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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."
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.
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Oh so you would like to pay for the police, the firemen, the roads, and everything else? We can argue about a bloated government, no doubt. But to argue that we should pay zero taxes make NO SENSE WHATSOEVER.
For if we don't pay taxes you better be prepared to pay Vinny down the street a bit of money to make sure that you don't get mugged, robbed, or killed.
Simply put, you sir are a nutter! Even Adam Smith knew we had to have a government and had to pay taxes!
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
You live in a complex society where the police are obliged to protect your personal property and your life, where food is not full of melamine, where we have a military that enforces our economic interests, where roads improve the flow of goods and services.
Pay for it.
--
BMO
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.
Tax avoidance impoverishes the job creators in order to transfer wealth to the leaching class.
Job creators being the working people who actually create wealth through their labor, and consume goods to drive the capitalist system.
Leaching class being the plutocrats who do nothing but extort and siphon off the labor of others.
Because it is flamebait! Some folks have this fantasy that you can get everything for nothing. Things cost money! As I was writing to the GP, sure we can argue about a bloated government. But to argue that tax avoidance is a good thing is not correct either.
Police, military, firemen, judges, etc, etc all cost money. Adam Smith who was a capitalist wrote in his papers that government and taxes were needed. The question is how much government, not whether or not government there is a government.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
...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.
I like to pay taxes, with them I buy civilization.
That a lot of deluded "rugged individualists" falsely think they are entirely self-made and have no obligation to pay back into society amuses me. Seeing them frustrated and resentful at paying taxes makes me smile.
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THANK-YOU!!! I used to work a hedge fund and talked to a guy who lived in Monaco and worked on tax avoidance schemes. He was not happy about the idea, but liked the work because it paid well. The issue here is that governments have to clamping down on this royalty kickback scheme.
It is a really bogus idea. Here is how it works. You have a company, it does not matter what kind of company. This company produces a widget and sells it across the world. You open a subsidiary, and that subsidiary sells your widget. The subsidiary has to pay something for the widget. In the old days it was costs of subsidiary, and wholesale of the widget. Now its, wholesale of the widget, plus a royalty.
The royalty is the kicker here. For it is a nebulous value that the company can define to be any feather I pull out of my arse. In most cases it basically eats all of the profits generated everywhere.
Trying to get rid of this is hard for you would be circumventing tax law where you really need to be able to not be taxed on foreign income. What needs altering is the concept of royalty and the governments have to say, "royalty, see this middle finger, that is your royalty."
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
"Some folks have this fantasy that you can get everything for nothing."
Some folks wish they got a lot less from government.
Some folks have this fantasy that they are entitled to someone else's money.
A vast majority of tax money, though, goes either to waste or to things that are outright harmful for the taxpayer. And even for police and judges, a big part is spent gathering the driving without disrupting traffic flow tax, and to patent/etc litigation, respectively.
The creatures outside looked from Alt-Right to Antifa; but already it was impossible to say which was which.
You are raising an argument that does not exist. I wrote very clearly we can argue about a bloated government, but not about taxes. You are saying that I somehow want people to pay high taxes for other people. I did not make this point and thus please stick to the argument.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
I suspect the poster, as most people, choose not to pay more tax than they're required to pay.
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.
Yeah, and? I wrote clearly, we can argue about the bloat, not about the argument of paying taxes. Vast amount of money goes to things that are harmful? Please check the budget of governments. The stuff you mention is peanuts compared to what really sucks up the cash. It is things like military (depends on the country), and pension benefits (most countries). Unemployment, etc do not suck up much cash. Those are just populist arguments as people and politicians want to keep things the way that they are.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
It is a fact of law in the US that the police are not required to protect you or your property (at least in most jurisdictions).
In its landmark decision of DeShaney v. Winnebago County Department of Social Services,” Stevens writes, “the U.S. Supreme Court declared that the Constitution does not impose a duty on the state and local governments to protect the citizens from criminal harm.
In Warren v. District of Columbia, it is a "fundamental principle of American law that a government and its agents are under no general duty to provide public services, such as police protection, to any individual citizen."
In Castle Rock v. Gonzales, "the police have no duty under federal law to protect the citizens."
There are other cases that more or less have the same result.
When seconds matter, the police are only minutes away. Maybe.
You are raising an argument that does not exist. I wrote very clearly we can argue about a bloated government, but not about taxes. You are saying that I somehow want people to pay high taxes for other people. I did not make this point and thus please stick to the argument.
Facebook paying no taxes is the kind of crap you get when you get a large powerful government that makes it worthwhile for entities with a lot of money to bribe, err, lobby that government to make rules favorable to them.
Don't like it?
Quit voting for candidates who want more and bigger government.
THAT'S the root cause of the problem.
I get it. You don't like paying for lazy people. Fair point, neither do I.
But what happens if you stop welfare? Crime rates go through the roof. People that can't eat get desperate and start doing things they'd never do otherwise. Poor people won't just starve and go away, they WILL rise up and take a lot more from you.
People are only complacent when they have something to lose. If you give them a little something to lose, then you can control them better. Create a society of have's and have not's and eventually the have's are all destroyed by the have not's.. It's happened throughout history, and apparently people don't learn from it.
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When government spending is at a level where the bulk of it is for things that the overwhelming majority agree are important things for the government to do, then you would be correct that tax avoidance is wrong. However, the world we currently live in has few if any countries where the overwhelming majority agree that the bulk of government spending is on important things for the government to spend money on. There may be disagreement as to what the important things are, and you might not be able to get a majority to agree to cut any one thing (although I am pretty sure that if Congress were to start passing spending bills that each contained only one thing, the budget would drop in size overnight--not just because they would never have time to pass all of the bills).
The truth is that all men having power ought to be mistrusted. James Madison
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.
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.
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
The problem isn't "more" or "bigger" government - but having a government that has the balls to stand up and say "pay your fair share"
Unfortunately - here in the UK we have the same problem... the people pay more while the corporations pay next-to-nothing
>did you just advocate colonialism 2.0?
We've already had it ever since the end of WWII.
What the fuck do you think the military is /for/?
--
BMO
Even a libertarian can acknowledge the fact that you don't want Crassus Maximus as your fire chief.
A Pirate and a Puritan look the same on a balance sheet.
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.
Actually there is. During Clinton's presidency they enacted Welfare Reform that required getting work to continue receiving welfare, no work meant no more welfare. We dropped welfare roles by record amounts and as far as I know there wasn't a spike in crime.
Or were you looking for an example like the guy who brougt it up where cutting welfare was bad? I don't know of any examples like that except maybe for current day Greece.
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.
That tends to be the confusion. People forget that the US government is actually very weak. It feels powerful to average citizens, but is generally weaker then many of the quasi-state corporations living within its borders.
The less that a government can do the less that the power that the corporations have over the government matters to the rest of us.
Why is it so hard to only have politicians for a few years, then have them go away?
But to argue that we should pay zero taxes make NO SENSE WHATSOEVER.
Suggesting no corporate taxation is not the same as suggesting no taxation.
For if we don't pay taxes you better be prepared to pay Vinny down the street a bit of money to make sure that you don't get mugged, robbed, or killed.
Even if Facebook were paying more in taxes, that money wouldn't be paying police in my town. It wouldn't even be paying police in the town where Facebook's employees live. Or fire departments, or roads, etc. Taxes paid by Facebook employees, however, do pay for government services where they live.
Focus on taxing the money at the point it gets transferred to individuals and the only way the taxes can be avoided is to move the people... but if they move the people they move the costs as well as the revenues. Note that companies can't work around this by giving employees (or executives) cars, houses, etc., because those sorts of benefits are treated as taxable income.
Counties and cities can, and should, also use property taxes to get the cash required to maintain roads and other local infrastructure used by corporations and their employees.
Set corporate taxes to zero and focus on taxing the money as it flows out. This would include taxing capital gains. Then corporations would have no reason to move to Dublin... unless they really are looking to use Irish labor.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
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.
Unfortunately - here in the UK we have the same problem... the people pay more while the corporations pay next-to-nothing
This is a complicated issue in my mind, I'm conflicted. One the one hand, my thought is that as long as we're going to tax corporations, we should do so effectively, limiting/eliminating the tricks that international companies use to avoid taxes like this. Note: To me tax avoidance is using legal means to lower your tax burden. Tax evasion is using illegal means. Using the former is shady, but not illegal, and we should expect companies to be immoral when it comes to saving millions of dollars.
But I also have the thought of 'why bother taxing corporations'? We suck at it, and ultimately companies are owned by individuals, everybody from fat cat industrialists to the retired grandmother who bought $100 of IBM stock 50 years ago. That makes taxing corporations both regressive and ineffective - it's regressive in that it hits those who have low incomes and low amounts of stock(mostly in retirement accounts) as much as it hits the rich. Ineffective in that the big companies have all figured out how to shelter the vast majority of their profits legally. It's the small to mid sized companies that are handicapped by actually having to pay the high US taxes.
Maybe make the corporations collect sales tax instead? What about VAT? Maybe put proper tiers on non-earned income(IE capital gains)?
My idea is to split personal income taxes into two categories - earned and unearned. Earned is salaries, piece work, etc... IE you 'did' something to earn that money. Unearned is capital gains, interest, dividends, and such, money earned from the simple fact that you 'owned' something. Your first ~$10k of income in either category is taxed at 0%, after that it's tiered in parallel like the current system. Assuming an average return rate of 5%, that's $200k in investments before you start having to pay taxes on the return, which is a good amount for emergencies, college, early retirement, and what not.
If you make as much as Romney though, you're going to be paying near the top rate, no matter how you structure your income.
I don't read AC A human right
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.
Greece is a perfect example. Also, take a look at the French revolution. Why did that happen? Because the peasants had no bread.
You can use the United States as a prime example. I'm not here to do the job of educating you, we have complimentary public schools for that. Since you couldn't be bothered to participate in your education, then you can just research crime rates in the US.
Also, since you couldn't be bothered to participate in your education, you can research the Roman Empire and its welfare system and the reasoning behind it.
In addition, since you couldn't be bothered to participate in your education, feel free to research communism and the reasoning behind it.
"I don't want more choice, I just want nicer things!"
-Jennifer Saunders as Edina Monsoon
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.
I like to pay taxes, with them I buy civilization.
Please feel free to hand your entire paycheck to the government. There is no law stopping you. It will make you much happier knowing that you are getting much more civilization than your neighbor.
I suspect, however, that you really mean that you like the concept of taxes paid by others because it pays for the control over them that you appreciate (and that you call "civilization").
That a lot of deluded "rugged individualists" falsely think they are entirely self-made and have no obligation to pay back into society amuses me.
I have an obligation to pay back into society that which it asks me to pay and I have agreed to. There is no EULA or "shrink-wrap license"; no unilateral contract. If "society" wants to promote home ownership and does so by creating tax deductions, then I will use them and feel no sorrow at paying less in taxes. Ditto for energy-efficient appliances, weatherization, charitable donations, etc. If the sum of the deductions meets or exceeds the "tax liability", then why should I have any obligation to pay at all? After all, society has told me what it expects; I have met that expectation.
This same concept applies to corporations. Obeying the laws and paying what is owed is their obligation; paying extra because you want "more civilization" isn't.
Seeing them frustrated and resentful at paying taxes makes me smile.
Why would anyone be resentful at having to pay for things that you think they should pay for but they don't? How silly of them. And isn't it such a wonderful feeling of accomplishment when you can force them to do so, and feel superior to them at the same time?
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.
When talking about income taxes, yes, you are member of the society, you benefit from such things, you should pay taxes. Companies, however, don't benefit from army, from healthcare and from any other things that society provides. In fact, when nobody uses the company, the company ceases to exist. Taxing the companies only forces the companies to spend every year the most so they don't have to pay such high taxes. For me, it is not bad if for example Microsoft holds great untaxed amount of cash this year and invests it the next year or the year after. The company is already punished for not spending their money by inflation, the income tax is just bad tool and shouldn't be used.
Complete bullshit across the board.
Example: Halliburton rebuilding the Middle East
I work in the Healthcare analytics world, a healthy population has a DIRECT correlation to higher productivity from your workforce, ergo higher profits. This is why companies track Health and Productivity Management and implement programs designed to change employee lifestyles to be more healthy.
Drop the corporate shill routine that companies don't benefit from the government. They benefit a hell of a lot more than most citizens and at a lower effective tax rate.
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.
As an individualist I'm certain you will feel quite at home away from us collectivist apes were you to transfer your residence to Somalia.
Two of my imaginary friends reproduced once
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!
If you are really at a 50% tax bracket, you need to do one of two things (perhaps both). First, get a tax adviser and second, consider moving out of New York City or wherever it is that you're getting shafted for on local / state taxes. That's about 20% higher than it should be unless you have some really odd financial issues.
Faster! Faster! Faster would be better!
And some folks believe they should get a lot while giving very little.
This is called tax avoidance and is legal, immoral and unjust.
If Facebook thinks 0.3% tax is reasonable than their fire protection should be limited to a tall glass of water, their access roads should be reduced to trampled grassland and they should dispose of their sewage waste using government-provided paper bags.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
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.
Yes. The solution is helping people to be gainful members of society. We all know that.
The problem is that the current right wing philosophy is cut cut cut, with no money to spend "Teaching a man to fish". He just wants to take the fish away and say "Go get a job" when there are few jobs to be had, even for those that are motivated and educated.
I'm not arguing Welfare is good, but it's a far sight better than simply throwing people to the wolves.
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facebook is not real - it doesn't drive on roads and it doesn't shit. Employees and shareholders who do these things paid for them with their own taxes.
However, the world we currently live in has few if any countries where the overwhelming majority agree that the bulk of government spending is on important things for the government to spend money on.
Indeed. In America, between federal, state and local governments more than $21,000 per person is spent per year (FY 2012).
Now think how much easier it is for someone that only pays $4,000 a year in taxes to go around not thinking that their tax dollar isnt being greatly wasted.... after all, even if "only" 80% of the money is being wasted, they still get (on average) $4,200 worth of value for their $4,000.... a net win for them.
Its when they turn around and say that the rich arent paying their "fair share" that it goes into the absurd.. The guy paying $20,000 a year in taxes is also only getting (on average) $4,200 worth of value with that same 80% waste.. its simply not possible to explain to this person that their $20,000 isnt a "fair share" because the claim is absurd.
A case in point. We spend more per student than any other country on earth, and what do we have to show for it? Very large amounts of systemic waste, obviously.
"His name was James Damore."
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...
It also can't have profits and can't pay taxes - it's a company, not a human being.
So I suggest we get rid of the notion of "companies". It's harmful to society. Instead, let's have the employees and the shareholders responsible for taking the profits and for paying taxes. That'll be a lot simpler, and would require them to actually relocate to the Cayman Islands before they can enjoy the tax benefits.
And if specific employees and/or shareholders find ways not to pay taxes, then the government can find ways to withhold services such as education, health, roads and sewage. Agreed?
wrong.
The government is accountable to the people, when all is said and done,. Money doesn't vote, people do.
We have seen time and time again where the government has fought and one against a multitude of corporation and their abuses.
With strong government regulations, you can limit damage corporations do. With out it it means corporation can do whatever they want. We have seen that. we have seen the results from that, it's not pretty.
The Kruger Dunning explains most post on
So?
They question is not about taxes. Just saying Lower taxes otr raise taxes is meaningless.
It's don't to create an emotional argument and fear mongers.
What do you get for those services? Do you kniow what it takes to keep a city running? the 1000's of miles of infrastructure?
Safety, etc...
For the record I make nearly 100K, and pay 21% in taxes, all said and done. Minus fuel taxes, I don't want to figure that out. No time, but it's not much. I get about 8 gallons of fuel a week, most weeks.
If my taxes jump to 40%, but in exchange health care an all education was free I would be fine with that becasue it has value to myself, and more importantly, society as a whole.
The Kruger Dunning explains most post on
The US defense budget is over $700 billion [2], which as a component of the overall US federal budget is only exceeded by Medicare/Medicaid and social security [3], and is also equal to the sum of the military budgets of the next 14 highest military spending countries [2], which for a country of only 4.5% of the world's population (compared to China's 19% and India's 17%) [4] is rediculous by any stretch of the imagination.
The US spends more than $450 billion [1] just to service the interest on its debt, which is more than 3% of total GDP [1, 5], and that's with an average debt interest rate of just 2.5% [7] on a debt of over $16 trillion [6]. "As the debt ratio increases, the exchange value of the dollar may fall. Paying back debt with cheaper currency could cause investors (including other governments) to demand higher interest rates if they anticipate further dollar depreciation. Paying higher interest rates could slow domestic U.S. growth." [8].
The debt to GDP ratio for the United States now exceeds 100% [9], which is a position shared by countries also with financial problems like Ireland and Greece. The US may have its own financial printing press, but inflationary pressure will either limit its use or risk total collapse of the US dollar as a global reserve currency in favor of the Euro or IMF SDRs [10].
Anyone who denies that the USA is in deep financial doodoo is living in laa laa land with their head in the sand.
[1] http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
[2] http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
[3] http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png
[4] http://en.wikipedia.org/wiki/List_of_countries_by_population
[5] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
[6] https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=12122700.txt
[7] http://www.treasurydirect.gov/govt/rates/pd/avg/2012/2012_11.htm
[8] http://en.wikipedia.org/wiki/United_States_public_debt
[9] http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
[10] http://en.wikipedia.org/wiki/Bancor
Corporation also cost society money. SO they shoudl also pay. 20% on the net no deduction except RnD, 30% on any money leaving the US.
I would also tax 100% on all net over a billion dollars.
Put that money into RnD, or hire more people, or get it taxed.
What people discussion economics seem to for get, is that the only way money has value to society is if it is moving.
When you pay a dollar to buy and orange, the dollar is only worth something at the moment of the transaction. In fact, it's worth exactly 1 orange. The orange gets consumed, but the dollar will be a dollar again at it's next transaction.
Yes, yes, I know it's radical idea. Lets all horde are money and watch society crumble. The we can use it to heat out homes as we go back to living in mud huts and afraid of the lightning god.
The Kruger Dunning explains most post on
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.
I guess thats we birth rates are down.
You might want to get a reality check on that opinion.
The Great Society worked. The money for it has been stripped by the pubs.
I used to be poor. very poor. No one I knew was having more kids for money. Even the most poor not that doesn't make sense. However low education, emotional stability and boredom can lead to more sex.
The problem we have no has NOTHING to do with Lyndon Johnson. A bunch of banker and financial 'experts' from around the world at the largest institutions lied, cheated, and stole. THAT is why we are in this mess.
Had Greece(and the world) been given correct data, they would not be in this mess. Note that countries with strongly regulated financial system weren't hit that badly at all. Countries with good education and health care system. The impact they did feel was do to the country with not so well regulated financial systems being hit.
It's the same thing. Every financial scandal that impacted the economy at large cause the pubs to scream 'it's the social program fault' and never at the actually liars who created the mess.
no no, all these problems are becasue poor people have kids.
The Kruger Dunning explains most post on
Well, when a fire erupts at the Facebook HQ, simply don't send the firemen when Facebook calls and tell them to contract a private firefighting company. They will have the fire put down by that company and will simply pay an invoice for the services rendered. :-)
Actually, this is exactly what used to happen before (roughly, and depending on where you live) the early to mid 19th century. The earliest firefighters in modern times were either volunteers or employed on a private contractual basis (ie they would literally turn up at the scene of a fire and try to negotiate payment before putting it out). As insurance developed in the 17th century, naturally insurers started to provide their own firefighters to reduce the losses sustained to fire. The insurers in London, for example, set up a system after the Great Fire of 1666 whereby each had their own group of firemen and they placed "fire insurance marks" on each house so that they could identify whether their unit was supposed to fight a particular fire or not. Eventually the usual pressures of commerce meant that these units usually merged into a single unit covering the whole of London across multiple insurers in the early to mid 19th century, however, still under a model of privately funded provision.
What happened next could be viewed as an example of "corporate welfare"... the insurers lost large sums in a few particularly bad fires and they decided as a result of this that they would lobby the government to provide a beefed-up firefighting service at taxpayers' expense. At the same time, there was a growing movement to "profesionalise" the remaining voluntary provision in other parts of the world which led to them becoming paid rather than voluntary. Following the model set in the insurer-led markets, these areas paid their firefighters out of the public purse.
I would suggest that it seems the right thing to do to fund fire defence by extracting the costs directly from insurers on an incident basis rather than simply relying on general taxation - i.e. if my house catches fire, my insurer would then have to pay the government back the cost involved in calling the fire brigade out (you can argue about the corner case of how to deal with people who are uninsured and whether you fund their costs from general taxation, a levy on those who are insured, or by trying to pursue them individually). One benefit is that the insurers then have even more incentive (beyond just the threat of loss) to ensure that fire prevention measures are adequate. You could also compare this to the idea that the court system should be self-funding through filing fees etc. Just because it's a legitimate use of a government monopoly, doesn't mean it has to be funded through general taxation.
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.
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.
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.
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.
Example: Halliburton rebuilding the Middle East
PEOPLE in charge of Haliburton profit from it
a healthy population has a DIRECT correlation to higher productivity from your workforce, ergo higher profits
PEOPLE are using the healthcare services ad PEOPLE realize the profits
Roads and other public infrastructures allow your employees to come to work and customers to purchase your product/service.
true, both employees and customers pay for their right to use the infrastructure with their taxes plus property taxes dependent on value dependent on quality of infrastructure are paid on company's real estate
Police and Fire departments help to protect corporate assets from theft and destruction.
property taxes cover that
Legally Corporations are defined as people, only they officially lack the capacity to vote aside from lobbying. However, if you are really going to push the people ticket, then Capital Gains tax needs to be raised to 35% across the board instead of the 15% cap as the investors have the most to gain by corporate operations. The normal workers are actually producing and already paying full income tax on their wages while investors merely front capital with no additional effort.
Wow. Wow. Wow.
That article appears to be a textbook example of the old adage "Correlation does not imply causaility". It cherry picks data, then tries to imply a correlation and causation without examining the other factors that affect such data points.
And it's funny, but I work with a lot of people from India, all of them say they are better off her than at home and they all want to bring their families here (many have). If they're so happy, why are they in such a hurry to get out of India?
Crime rates in india are also hard to determine, because reporting policies are different, classification policies are different, etc.. many crimes are simply not reported in public statistics and many crimes are mis-classified.
For instance, Rape in india is almost never reported. It's widely under-reported world-wide, including in the USA, but in countries like India where it is a huge societal stigma (the woman is considered to be at fault in a rape), and where women are considered property (and thus rape is not considered possible in many situations that would otherwise be).
Then, let's not even get into the huge levels of corruption within the police and other law enforcement organizations.
Now, having said all that, India is still probably below the US for crime, but part of that is historical. People have always been poor, for centuries. There is also a relatively peaceful religion in place in much of the country, which helps, as well as the fact that most people grow up in large families that are self-policing, with people living in the same household.. that means that people have a place to live and a large number of people to pool resources.
None of that is true in the US. Plus, weapons are hard to find in India, while in the US there are more guns than people.
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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.
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