat of federal taxes also cheat on state taxes. Time to bust them up and lock them up, the corrupt politicians and those that pay them off.
Chaos - everything, everywhere, everywhen
We can see if there is any reason to do that after we simplify the tax code. Just because something is possible does not mean that it will be worth actually doing it. You talk about simplifying the tax code, but want to put a complication in there right off the bat. That is why it never gets simplified, everyone has one or two complications they want to add. Simplify the tax code, if, once that has been done, there is still a problem with companies offshoring profits (not just that some companies are doing it, but that enough are doing it that it creates a problem) then is the time to introduce your suggested solution. I suspect that if the tax code was simplified very few companies would find the overhead of offshoring profits worth it.
The truth is that all men having power ought to be mistrusted. James Madison
Simplify the tax code, if, once that has been done, there is still a problem with companies offshoring profits (not just that some companies are doing it, but that enough are doing it that it creates a problem) then is the time to introduce your suggested solution.
We're talking under an article that gives you all the proof you need that the additional solution is necessary:
The Caymans-operated subsidiary owns the rights to use Facebook's intellectual property outside the U.S., for which Facebook Ireland pays hefty royalties to use. This lets Facebook Ireland transfer the profits from low-tax Ireland to no-tax Cayman Islands.
Really, what part of the article tells us what they would do under a simplified tax code? The article tells us what they do under current tax law. It does not tell us what they would do under a changed tax law.
The truth is that all men having power ought to be mistrusted. James Madison
That was *exactly* my point.
Also, "free trade" agreements, which allow a company to "trade" with itself and move the money offshore in the first place.
"Business owners and investors use systems, rather than their time, to generate income." --Robert Kiyosaki
Casteism
Shouldn't tax rates be part of the mix in global cooperation? Those that undermine the rest should be punished by the rest.
If FB doesn't pay taxes, that doesn't mean that the government is getting less money. It means ordinary people are paying more taxes.
How can that be fair ? Everyone in Ireland is giving tax breaks to FB for what, exactly ?
How about just taxing gross revenue based on product or service delivery location? It's not possible to dodge that without abandoning the markets that create the revenue.
"The Chinese pirating your IP out the back door? Sorry, the State Department won't be lobbying China on your behalf."
Didn't help very much. No amount of US government lobbying has helped since the US is so in debt to China. "Look Obama, shut up, all we'll stop buying your bonds", said Jiantao only yesterday, "bankrupt countries have no rights".
Why pay a government that cannot help you. Perhaps you cute little geeks worrying about about bits, bytes, gay marriage and social networking have not seen this
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000
Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50
Got It ????? Shouldn't be difficult even for a semi-numerate geek.
Did the "custom subject-line above" let the cat outta the bag? I use THAT analogy, cuz we've been "going @ one another" like a 'crazy as a BAG OF CATS' (lol)... read closely, get to know THE REAL ME, a bit better then (& a truce too, ok? Read):
"i think we are on the same page, though i must admit i haven't figured out who i'm talking to..." - by crutchy (1949900) on Tuesday January 01, @07:58PM (#42446469)
We ARE on "the same page" but seeing it from diff. angles (for lack of a better analogy here)... we see diff. parts, but I am GLAD we spoke thus (yes, I posted differently to you than usual, so you wouldn't "pop off" & just say "ah fuck you, it's APK, let's startup shit" instead of having a NICE productive & INFORMATIVE conversation)!
Delphi use too - it ROCKS -> http://tech.slashdot.org/comments.pl?sid=3350243&cid=42441269 with PROOF as per my usual, you know... lol, must document on /., the "show me state" of the net!
"i don't really take much notice of what i do on slashdotby crutchy (1949900) on Tuesday January 01, @07:58PM (#42446469)
Man, you ought to... but, then again? You use a "handle/nickname" & NOT YOUR REAL NAME or initials as I do... I expose myself, and it's my professional rep on the line. I have to, especially vs. trolls around here (yes, I had them threaten my life, post my personal information, libel & stalk me & more, MANY times... not a first. It's the price you pay using your REAL name... then again - if you don't? You can't really get anywhere or develop a GOOD rep, or name & show your accomplishments vs. naysayers either).
It's a 'trade off' & I? Quoting Robert Frost "took the road less traveled" is all... it's been working out well though, mostly, but it "adds pressure" for me... I welcome it though - good mental exercise & exercise in vigilance.
"Surprised"? Don't be... just a guy, but one that got pretty upset @ this stuff from you directed MY way (since you did the same thing you bitched @ me about, no indents (and yes, my code does work, stupid /. formatting with code sometimes "f's it up" on pastes, as it did YOUR pasting in my code as I showed) -> http://slashdot.org/comments.pl?sid=3335057&cid=42403999 (and, lol, of course a "few more items" over time, yourself vs. myself too).
Ah, anyhow/anyways: Back to our discussion (you are not all bad by the by, I hope you think the same of me & we can 'call a truce' on the b.s. above... deal? Consider it!).
"Only way to do it? Get money" don't bother. it won't be long till your money won't buy anything anyway. many of those rich scumbags you hate will be broke too. only those with real assets (commodities, property, etc) will be "worth" anything" - by crutchy (1949900) on Tuesday January 01, @07:58PM (#42446469)
WELL, that's what I meant about diversifying from coding ONLY... it's become harder to get FULL TIME long term jobs in it and you know this... especially if/when you WORK FOR OTHERS (selling the MOST precious thing there is - YOUR LIFE & TIME, a finite quantity + most precious asset we all have, for awhile... remember - we're all just 'visiting; here after all, lol, for a little while only!).
In today's "litigious society"? You NEED "the holy dollar" or you get NO LAW... I've been there when CA (busted by the SEC for accounting fraud shortly after, "the lord works in mysterious ways") *tried* to say an app I wrote was a malware (wasn't, passed all 21 of their removal questions, but they did not PULL it, but reduced it to zero threat levels... heck, wasn't even scriptable for attack!).
It was a SIMPLE (and you're a coder, you'll understand this, @ least allegedly you are from what you said before but wouldn't bac
To which the US should reply, "we are $16 Trillion in debt, we don't have the means, so very, very sorry"
Pain is merely failure leaving the body
That's may or may not be true but what would happen with a "Fair Tax" if it's really such a thing, would be a huge growth in the underground economy.
Pain is merely failure leaving the body