For Microsoft, $93B Abroad Means Avoiding $30B Tax Hit

walterbyrd (182728) writes "Microsoft Corp. is currently sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore, according to disclosures in the company's most recent annual filings with the Securities and Exchange Commission. The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company's home state of Washington."

Comments

Okay... and?

[beelsebob]

Why should they repatriate it? What's wrong with keeping money earned abroad, abroad?

Re:Okay... and?

[Anonymous Coward]

The summary, of course, missed Microsoft's legitimate response to people's enquiries:

The company says it has "not provided deferred U.S. income taxes" because it says the earnings were generated from its "non-U.S. subsidiaries” and then "reinvested outside the U.S.”

It's almost like the editors wanted to publish a biased article or something. Scandalous.

Re:Okay... and?

[meerling]

Because most, if not all, of the big companies use various means to offshore money that should have US taxes paid on them oversea so they can avoid it.
Apparently Microsoft is no exception to that, nor even all that exceptional if that's all they've "shielded" from US taxation.

Re:Okay... and?

[gbjbaanb]

because they don't pay tax on it there either.

Re:Okay... and?

[BitterOak]

because they don't pay tax on it there either.

But shouldn't that be up to the foreign countries where the money is earned? If a country doesn't want to tax earnings in its borders, that's their business. It doesn't mean the US or any other country should have a claim on it.

Re:Okay... and?

[Trepidity]

If it's earned there, yes, though that's not always the case. Companies play a lot of games with where they choose to book expenses and income. Lots of companies are officially earning a lot of money in places like Luxembourg and Ireland that is really earned elsewhere.

Re:Okay... and?

[alen]

because washington state wants to tax every penny microsoft makes around the world

Re:Okay... and?

[Notabadguy]

RTFA.

-Microsoft develops product in U.S, generating tax credit for R&D.
-Microsoft shifts ownership, or "Profit Rights" of product off-shore, to say....The Bahamas.
-Microsoft Bahamas subsidiary sells U.S developed product to Americans.
-Microsoft Bahamas claims all profit. Microsoft America gets all Tax Credits.

And that's how they avoid paying taxes. It's legal. It might not be "right," but it's legal, and won't change until our nation's useless politicians do something about it. This debate has been going on for a decade or more.

Re:Okay... and?

[Kohath]

and people who didn't earn the money want to spend it.

Re:Okay... and?

[BitterOak]

without US political and military might, Microsoft wouldn't be nearly as safe doing business abroad as they are now.

i don't know exactly how much they should owe for this service, but it's stupid to say it's nothing.

By your logic everyone in the world should pay taxes to the US for keeping the world a safe place to do business.

Re:Okay... and?

[IamTheRealMike]

The USA is unique in considering all income earned anywhere to be taxable in the USA, even if that money never actually touches America. No other country has a tax system that works like this, perhaps because it's stupid. Instead they have double taxation treaties so if money is earned abroad and you pay taxes there, you can spend the money back home at your HQ without it being taxed a second time. America doesn't, so companies that earn a lot of money abroad simply don't spend it on their HQ. They find things to spend it on in other countries instead.

Re:Okay... and?

[BitterOak]

RTFA.

-Microsoft develops product in U.S, generating tax credit for R&D.

And paying salaries to U.S. employees who pay income tax on it and spend their money in the US, thereby also paying US sales taxes.

-Microsoft shifts ownership, or "Profit Rights" of product off-shore, to say....The Bahamas.

Which only makes sense, since the US is one of the few countries in the world to tax people's oversea earnings. Only makes sense then that people and companies would move those profits offshore. If tax policies in the US were more reasonable, Microsoft wouldn't have to do that.

-Microsoft Bahamas subsidiary sells U.S developed product to Americans.

On which those Americans pay sales tax.

-Microsoft Bahamas claims all profit. Microsoft America gets all Tax Credits.

But as you said in your first part: the tax credits are for R&D, not for making profits!

Re:Okay... and?

[Lawrence_Bird]

Fail.

They are paying taxes on them. In the domiciles abroad. Near the end of TFA is:

The report also found that “28 these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.”

It is conveniently politically correct to refer to other countries with lower tax rates as "tax havens". The reality is if the US tax rates were at (or at least near) the foreign rates than funds which could be repatriated would be. Note the word could. No company would bring home 100% as they are operating businesses overseas and need to invest there too.

Re:Okay... and?

[Livius]

If the money actually is abroad, then it shouldn't be taxed.

But I have a feeling there's something about the definition of 'abroad' that we might be missing.

Re:Okay... and?

[TubeSteak]

Why should they repatriate it? What's wrong with keeping money earned abroad, abroad?

The tax law, as originally written, once required companies to remit the difference between local taxes and US taxes.
So if Irish taxes are 10% and US taxes are 25%, Ireland gets its 10% and the USA gets 15%.

Then the law was changed so that as long as the money stays overseas, [Company] can defer having to pay that 15%.

Instead of actual business being conducted overseas, the majority of those deferred earnings are the result of transfer pricing.
US Company will give its I.P. to an overseas subsidiary and then license the I.P. back in order to shift profits to the low tax country.

Transfer pricing is legal, but the USA and Europe are looking into it, as it shifts taxable income out of their jurisdiction.
There's also questions about how corporations (fraudulently) value the assets being transferred and licensed.

Re:Okay... and?

[Richy_T]

Unfortunately, there's a political agenda in the current climate that is pushing that abiding by tax laws which means paying less taxes is the same as tax evasion and is tantamount to stealing. This witch hunt is often lead by those who wrote the laws in the first place.

Re:Okay... and?

[TubeSteak]

Instead they have double taxation treaties so if money is earned abroad and you pay taxes there, you can spend the money back home at your HQ without it being taxed a second time. America doesn't,

[Citation Needed]

Rebuttal: The US system works by requiring Corporations to pay the difference between the foreign and US taxes.
Citation: http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

/Personal income is likely to get double taxed, but that's not what we're talking about.

Re:Okay... and?

[Richy_T]

While the dollar is still the currency of choice for buying oil, they are.

Not likely to last much longer though the rate they're printing them at.

Re:Okay... and?

[Anonymous Coward]

Not exactly. More like this:

1. Microsoft US develops products through R&D in the US, claiming a tax credit for R&D activities in the US (all of which must be conducted in the US to qualify for the R&D tax credit).
2. Microsoft Bahamas purchases from Microsoft US the right to exploit (i.e. sell) the developed technology outside the US.
3. Microsoft US pays tax in the US on the profits from the payments from Microsoft Bahamas.
4. Microsoft Bahamas makes sure NOT to exploit (i.e. sell) the developed technology in the US, because that would likely cause it to become taxable in the US, generating a HUGE tax liability.

Media articles usually struggle with tax structures. Because they’re complicated. That’s why tax lawyers get paid a lot of money.

Re:Okay... and?

[JackieBrown]

What I am confused about is how this is happening. I keep hearing on slashdot that the US has the lowest tax rates for corperations and the rich so how come it is cheaper (tax-wise) to go to another country - especially since from what I have read here, the US treats it's employees the worst as well as underpays them while stealing their benifits.

Surely, those comments were not just US hating propaganda?

Re:Okay... and?

[Em Adespoton]

I'd be interested to know if the majority of that money was in Ireland. If it wasn't, this is a non-story. If it was... well, there are ways of making the money "non-US" and you can rest assured that MS knows ALL of these ways. Their tax lawyers are just as good as IBM's IP lawyers.

Re:Okay... and?

[Livius]

They should have forfeited and been required to repay any research credits or expense deductions when the intellectual property was sold.

But it didn't happen by accident. Lawmakers knew perfectly well what they were doing.

Re:Okay... and?

[Technician]

Why single out Microsoft? Many multinational corporations have overseas divisions and not all income is brought home to be taxed, then sent back abroad to pay the workforce.

Re:Okay... and?

[SuilAmhain]

It's only resting in our account...

Re:Okay... and?

[IamTheRealMike]

Citation: http://www.irs.gov/Businesses/... [irs.gov]

Despite the URL, that page only talks about individuals, not companies. Can you show me I'm clearly wrong for companies? Additionally it says the states do their own thing as well and some simply ignore tax treaties.

That said, I might well be wrong! The US tax code is notorious for being amongst the worlds most complicated, in fact it probably is the most complicated tax code in the developed world at least. So if I'm wrong that would not be surprising, although even if your statement is correct for companies too it still amounts to paying tax on the same income twice. Even if it's at a lower rate than US income, this is nonetheless double taxation.

Re:Okay... and?

[phantomfive]

Why should they repatriate it? What's wrong with keeping money earned abroad, abroad?

A main issue is that when the money is abroad, it is being invested abroad, instead of coming home and investing in projects in America.

Re:Okay... and?

[phantomfive]

/Personal income is likely to get double taxed, but that's not what we're talking about.

You can deduct taxes paid to foreign governments, even as a private citizen.

Re:Okay... and?

[crazyvas]

To add to that: generally, personal income is not double taxed either in this respect. Anything one hears to the contrary is usually political FUD.

Quote below from IRS. Heck, they even point out how to give them the least of your money. http://www.irs.gov/Individuals...
--------
If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

Taken as a deduction, foreign income taxes reduce your U.S. taxable income.

Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.
---------

Re:Okay... and?

[thaylin]

Fail.

They are paying taxes on them. In the domiciles abroad. Near the end of TFA is:

The report also found that “28 these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.”

It is conveniently politically correct to refer to other countries with lower tax rates as "tax havens". The reality is if the US tax rates were at (or at least near) the foreign rates than funds which could be repatriated would be. Note the word could. No company would bring home 100% as they are operating businesses overseas and need to invest there too.

0 is 10% or less

Re:Okay... and?

[lucm]

No company would bring home 100% as they are operating businesses overseas and need to invest there too.

Especially if they are held hostage like Nokia in India.

Re:Okay... and?

[superwiz]

Why would that be a rebuttal? The money is still earned on territory outside of the US. It's invested outside of the US. Why should US collect taxes on non-US activities?

Re:Okay... and?

[ArmoredDragon]

You can deduct it from your income, just the same as if it were a business expense, but they still tax you on that money anyways. If you had made that money inside of the US instead of somewhere else, you'd be taxed quite a bit less.

Or to put it another way, that's just sugar coating the fact that you're still really being taxed twice just for the privilege of having a US citizenship, even if you've never had anything to do with the US (which is why the US is pretty much the only country whose citizenship people will renounce for tax purposes.)

Re:Okay... and?

[Anonymous Coward]

which is why the US is pretty much the only country whose citizenship people will renounce for tax purposes

Which any citizen is free to do at any foreign consulate or embassy. If you don't like the rules and want to live somewhere else then fine, but you don't get to vote or enjoy other privileges of citizenship without shouldering the mandatory responsibilities, one of which is paying income taxes.

Re:Okay... and?

[hairyfeet]

Look up "Double Dutch" and "Irish Whip" tax schemes to see why, these megacorps have it set up so it doesn't matter where the money is made, by the time they get done bouncing it around its socked away tax free.

Re:Okay... and?

[LordLimecat]

By that logic the companies have already paid taxes regardless of this article because they use the dollar.

Whatever sense that makes.

Re:Okay... and?

[ArmoredDragon]

To add to that: generally, personal income is not double taxed either in this respect. Anything one hears to the contrary is usually political FUD.

That's very much incorrect. It's treated as a deduction, which means you still pay the US tax anyways, in addition to the foreign tax.

Say you live in Australia and made $200,000USD one year. Australia would tax roughly $68,500USD off of it. That leaves $131,500 to you. The US then taxes you on that amount. How much of that you pay in US taxes depends on the source of the income, and how you're employed. If you're self employed, your tax liability for that amount is 28% base plus 16% to make up for US payroll taxes (your typical US worker sees about 8% payroll taxes and the employer pays the other half, but since you have no employer you have to pay the whole thing.) If this is earned income (i.e. not dividends, not capital gains, not income made from charging rent) then you're liable for about $36,500 of it, otherwise you're liable for the whole thing.

So yeah even though you're potentially taxed less, you're still very much taxed twice, possibly even completely double taxed depending on how you make your money.

This is why some people who make a lot of money overseas and have jack diddly to do with the US will go out of their way to renounce their citizenship. The US really is the only country that actually sends you a bill just for being a national, regardless of whether or not you make use of its utilities.

Re:Okay... and?

[byornski]

Yes, because Ireland is only a holding place for money that should be paid to the US and not part of Europe at all

Re:Okay... and?

[byornski]

Pretty sure that would be Irish revenue but you would have to pay customs taxes for the package.

Re:Okay... and?

[Bing Tsher E]

This is Slashdot. They have to post topics like this once in awhile to make up for taking away the bill-borg icon. Or the nerds would revolt.

Re:Okay... and?

[Microlith]

And paying salaries to U.S. employees who pay income tax on it and spend their money in the US, thereby also paying US sales taxes.

The 1% pushing the tax burden off on the 99%, who can't play international games with their finances.

Which only makes sense, since the US is one of the few countries in the world to tax people's oversea earnings.

No, that's not relevant. They play a shell game to make sure that all earned profits are earned in areas with little to no tax, then claim they made no profits. Or, if you're GE, you claim you made a $1B loss while reporting billions in profits to your shareholders.

If tax policies in the US were more reasonable, Microsoft wouldn't have to do that.

Like what, pledging fealty to corporations and letting the people of the country subsidize their existence?

On which those Americans pay sales tax.

Which helps local municipalities only - ignoring that sales taxes are regressive.

But as you said in your first part: the tax credits are for R&D, not for making profits!

Indeed, they claim the tax credits and losses in the US, but the profits outside. It's a massive scam, really.

Re:Okay... and?

[funwithBSD]

Ah... Now you see the logic of Empire.

Re:Okay... and?

[Richy_T]

Effectively. Technically it's different but the effect is similar. The governments preferred companies see the benefits (Sachs et al)

Re:Okay... and?

[khchung]

/Personal income is likely to get double taxed, but that's not what we're talking about.

You can deduct taxes paid to foreign governments, even as a private citizen.

Which is the entire point, which, it seems, everyone rebutting GP missed.

If you are an American, working in country X, and paying $Y tax in country X. If $Y is less than the tax $Z you would have paid in America, then you need to pay American Govt $Z-Y (i.e. Z was deduct, which is your point), even though your work, your job and your company have absolutely no relationship with America. You paid $Z-Y just for the privilege of being an American citizen.

If you were from most other country in the world, working abroad in country X, then you pay $Y tax in country X, and then END OF STORY.

Most of countries in the world don't tax their citizens working and living abroad at all, which was GP's point, there is nothing to deduct.

Re:Okay... and?

[sillybilly]

Yeah, they are trying to create an economy out of complicated tax code, and provide a job to tax preparers. If everyone could do their taxes, then you'd have less economic activity, and less tax revenue. But creating a negative value, just to create jobs, to give someone a job over it is equivalent to me walking down the street and smashing windows in with bricks because it creates jobs for contractors, economic activity, and more tax revenue for the government. Fuck economic activity like that. You need an economy to create the things that are useful, not economic waste for the sake of having an economy and jobs. Why can't you live without a job, or "less" job, say 1/10th of what you work in a year? Because of the cost of living. And food you can almost earn in a single month in each year that would last you the entire year. Much of the other cost is bullshit.
As far as MS goes. they might be thinking of jumping ship, and going where there are smarter people, as that's their core holding, brainpower, nothing else. And it's not like there are no smart people in the US, after all they are the same breed as the Irish immigrants, British, Italian, German, even Japanese, etc. The major difference is the educational system. Life goes to where it can find water, flies go to where they can find shit, and MS goes to where they can find well educated brainpower.

Re:Okay... and?

[tomhath]

You can deduct it from your income, just the same as if it were a business expense

It's a credit against tax due not a deduction from income. Big difference.

Re:Okay... and?

[Anonymous Coward]

It's almost like the editors wanted to publish a biased article or something.

Or a truthful one, see below.

And to those apologists who claim it's the laws that are at fault, not Microsoft, the thing to remember is that all those millions of dollars Microsoft has used to buy those laws were extorted from their customers. They charged massive monopoly rents for their lockin-based software so they could have enough cash to buy as many legislators as they needed to avoid funding infrastructure and civil protections in the states and countries they're based in.

Microsoft has a massive system by which to avoid taxation, detailed in another Senate report from last September.

American companies keep 60 per cent of their cash overseas and untaxed, some $1.7 trillion, according to a U.S. Senate HSGAC Permanent Subcommittee on Investigations released in September 2012.

That report used Microsoft as a case study for the leaps and bounds that U.S. corporations go through to minimize their tax exposure, and illustrate the current flaws with the international corporate tax regime.

The Senate investigation found that Microsoft reduced its 2011 federal tax bill by a whopping $2.43 billion — or 44 per cent — by using a wide, international network of controlled foreign corporations and the exploitation of various loopholes in the U.S. corporate tax code.

According to Microsoft, the company paid $3.11 billion in federal taxes in 2011.

According to the full Senate report, Microsoft Corp does 85 per cent of its research and development in the United States. Of its 94,000 employees, 36,000 are in product R&D. The company had reported revenues of $69 billion, but with a federal tax liability of $3.11 billion only paid an effective federal tax rate of 4.5 per cent. That’s much lower than the top statutory rate of 35 per cent for corporations.

Puerto Rico
Microsoft Operations Puerto Rico (MOPR) is the company that pays for the right to sell Microsoft products in the Americas. MOPR makes digital and physical copies of Microsoft software and sells it throughout the United States and the rest of the Americas through different regional distributors.

When an American buys a copy of Microsoft Office in a Best Buy in Manhattan, that was produced in and shipped from Puerto Rico.

MOPR is owned by a Bermuda-based entity, MACS Holdings, which in turn is owned by Round Island One, a fully owned Microsoft subsidiary that is based in Bermuda but operates in Ireland.

To review: An American buys a copy of Microsoft Office at Best Buy in Manhattan. Best Buy bought that copy of Office from a Microsoft distributor. The regional distributor bought that copy of Office from Microsoft Operations Puerto Rico. Microsoft Operations Puerto Rico is owned by MACS Holdings, which itself is owned by Round Island One, which itself is owned by Microsoft Corp.

The reason for that convoluted supply chain — the reason why that copy of Office wasn’t just shipped from Microsoft Corp in Redmond, Washington to Manhattan — is that 47 per cent of the profits from that sale go to Puerto Rico, untaxed by the U.S. federal government.

Those profits were taxed by Puerto Rico at an effective rate of 1.02 per cent in 2011, a massive savings from the U.S. corporate tax rate of 35 per cent. Over three years, Microsoft saved $4.5 billion in taxes on goods sold in the U.S. alone. The company saved $4 million per day by routing domestic operations through Puerto Rico.

Ireland
Microsoft Ireland Research (MIR) is the entity that buys into the R&D cost sharing agreement in exchange for the right to sell Microsoft in Europe, the Middle East and Africa.

MIR doesn’t actually create or sell any products to any customers. Instead, MIR immediately licenses the Microsoft intellectual property rights to Microsoft Ireland Operations Limited

Re:Okay... and?

[compro01]

That's very much incorrect. It's treated as a deduction

Read the site.

If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

You're assuming it is always option 2 (acts as a deduction), and ignoring option 1 (acts as a credit).

Re:Okay... and?

[PPH]

One can only hope. And that's the major problem that people have with our tax laws. Corporations can game the system. Individuals cannot. One way or another, lets all work with the same set of rules.

People want either less corruption or more opportunities to participate in it.

Re:Okay... and?

[PPH]

when the money is abroad, it is being invested abroad,

Perhaps there's more stuff abroad worth buying. Its all about ROI and customers. And it appears that it is becoming more profitable to sell and invest overseas.

Re:Okay... and?

[phantomfive]

Perhaps there's more stuff abroad worth buying. Its all about ROI and customers.

That is surely the case some of the time, but when there's an ROI penalty of -30% for moving the money back into the USA, that tips the scales hard in one direction.

Re:Okay... and?

[PPH]

If you don't like the rules and want to live somewhere else then fine,

Which is basically what Microsoft did with some of its revenue producing operations. They moved to Ireland and became Irish companies.

Re:Okay... and?

[jader3rd]

-Microsoft develops product in U.S, generating tax credit for R&D.

And paying salaries to U.S. employees who pay income tax on it and spend their money in the US, thereby also paying US sales taxes.

That is so incredibly irrelevant. We're talking about the taxing of one legal entity, don't try and push the conversation to knock on affects to other legal entities.

Oh, what the heck, let's talk about those other legal entities. If Microsoft paid all of the taxes from revenue generated in the US, those employees would have a lower tax bill, and could have better lives. As a matter of fact, perhaps all citizens of the US would have a lower tax burden. That might really help those who are just trying to find a way to eat every night.

Re:Okay... and?

[Anonymous Coward]

Not sure if trolling or ignorant... so I'll give you the benefit of the doubt. Apple pioneered it, but an increasing number of tech companies rig up a series of subsidiaries based in Ireland and the Netherlands and assign their profits to those subsidiaries to escape US taxes, while the parent companies still take advantage of all the perks of basing themselves in the US.

Re:Okay... and?

[fustakrakich]

Which of course sucks... American individuals have to pay taxes on money they earn living outside the border. Why shouldn't these people? Don't answer, the question is rhetorical. If they want to be an American corporation, they should pay American taxes. But... we will do nothing to elect people that would write the appropriate laws. Therefore this article is meaningless. Nothing will come of it, except some advertising revenue.

Re:Okay... and?

[fustakrakich]

So what? You still have to file. That is wrong.

Re:Okay... and?

[fustakrakich]

Why should US collect taxes on non-US activities?

Because they can, and there is insufficient resistance to stop them.

Re:Okay... and?

[fustakrakich]

...won't change until our nation's useless politicians do something about it.

"Useless" politicians will never do anything about it. It's up to you to elect more useful ones that might. Otherwise forget about it, and stop blaming the winners. They're just following orders.

Re:Okay... and?

[martin-boundary]

But shouldn't that be up to the foreign countries where the money is earned? If a country doesn't want to tax earnings in its borders, that's their business. It doesn't mean the US or any other country should have a claim on it.

It makes perfect sense if you think of Americans as property.

For example, suppose you're this guy in America, and you buy a very expensive mainframe system. Now for various reasons, you decide to send it to Sweden, maybe you have a friend there and you're in business together. So the friend uses your mainframe for his shop 24/7, and makes lots of money. It's all happening in Sweden, using Swedish electricity, Swedish premises, Swedish sysadmins, etc.

But it's your mainframe, so you'd like a cut of the profit or at least some rent money. If your Swedish friend doesn't want to collect the money in Sweden and send it to you, that's his business, no?

Now replace you and friend with America and Sweden, and replace mainframe with you.

Re:Okay... and?

[Fjandr]

Most of it is not actually earned abroad, due to accounting practices. MS USA sold all of their IP to MS Ireland, and pays MS Ireland a fee for every copy of MS software sold in the USA. That fee is almost certainly for an amount nearly (or actually) equal to the sales price. As a result, they claim a write-off on every title sold that's just about equal to that title's sales price. As a result, MS USA says they earned nothing on those titles. It's all based on technicalities that are unavailable to real people. Only corporations are allowed to account for profits and losses in such a way as to reduce their tax bills to nothing.

Re:Okay... and?

[thetoadwarrior]

Why does the US expect citizens abroad to pay tax after a certain certain threshold or how it some how believes if you travel to the US during a vacation since you are paid for that vacation then you're earning money in the US. For you see being American is so great that you must forever file your taxes and pay your way for being on America's planet.

Since corporations are people then the same should apply.

Re:Okay... and?

[Barsteward]

They should just pay the taxes in the country it was earned, not set up elaborate tax avoidance schemes. the world would be a better place if all the global companies paid the tax they should.

Re:Okay... and?

[tlhIngan]

It's almost like the editors wanted to publish a biased article or something. Scandalous.

Exactly. It's exactly the same thing Apple, Google and everyone else has.

Hell, in Apple's case, it's cheaper to borrow the money in the US than repatriate it. When Apple needed $17B, they took on debt against future US earnings, because it would cost them less to pay back that principle plus interest than it would if they were to bring in the money from offshore into the US (which I think would've been close to $30B to get $17B they could spend). And Apple has very rarely taken on debt intentionally.

An unintentional side effect is well, Apple, Microsoft and Google have to spend that money outside the US, so they hire developers and other people to work outside the US as well.

Re:Okay... and?

[IamTheRealMike]

Actually citizens of other countries can vote without paying taxes there, if they moved abroad. And the USA will actually refuse to let you renounce citizenship if they suspect you're doing it for tax purposes.

Stop attempting to make this seem reasonable. The brutal truth is that the Land Of The Free enslaves its own people and demands tribute from them no matter where they run, no matter how they try to hide. Washington will steamroller anyone who gets in the way of it extracting money from people who in many cases have only vague or non-existent connections to America.

Not only is this morally wrong and in blatant violation of common sense (US taxpayers abroad get no benefits for that tax), but it endangers everyone else because in the eyes of America anyone who isn't an unpaid voluntary agent of the IRS is a "helping people evade tax". And worse it might give other countries bad ideas - they're all just as broke as the US.

Re:Okay... and?

[Sadsfae]

Which of course sucks... American individuals have to pay taxes on money they earn living outside the border. Why shouldn't these people? Don't answer, the question is rhetorical. If they want to be an American corporation, they should pay American taxes. But... we will do nothing to elect people that would write the appropriate laws. Therefore this article is meaningless. Nothing will come of it, except some advertising revenue.

Not necessarily, if you live abroad and pay taxes elsewhere you can claim the foreign income tax credit and forego paying up to $97K or so of taxable income in the U.S.

"If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to $97,600 of your foreign earnings. In addition, you can exclude or deduct certain foreign housing amounts. See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later. "

http://www.irs.gov/Individuals...

http://www.irs.gov/publication...

Re:Okay... and?

[gbjbaanb]

Hey! Can I myself also claim that I paid my share through the taxes paid by the companies who made a profit with my money?

But they don't pay taxes, remember, the argument is that taxes are paid by you because of the money you earn thanks to the companies just being there.

So I rather think that its more like that if I've already paid Microsoft's taxes via my salary then I can consider it perfectly ok to take as much of Microsoft products for free.

Re:Okay... and?

[PPH]

but when there's an ROI penalty of -30% for moving the money back into the USA,

You missed my point. That money is never coming back.

Re:Okay... and?

[dcw3]

To a certain extent, citizens can using the Foreign Earned Income Exclusion http://www.irs.gov/Individuals.... You basically get a break on the first $97,600 of income...tax free.

Re:Okay... and?

[dcw3]

Is there a point? If U.S. currency crashes, we'll all have larger issues. So, what?

Re:Okay... and?

[dcw3]

So, it's wrong to put the burden of proof upon the taxpayer as to what they owe? Don't get me wrong, I'm no IRS fan. But, how are they supposed to determine if you're a tax cheat, or if you've got a legitimate claim to owing nothing without you filing?

Re:Okay... and?

[Pseudonym]

Which any citizen is free to do at any foreign consulate or embassy.

For some definition of "free". It's a complex process which takes months and costs hundreds of dollars, and the US can still refuse. Or, even more likely, they can decide on a whim that you're doing it for tax purposes, and severely limit the amount of time that you're allowed to spend in the United States compared with a "normal" citizen of your adopted country. This famously happened to Terry Gilliam.

Re:Okay... and?

[Bite The Pillow]

Since apple seems to have started this, and other companies followed suit, Microsoft paid little if anything for these laws.
At least one party in America has been hesitant to change those due to self interest, not lobbying.

Given that, support your statement hat it took millions of dollars in customer money for Microsoft to buy these laws.

The thing to remember in your post, according to you, is pure ignorance. Which is a pity, because you show promise in understanding.

Re:Okay... and?

[fustakrakich]

So, it's wrong to put the burden of proof upon the taxpayer as to what they owe?

Absolutely, if the government claims you owe money, they damn well better provide the documents. Your banks and employers send it all in every month. They are the ones who should do all the paperwork. That's one of the things my taxes should pay for. Internal Revenue Service, not litigators.

Re: Okay... and?

[Impy the Impiuos Imp]

Disadvantaged? Capitalism is making their average health, wealth, and longevity skyrocket. No, if concern over the poor in third world countries is your metric, the only people to say "fuck you" to are western liberals who decry this as a "race to the bottom".

Re:Okay... and?

[fustakrakich]

We already know that! We've known it for centuries. We always talk about what should be done, but we never put anybody in charge that will do it. Instead we elect carny hucksters, used car salesmen who "bring home the bacon". Really, what else do you expect under such circumstances?

Re:Okay... and?

[lsatenstein]

It's almost like the editors wanted to publish a biased article or something.

Or a truthful one, see below.

And to those apologists who claim it's the laws that are at fault, not Microsoft, the thing to remember is that all those millions of dollars Microsoft has used to buy those laws were extorted from their customers. They charged massive monopoly rents for their lockin-based software so they could have enough cash to buy as many legislators as they needed to avoid funding infrastructure and civil protections in the states and countries they're based in.

Microsoft has a massive system by which to avoid taxation, detailed in another Senate report from last September.

American companies keep 60 per cent of their cash overseas and untaxed, some $1.7 trillion, according to a U.S. Senate HSGAC Permanent Subcommittee on Investigations released in September 2012.

That report used Microsoft as a case study for the leaps and bounds that U.S. corporations go through to minimize their tax exposure, and illustrate the current flaws with the international corporate tax regime.

The Senate investigation found that Microsoft reduced its 2011 federal tax bill by a whopping $2.43 billion — or 44 per cent — by using a wide, international network of controlled foreign corporations and the exploitation of various loopholes in the U.S. corporate tax code.

According to Microsoft, the company paid $3.11 billion in federal taxes in 2011.

According to the full Senate report, Microsoft Corp does 85 per cent of its research and development in the United States. Of its 94,000 employees, 36,000 are in product R&D. The company had reported revenues of $69 billion, but with a federal tax liability of $3.11 billion only paid an effective federal tax rate of 4.5 per cent. That’s much lower than the top statutory rate of 35 per cent for corporations.

Puerto Rico

Microsoft Operations Puerto Rico (MOPR) is the company that pays for the right to sell Microsoft products in the Americas. MOPR makes digital and physical copies of Microsoft software and sells it throughout the United States and the rest of the Americas through different regional distributors.

When an American buys a copy of Microsoft Office in a Best Buy in Manhattan, that was produced in and shipped from Puerto Rico.

MOPR is owned by a Bermuda-based entity, MACS Holdings, which in turn is owned by Round Island One, a fully owned Microsoft subsidiary that is based in Bermuda but operates in Ireland.

To review: An American buys a copy of Microsoft Office at Best Buy in Manhattan. Best Buy bought that copy of Office from a Microsoft distributor. The regional distributor bought that copy of Office from Microsoft Operations Puerto Rico. Microsoft Operations Puerto Rico is owned by MACS Holdings, which itself is owned by Round Island One, which itself is owned by Microsoft Corp.

The reason for that convoluted supply chain — the reason why that copy of Office wasn’t just shipped from Microsoft Corp in Redmond, Washington to Manhattan — is that 47 per cent of the profits from that sale go to Puerto Rico, untaxed by the U.S. federal government.

Those profits were taxed by Puerto Rico at an effective rate of 1.02 per cent in 2011, a massive savings from the U.S. corporate tax rate of 35 per cent. Over three years, Microsoft saved $4.5 billion in taxes on goods sold in the U.S. alone. The company saved $4 million per day by routing domestic operations through Puerto Rico.

Ireland

Microsoft Ireland Research (MIR) is the entity that buys into the R&D cost sharing agreement in exchange for the right to sell Microsoft in Europe, the Middle East and Africa.

MIR doesn’t actually create or sell any products to any customers. Instead, MIR immediately licenses the Microsoft intellectual property rights to Microsoft Ireland Operations Limited (MIOL

Re:Okay... and?

[phantomfive]

What exactly do you think I meant by an roi penalty of -30%?

Re:Okay... and?

[aaarrrgggh]

While it has been 15 years since I had to deal with this, using your numbers you would owe no US taxes. You exclude the first roughly $100,000 in income, so the US would see your income as $100k, and you paid $68k in taxes already, and would have only owed about $25k in the US.

The only gotcha is that you need to spend less than 35 days in the US per year.

The capital gains is a bit of a bitch if you have anything meaningful, but that is a the price of entry into the US market.

Re:Okay... and?

[dcw3]

So, it's wrong to put the burden of proof upon the taxpayer as to what they owe?

Absolutely, if the government claims you owe money, they damn well better provide the documents. Your banks and employers send it all in every month. They are the ones who should do all the paperwork. That's one of the things my taxes should pay for. Internal Revenue Service, not litigators.

They do tell you how much you owe. But, if you wish to pay less, it's your responsibility to do so, not theirs. The bureaucracy is already too big, we don't need more of them to do your work. Yes, they have all the data you indicated. What they don't necessarily have is access to all the data and reasons you deserve deductions.

Now, I personally think we all pay too much, and get too little, but if you're one of those who think all taxes are evil, well I can't help you.

Re:Okay... and?

[aaarrrgggh]

It is hard to make that work in the US because taxes for a person and corporation are essentially treated the same (sans FICA/FUTA). This eliminates many of the easy tax shelters for individuals; a low corporate tax rate re-opens these issues.

Re:Okay... and?

[fustakrakich]

The whole "deduction" thing should go out the window. It's corrupt by design to protect speculators and hoarders. And I still insist that individuals not be burdened with the paperwork. It's a job for company and government accountants. They can send the bill (or check) like any other utility, and I shall have the right to challenge it if I find any errors. Gotta make it their problem.

Re:Okay... and?

[karbonforms]

Nicely done. Drink!!

Re:Okay... and?

[shutdown -p now]

As far as US is concerned, if you are a US citizen, then you have the obligations of a US citizen. What other citizenship you may hold is immaterial, and US is not going to treat you in any special way on account of that. If your citizenship duties are in conflict, then US will still demand that you fulfill your duties as an American citizen first, and hold you responsible for that.

Re:Okay... and?

[sociocapitalist]

The summary, of course, missed Microsoft's legitimate response to people's enquiries:

The company says it has "not provided deferred U.S. income taxes" because it says the earnings were generated from its "non-U.S. subsidiaries” and then "reinvested outside the U.S.”

It's almost like the editors wanted to publish a biased article or something. Scandalous.

Would be interesting to know how much of those earnings generated from non-US subsidiaries were fees paid by Microsoft America themselves, one way or another (i.e. licensing fees) to get the money offshore to start with.

Re:Okay... and?

[sociocapitalist]

because they don't pay tax on it there either.

But shouldn't that be up to the foreign countries where the money is earned? If a country doesn't want to tax earnings in its borders, that's their business. It doesn't mean the US or any other country should have a claim on it.

It hasn't been earned in those countries though, just shifted there after having been earned elsewhere (i.e. in the US or other high tax countries) by a shady loophole mechanism.
http://www.bloomberg.com/news/...

Re:Okay... and?

[MooseMiester]

We have the highest corporate tax rates in the world. The lefties perpetuate the myth that the "evil rich" and "evil corporations" aren't paying "their fair share" whilst they increase taxes over and over again. And then, when these companies and individuals react in predictable ways they cry foul, shame on them.

Sadly the truth is that they use these taxes to BUY VOTES not do good for the rest of us. But the kool-aid of "punish the successful" is a strong elixir.

It's gotten so bad under this administration that companies are pulling up stakes and leaving altogether - witness Burger King. It's common sense, take my money, I'll get mad. What we should be doing is rewarding and celebrating success, so more people want to be successful instead of making it a crime.

Re:Okay... and?

[ksheff]

The problem is not the lack of a VAT, it is the US corporate tax rates are much higher than the rest of the industrialized world. That is why there is so many news stories about US companies buying other companies that are headquartered in countries with a lower tax rate, and then using that location for tax purposes. It's why Burger King is buying Tim Hortons. I don't see how a VAT is going to put any more pressure on offshore companies than "on-shore" companies. Or are you thinking that since the tax is included in the advertised price that they'll somehow be more competitive than they already are when it comes to pricing their products?

Re:Okay... and?

[ksheff]

and yet the number of people who are renouncing the US citizenship because of tax and other financial reasons is on the increase due to idiotic laws.

Re:Okay... and?

[ksheff]

and even if $Z-Y =0, the person still has to file a tax return with the IRS. For some that can be a significant expense and/or stress that they wouldn't have needed to endure if they were a citizen of some other nation.

stupid government

[bumba2014]

I think this is not avoiding taxes. This is more a proof that governments are asking too much taxes...

Re:stupid government

[knightar]

I agree, United States has some of the highest corporate taxes in the industrialized world in addition to many loopholes that allows corporations to pay nothing on the money they do report as income. They really need to close the loopholes and if that means forcing companies to pay their fair share to be it, Then we can lower the corporate taxes and companies wouldn't pay as much but they would be paying something, and it'll level out the same as it is now and it'll be better for everyone. I would love to see the US go from the highest Corporate taxes to the low end of the spectrum.

Re:stupid government

[Anonymous Coward]

I agree, United States has some of the highest corporate taxes in the industrialized world [...]

Bullshit. This has been disproven time and time again by, uhhh, FACTS! The maximum corporate tax rate in the U.S. is 35%. The effective tax rate on most coprporations in the U.S. is more along the lines of 12-17%. Just Google "effective corporate tax rate" and you will find all the information you need. The number quoted in the trolling article is based on the maximum, not the actual rate that might get applied to the earnings.

What do you mean, "repatriated"?

[Anonymous Coward]

That is money Microsoft earned offshore. It's foreign money. If Microsoft moved that money to the US, the money would not be "coming home", become American money again. It never was American money.

Re:What do you mean, "repatriated"?

[cduffy]

"Earned" offshore, when 99% of the work is not the sales but the engineering -- which is very much onshore effort.

This is a place where Europe's VAT approach has it right.

It's legal, move on

[Anonymous Coward]

Any corporation that does take advantage of tax law loop holes is stupid. Bitching about it here is also stupid. Go ahead and see what happens if you try and change the laws in the US. Nothing, no more income, less jobs, etc. If you want to attract business, make it cheaper here, not in the Ireland, Bermuda, or the Far East.

How can it be...

[Anonymous Coward]

I'm not a US citizen, nor I live in the US, but AFAIK, US citizens have to keep paying taxes even if they live abroad, until they resign their US citizenship. Why doesn't this apply to US companies? Even worse.. if they are people (or they have the same rights as US people), why can they do this?

Re:How can it be...

[Anonymous Coward]

(GP here) By the same logic I used in my post: even if you change your name while abroad, you are still the same person, and have to keep paying taxes. Besides, the US is already applying extra-territorial measures against a number of countries (Cuba/Iran/Russia/etc.). If the US govt. doesn't apply this to corporations, it's because the govt. doesn't want it.
I will reply to my own question: this all shows that the US is all about corporatism.
One man talked about this some 80 years ago:

I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

http://en.wikipedia.org/wiki/Smedley_Butler#Lectures
The tragicomic part is that US people are expecting these corporations to give something back... They will just leave and find a more profitable place. Corporations are said to be people, but in reality, they don't even have a nationality, their only authority is money.

Why should they?

[doghouse41]

So why this assumption that they should be paying tax on this money to the US taxman?
Presumably it was all earned outside of the US.
As a UK taxpayer, I'd be much happier if they would pay UK tax on it (maybe we should offer them a deal - 1% of something is a better deal than 50% of nothing ;-)
And no doubt French, German, Japanese, Australian, etc tax payers would feel the same way.

So what's so special about the Americans?

Re:Why should they?

[I'm New Around Here]

We are the ones who get a "Participation Trophy" just for showing up.

Re:Why should they?

[war4peace]

Globalization is interesting.

Say my manager is from the USA (he was, for about 3 years, now I have another manager who's from Denmark). I live in Eastern Europe.
My manager gives me a project. I, working in Eastern Europe, do the heavy lifting. My manager sits on his ass and asks "are we there yet?" every day, because it's all he's able to do. When work is finished, who's actually making the profit?
With hardware, it's relatively easy. The product is build *here* so the profit is registered *here*. But with software... it's basically "whatever's more advantageous for the company".
Which ain't that bad either. Competition is competition, even tax-wise. If government A has a tax of 1% and government B has a tax of 50%, what would YOU do, as a company? The main reason why government A has a tax of 1% is to attract money which otherwise would go to government B.
Microsoft's simply taking the best of all worlds, so to speak. Any individual or company would do the same, unless they're pure-breed, brainwashed nationalists... or clueless as to how finance works.

Re:Why should they?

[Cederic]

With hardware, it's relatively easy. The product is build *here* so the profit is registered *here*.

The hardware is built from raw materials. They come from somewhere else, and who can say we aren't internally recharging a reasonable market rate for their purchase.

The hardware is built to a design. How much should we charge for that design? Which company and which country should we make that charge from?

The hardware is built for a cost. Why should we sell it for anything more than that cost? We could even sell it for a loss. Which of our subsidiaries should buy it ready for resale?

The hardware only exists because there is a market demand for it. We have tremendous expenses building up that market demand. We'd better transfer the cost of marketing too.

Profit? What profit?

How can it be...

[Anonymous Coward]

Is Adam Opel AG the same company as General Motors? Is General Motors UK Limited the same company as Adam Opel AG? etc.

Re:Don't feed the parasites!

[I'm New Around Here]

And?

I thought people were allowed to have their own beliefs in this country without others attacking them for it.

I don't agree with a lot of people's personal, political, and religious beliefs, but that doesn't mean I should attack them based on those beliefs.

You can attack them for making stupid arguments in support of their beliefs, no problem. But to call someone out like you did, simply because they might believe something you don't like, is bullshit.

Leave 93 billion sitting abroad

[Anonymous Coward]

because fuck 63 billion; I want it all.

Re:And ironically

[Dragon Bait]

Bill Gates openly supports creating an income tax in Washington to pay for education.

Just because Bill Gates is successful at the capitalist game doesn't mean that he is a capitalist. Same goes for Warren Buffet.

Re:Don't feed the parasites!

[Nimey]

Freedom of speech isn't freedom from consequences of your speech, sweet cheeks. He's free to associate with a disgusting ideology that holds certain people inferior because of how they're born, I'm free to mock him for it. For that matter, I'm free to mock your ignorance.

Re:Don't feed the parasites!

[war4peace]

It's called "ad hominem" and the Internet is full of it.

Re:And ironically

[Nimey]

I'll take "No True Scotsman" for $1000, Alex.

tax by transaction

[ganjadude]

all the more reason to end the stupid tax code that we have. I had a theory I put together the other day, im sure im not the first but hear me out

What if we had a 1 penny tax on transactions, any transaction. For example there are 300 million bank transactions in the country a day. thats 30 million in taxes per day, JUST on bank transactions.

add in all the rest, fast food, shopping plazas, and wallstreet with micro/nano transactions

i need to do some more of the math, but if we add up 1 penny to all transactions (regardless of costs/ or items) everyone will be paying their fair share, no more loopholes, and things would be good.

Re:tax by transaction

[Bengie]

Groceries are not taxed, may want to use another example.

Re:tax by transaction

[Richy_T]

No dude, it's *every* transaction. Like when you give your kid their pocket money or take a penny from the "need a penny" dish (oh, wait...)

Re:tax by transaction

[lgw]

And how would subscriptions work? And why wouldn't everything be a subscription? A VAT can be made to work, but this is so game-able.

Plus, you're missing the key fact about government: they never give up a tax. Any tax you propose will be in addition to existing taxes, not in place of them.

Re:tax by transaction

[CrimsonAvenger]

What if we had a 1 penny tax on transactions, any transaction. For example there are 300 million bank transactions in the country a day. thats 30 million in taxes per day, JUST on bank transactions.

Alas for your theory, we don't have ten cents to the dollar in the USA. 300 million bank transactions is only $3 million.

Note, by the by, that $3M is about enough money for 25 seconds of Federal spending....

Re:tax by transaction

[St.Creed]

What, no Value Added Tax?

Re:tax by transaction

[rogoshen1]

Take a Penny? from the crippled children????

Re:tax by transaction

[penix1]

No it wouldn't since he was only using bank transactions. His idea is to charge that penny on ALL transactions including every transaction made on the stock markets which counts in the hundreds of millions if not billions a day. Add in all the other transactions that occur daily and it is easily in the trillions a day.

Re:tax by transaction

[byornski]

Alternatively, if they were 1c more expensive, these transactions just wouldn't happen. More businesses would incorporate overseas and the same behavior would continue without the US getting any revenue.

Re:tax by transaction

[Richy_T]

The uncrippled ones are harder to get away from.

Re:tax by transaction

[St.Creed]

Okay. Well, actually I applaud that. The tax on groceries hits the people with the lowest wages the hardest (relatively), reducing their intake of vegetables even more. Locally, I think the VAT is reduced to one third of the standard percentage for essentials like food.

Re:tax by transaction

[ganjadude]

i said transactions, using a gift card is still a transaction

Re:tax by transaction

[ganjadude]

if you are paying monthy, it would be 12 cents, yearly, only a penny

Re:tax by transaction

[ganjadude]

really? because i would like to believe the more money you have, the more transactions you are making, therefore being taxed more....

Re:tax by transaction

[ganjadude]

agreed on the rounding error, but I still believe that something like this could work, as i said i was only using bank transactions, not all transactions

Re:tax by transaction

[gbjbaanb]

including every transaction made on the stock markets which counts in the hundreds of millions if not billions a day

sure about that? The LSE says about 500,000 transaction per day (about £3bn per day but the proposal was per transaction)

Visa says about 200 million txns per day., with Mastercard (100m) and Amex (14m) you're still way off "trillions".

so overall, I make that less than 400 million - $4m in tax revenue per day, still quite a bit short.

(other stat I found said 26.2 billion credit card transactions per year in the US alone.)

Re:tax by transaction

[dcw3]

I'm not sure where you live, but that's incorrect here.
States that tax groceries (rate if not fully taxed): Alabama, Arkansas (3%), Hawaii, Idaho, Illinois (1%), Kansas, Mississippi, Missouri (1.225%), Oklahoma, South Dakota, Tennessee (5.5%), Utah (1.75%), Virginia (1.5% + 1% local option tax), and West Virginia (5%).

Re:tax by transaction

[Trepidity]

There's no consistent US/EU difference on that. Some states in the U.S. apply full sales tax to groceries (Alabama, Hawaii, Kansas, etc.), some apply a reduced tax (Georgia, Illinois, etc.), and some exempt groceries entirely (California, Texas, etc.). The same goes in the EU with VAT: some apply the full rate (Denmark), others apply a reduced rate (Belgium, France, etc.), and some exempt groceries entirely (UK, Malta).

Re:Citizens United says...

[tomhath]

Do they want to collect taxes form people who work in other countries? Good luck with that.

Re:Don't feed the parasites!

[war4peace]

You bastard, you're wrong!!!

I suck dicks for free.

Re:Tax them anyway

[MerlynEmrys67]

Please have congress pass a law that says they have to pay taxes on money kept overseas. Then have the president sign it. The second that you do that - the company will comply with the law as it is written as opposed to complying with the law as you wish it had been written.

Re:Don't feed the parasites!

[jriding]

These are the comments I love. These are the same people that bitch that the government is spending more then it brings in. They are also the people that bitch that we are just "printing money". Hey here is an issue where people are stealing services and should be paying in as everyone else does so maybe we are not bankrupt... nope.. they will hold the party line. No taxes, the government should learn to repair roads, offer services, etc by magic....

Re:Citizens United says...

[NotSanguine]

Do they want to collect taxes form people who work in other countries? Good luck with that.

Actually, that's the law

Re:Tax them anyway

[tomhath]

Most likely they will comply with the law by moving their corporate headquarters to the Bahamas.

$93B abroad...

[hsthompson69]

...means $30B less they need to charge consumers. Or $30B more they can spend on their workers. Or $30B more they can provide to their shareholders.

In fact, thinking about it, the only way the government really gets screwed is if they charge consumers less, since that's also less tax revenue - both giving more money to their employees, or their shareholders, will end up triggering more taxes.

Taxes may be necessary, but they should be as minimal as possible.

Re:Don't feed the parasites!

[I'm New Around Here]

Freedom of speech isn't freedom from consequences of your speech, sweet cheeks. He's free to associate with a disgusting ideology that holds certain people inferior because of how they're born, I'm free to mock him for it.

Personally, I agree that you are free to mock him for it. It just seems like so much hypocrisy when the liberal mantra for the last twenty years is "You can't judge me!" Now that you have a voice, all you can do in the face of opposing views is attack and mock. In my view, your attitude is no different than what you claim his attitude is. Intolerance for people who are not in your group.

Go on, attack and mock those who you don't agree with. Attack me all you want. It just shows your intolerance. Not that those who agree with you care that you are all intolerant. Intolerance is now the greatest virtue of the liberal mind, as long as it is in support of liberal ideology.

For that matter, I'm free to mock your ignorance.

Ignorance?

I guess you missed the rhetorical nature of my comment.

Anyway, thanks for the reply. I don't agree with your viewpoint, but you have the right to have it.

Re:Don't feed the parasites!

[ultranova]

I thought people were allowed to have their own beliefs in this country without others attacking them for it.

Why would you think so, when the very First Amendment guarantees freedom of speech?

But to call someone out like you did, simply because they might believe something you don't like, is bullshit.

However, attacking someone for spreading an outright evil belief is perfectly okay.

Re:Don't feed the parasites!

[I'm New Around Here]

I know. I just have to point it out every so often.

The silly part is they now think I support whatever group that guy has in his sig, when a few of those anti-whatever positions would attack me and my family.

by the way, you had a great comeback to the AC.

Re:Don't feed the parasites!

[Nimey]

Go on, attack and mock those who you don't agree with. Attack me all you want. It just shows your intolerance. Not that those who agree with you care that you are all intolerant. Intolerance is now the greatest virtue of the liberal mind, as long as it is in support of liberal ideology.

It's amazing, isn't it, just how many conservative victims are on /. these days. Bonus points for whining about someone not tolerating your intolerance, and for whining about it in an intolerant way.

And here I thought conservative ideology was that we should man up and not worry about hurt feelings or political correctness. Shows what I know.

Re:Don't feed the parasites!

[I'm New Around Here]

So are you attacking him for being gay, or for supporting legalization of drugs? Why are you a homophobic supporter of Big Pharma?

Re:Anti-American company

[Richy_T]

It's destroying the company.

So finally Microsoft decided to do the right thing?

Re:Don't feed the parasites!

[I'm New Around Here]

As I say in a reply further down, a few of those anti-whatever positions you mention would be directed at me and my family. It isn't my beliefs I'm defending, intolerant or otherwise.

As for political correctness, you are the one advocating it. I'm just pointing it out.

I'm going to insert a portion of my previous post that I decided to remove before posting, because it may have been a misinterpretation on my part. From your response, I now know it is spot on.

I would suggest working on your reading comprehension. But from recent discussions I've had with your fellow liberals, I know you can't possibly read something from another person's viewpoint to get a better understanding. You will read my comments with the greatest ill intent, because I will neither agree with you, nor knuckle under to your views.

Even after having it explained to you, reading from another's view is an impossible task. Which is ironic, because that probably is what you would want your opponents to do so that they would have a better understanding of people they disagree with.

Yes, I cut that from my previous post, in case I was wrong. I needn't have worried.

Been there, done that.

[EdmundSS]

Microsoft are simply copying what Apple does. IBM and others are doing it too.

They're all hoping that they can get the tax law changed so that they can repatriate the profits without paying the current tax rate.

Re:Don't feed the parasites!

[I'm New Around Here]

And I'm trolling you for intolerance, when my whole point is intolerance for people with opposing views. You're no smarter than you think I am.

Re:Don't feed the parasites!

[Nimey]

Hoo, boy. You're equating supporting affirmative action and gay marriage with white supremacy. You are a fucking piece of work.

*plonk*

Re:ALL Corporations

[innocent_white_lamb]

Define "operating in the US". Does it include a business who has a US-based supplier, for example, even if the said business doesn't actually sell any products or services in the US?

Re:Don't feed the parasites!

[Nimey]

That's an amazing lack of self-awareness in your criticism, but one expects that from posters here.

Re:Don't feed the parasites!

[I'm New Around Here]

You don't see how one racist viewpoint is equivalent to another racist viewpoint?

As I said above, you can't possibly see the world from anyone's view but your own.

Re:Don't feed the parasites!

[MildlyTangy]

And?

I thought people were allowed to have their own beliefs in this country without others attacking them for it.

You thought wrong. You thought VERY wrong.

We all have the right to mock you for a disgusting racist white-supremacist belief. I would go as far to say that we all have a moral obligation to call you out for that hideous filthy belief you support.

And you can take away my right to Free Speech from my cold, dead hands. You try to take that away from me, and I will fight you every step of the way until my very last breath.

Clones

[boojumbadger]

Obviously what American people need to do is clone themselves in low tax jurisdictions and have all their earnings paid to their clones. Isn't that effectively what the big corporations do?

Re:Don't feed the parasites!

[war4peace]

I am entitled to have some fun every now and then :)

Re:Don't feed the parasites!

[Dogtanian]

Freedom of speech isn't freedom from consequences of your speech, sweet cheeks. He's free to associate with a disgusting ideology that holds certain people inferior because of how they're born, I'm free to mock him for it. For that matter, I'm free to mock your ignorance.

Go on, attack and mock those who you don't agree with. Attack me all you want.

The implication in your reply being that he mocked and attacked you because he disagreed with you?

Either that's a strawman or you really weren't paying attention.

The paragraph you replied to was mocking you not because he disagreed with you on a matter of opinion, but because your belief that "people were allowed to have their own beliefs in this country without others attacking them for it" was *factually wrong* (and by implication showed that you really don't understand what "freedom of speech" does and doesn't get you.). End of story.

Re:Don't feed the parasites!

[Dogtanian]

To play devil's advocate in "I'm New Around Here"'s defefence, it was the user "Third Position" who posted the racist link in his sig, and the comment from "I'm New" himself wasn't (necessarily) condoning the views expressed.

What he *was* clearly doing was defending Third Position's "right" to express his opinion without being attacked for it. Which is, of course, stupid and ignorant, because no-one has such a "right" under the freedom of speech in the US constitution (which I assume is what "I'm New" has misunderstood when he referred to what was "allowed" in "this country"), despite many thinking it does. Freedom of speech obviously cuts both ways, otherwise it's not true freedom of speech. (Anyone making such a deal about it should have realised this already.)

But that misunderstanding doesn't *necessarily* mean he's a racist... just stupid and ignorant.

Re:Don't feed the parasites!

[I'm New Around Here]

You may be surprised to learn I am not conservative. Let me enlighten you a bit:

I am not religious. I don't believe the Bible or Koran or Vedas are divinely inspired. If all men could live in peace with no religion, it wouldn't bother me at all.

I think all drugs should be decriminalized. Not legalized, because that implies the government is 'permitting' their use. It isn't the government's business what I put into my body. Also, I don't do drugs and rarely drink alcohol.

I told people twenty years ago that the government shouldn't be in the marriage business. Let the churches marry people, let the government keep their noses out. This would include eliminating marriage benefits/penalties in taxes, inheritance, and other government concerns.

Gambling and prostitution are illegal because the government knows they can't effectively tax them, except in tightly controlled situations like lottery tickets, casinos, and brothels in one county in Nevada. Decriminalize those activities as well.

You apparently think I am a racist too. I don't even recognize faces when I am looking at people. I barely register their race or sex while talking to them. I have had conversations with people, when ten minutes later I couldn't tell you if they were black or white, male or female. I discuss views, not skin color or body differences.

Also, if you don't think that rules out racism, maybe you should ask my wife who is of Asian descent, my daughter who is then half-Asian, or my other family members who are various mixtures of white, black, hispanic, or asian. Surely if I am a racist, they would have noticed.

Maybe my politics would reveal my true intolerant self. However I voted for Barack Obama in 2008, even though I didn't agree with his politics. I felt it was time for a person with a different world view (other than white guy who lived his whole life in the US) to hold the office. I've stated this before, if you want to somehow verify my claim.

I will admit, I did not vote for Obama in 2012. I voted for Dr. Jill Stein of the Green Party. I disagree with almost every thing the Green Party has for a plank. But again, she was the candidate I liked, and she is the candidate I chose to vote for. My personal beliefs are not the most important part of my decisions. As Spock said, "The needs of the many, ...."

You seem to have jumped to the conclusion that I am a big bad conservative because I called out someone for attacking another poster simply for having different views. You further seem to believe I automatically support those views, just because I believe that person has a right to have them and speak them.

By the way, have you seen my sig? What conservative would have such a sig?

Brain-dead tax policy.

[jcr]

I don't think there's any other country in the world that taxes money coming INTO the country from foreign operations.

The US tax code is insane.

-jcr

Re:Brain-dead tax policy.

[Anonymous Coward]

I don't think there's any other country in the world that taxes money coming INTO the country from foreign operations.

Umm, that's called profit.

Company A has a wholly-owned foreign subsidiary Company B, if Company B has a good year and makes lots of money, Company B sends a dividend to the stockholder, Company A.

The same would happen if both Company A and Company B were in the same country.

There are tax consolidation rules that apply to treat them as one entity for tax purposes http://en.wikipedia.org/wiki/T...

The US tax code is insane.

Maybe, but not for the reason you cite.

The double-Irish Dutch sandwich lets you create a corporate structure that is resident nowhere for tax purposes. That's insane, but kind of cool: http://en.wikipedia.org/wiki/D...

Re:Brain-dead tax policy.

[jcr]

It is asking the company to pay its fair share.

"Fair share", my ass. The FAIR share is zero.

-jcr

Re:Don't feed the parasites!

[I'm New Around Here]

Calm down Francis.

First, as I have stated a few times above, it was rhetorical.

Second, supporting someone's right to their own beliefs does not mean I share those beliefs.

Third, Nimey is the one who wished to take away someone's right to Free Speech. As would you. Which means you would only fight as far as is convenient, which is probably where it is too far past the couch to reach the remote and bag of Cheetos.

Re:Don't feed the parasites!

[I'm New Around Here]

You are wrong. He was specifically not attacking me because of my simple rhetorical phrase. He was attacking me because he thinks that I don't agree with his views, or he thinks I agree with the views of the person he originally attacked.

He even says so:

It's amazing, isn't it, just how many conservative victims are on /. these days. Bonus points for whining about someone not tolerating your intolerance, and for whining about it in an intolerant way.

He assumes I am a conservative, and that I have the same intolerance as the OP. He is wrong on both counts.

I can see how it appears that he is attacking my specific phrase, but he showed his true intentions soon enough.

Re:Don't feed the parasites!

[I'm New Around Here]

Thank you for the defense.

Also, do I have to make a [Rhetorical] tag for future statements of a similar manner?

Re:Citizens United says...

[stanjo74]

If you mean "US Citizens" by "people", yes, US citizens must file with the IRS all income earned, even abroad, while being abroad, working for abroad, and all possible permutations of "abroad".

The more you tax something...

[ChemGeek4501]

The less you get of it. One of those damn Econ 101 rules.

Wait a second!

[kimvette]

Wait a minute. Let's follow legal reasoning.

Corporations are people, right? When a person lives and works overseas, even though the money is earned overseas, they're still supposed to file a return and pay taxes on those earnings, right? How can Microsoft claim legal personhood, and then neglect to pay taxes on their offshore earnings?

Re:Wait a second!

[byornski]

I don't think you owe taxes to any country unless you are a US citizen abroad and then you owe taxes to the US. See this

Re:Wait a second!

[msobkow]

Clearly you've never worked anywhere but the US if you think that.

No matter where you live and work in the world on a visa, you'll be expected to pay the local income and sales taxes on the money you earn while working there.

Re:Wait a second!

[Bite The Pillow]

They sold profit rights to their Bahamian cousin. He holds on to it until the next tax amnesty.

Re:Wait a second!

[sociocapitalist]

Wait a minute. Let's follow legal reasoning.

Corporations are people, right? When a person lives and works overseas, even though the money is earned overseas, they're still supposed to file a return and pay taxes on those earnings, right? How can Microsoft claim legal personhood, and then neglect to pay taxes on their offshore earnings?

IANAL but I believe it's because each company is a separate person. The company MS USA is not the same 'person' as the company MS Bahamas.

Re:Don't feed the parasites!

[Sardaukar86]

Feeding the troll.. in style. I like it!

Re:Don't feed the parasites!

[LordLimecat]

Im not clear what intolerance you saw in his post that youre trying to defeat. So far youre CLAIMING intolerance but I dont see it.

Re:Don't feed the parasites!

[LordLimecat]

Second, supporting someone's right to their own beliefs does not mean I share those beliefs.

Given your user handle it may be appropriate to warn you: On slashdot, speaking up for someone means you must burn alongside them.

Re:And ironically

[byornski]

Yep. Should a player who wins one game with straight flush be immediately declared a poker champion? I don't know, he's stopped playing.

tax by transaction

[Anonymous Coward]

You've invented a regressive tax - great if your goal was to reward the wealthy at the expense of the poor.

Don't forget the Nokia and Skype purchases

[SpzToid]

Notice the numbers in TFA are following the Nokia and Skype purchases from several years ago. Skype cost Microsoft about 8 or 9 billion. Nokia cost Microsoft about 3 billion dollars (50% less than Ballmer paid for the Los Angeles Clippers basketball team, and using his own money).

In other words, The U.S. based Microsoft Corporation (HQ'd in Reno, NV to avoid paying taxes to Washington State) bought those non-US companies with off-shored income having paid very little tax to anyone, for anything. You and I can't buy companies so easily, but Microsoft can, and did.

Google paid 1.5 billion dollars for prime London real estate to build their office there, with the same type of Non-US, double-Dutch sandwich money. This is the way the game is played. And these large companies seriously lobby the US congress for a special tax repatriation holiday, as a way to negotiate a lower rate, if they are to chose to pay US taxes.

At least when Facebook paid 16 billion dollars for WhatsApp, they didn't use non-taxable offshore money, because they bought a US company.

Re:Don't forget the Nokia and Skype purchases

[SpzToid]

one correction to what I just wrote above: Steve Ballmer paid 50% *more*, not less, for Nokia (about 3 billion dollars total) than he did for the LA Clippers basketball team (2 billion).

OK, buying the Clippers was his personal transaction using his own money, and the other was a Microsoft transaction under his authority, having ruined the Nokia Mobile Devices unit in the first place, but let's not try to split any of Ballmer's hair over that detail.

Re:Citizens United says...

[tomhath]

Of course a US citizen must file with the IRS. I meant you can't collect taxes from citizens of other countries who are working in their own country.

Re:Don't feed the parasites!

[jader3rd]

Freedom of speech isn't freedom from consequences of your speech, sweet cheeks.

Actually, isn't that what it's supposed to be. I'm sure pre-America British citizens were free to say whatever they wanted, they just had to deal with the consequences of their speech (imprisonment, torture, being blockaded from opportunity, etc). So the founding fathers of the US, put forth laws to prevent certain "consequences" from happening when people decided to speak their mind.

Re:Citizens United says...

[NotSanguine]

Of course a US citizen must file with the IRS. I meant you can't collect taxes from citizens of other countries who are working in their own country.

Got you. But others probably don't know that expats (both citizens and green card holders) are required to file US tax returns. This is not true for most other countries. As I understand it, tax payments to the country in which the expat lives are fully tax deductible and most expats end up not paying any US income tax -- but they do have to file, as you noted.

Re:Citizens United says...

[NotSanguine]

Further, if individuals need to do so, shouldn't corporations as well? Since they are "people" and all. Just sayin'.

Re:Citizens United says...

[Fjandr]

That's why corporations have subsidiaries and sister corporations. MS Ireland is not the same company as MS USA.

Re:Don't feed the parasites!

[I'm New Around Here]

Hi, i.kazmi.

I agree that calling out someone for their views is fine. I just didn't like the sense of "Don't listen to this guy, because I don't agree with him," that Nimey's post displayed. I would rather discuss someone's views, than shut them down. I guess I did assume the rhetorical nature of my statement would be more obvious to everyone.

As for conservative vs. liberal, I realize my posts overall are more conservative. But I think it is more in the "Leave me alone, and I'll leave you alone" style, not the "Everyone must go to church or face eternal damnation," style. Maybe I have to work on balancing my liberal side a bit more.

As for Democrats being right-wing, what is it (other than being beholden to corporate campaign contributions) that makes you say that? The Democrat party is for abortion, gay rights, universal health care, welfare, social services, and unions, among other liberal causes. In your opinion, what makes them right wing?

Anyway, thanks for the response.

Re:Don't feed the parasites!

[I'm New Around Here]

Good thing to keep in mind. :^)

Re:Don't feed the parasites!

[ultranova]

It was a rhetorical question. Doesn't seem so hard to figure that one out.

What was? You didn't ask a question, rhetoric or otherwise, you made a straight-up assertion. Moreover, rhetorical constructs still carry content, and your content - that people should be able to attack others without being criticized - is simply wrong.

I agree with that, but I don't see any "outright evil" in supporting a group someone belongs to.

It's okay to support a group you belong to. It's not okay to do so by trying to harm other groups.

Unless you think the blacks who support affirmative action are also outright evil, as are gay people who support marriage equality.

Since you brought this up: it's the anti-gay that really gives your game away. Gay marriage doesn't affect anyone but gays in any way, so demonstrated by countries that already have it, so opposing it is not a matter of "supporting a group you belong to", but some mix of malice and sheer insanity.

Anyway, I'm done arguing with what's almost certainly a sock puppet. Wallow in your filth if you must, just know the days you could do so in public yet pretend respectability are gone. And good riddance.

Since they're freeloading on the Rest of Us.

[sethstorm]

They aren't paying for any protection provided by the US.

Re:Since they're freeloading on the Rest of Us.

[wallsg]

They aren't paying for any protection provided by the US.

So... The US should be able to tax foreign companies on their income earned in foreign companies because of the general protection and stability that the US provides (or at least use to provide) to the world in general? Aren't they "freeloading" too? "If you want to sell in the United States we get to tax your global profits?" Is that what you want?

Re:Don't feed the parasites!

[Dogtanian]

In what sense was your argument supposed to be "rhetorical"?

Re:Don't feed the parasites!

[Dogtanian]

Whatever his motivations, it doesn't change the fact that your original assertion (and the specific point that was replied to), i.e. "I thought people were allowed to have their own beliefs in this country without others attacking them for it." was wrong, and demonstrated a fundamental misunderstanding of even the basic principle of free speech, let alone the specific details of the US constitution's version of it.

It always surprises me (*) how so many of the Americans who bleat on about "free speech" et al don't even understand the basics of either the principle or the US implementation of it, thinking- as you do- that one is free to express one's own opinion, yet somehow protected from others' right to respond to it (i.e. *their* free speech). Or- the other common misconception- that the constitutional right to protection from *government* interference in free speech is actually the right to free speech in any private place or forum.

(*) It doesn't, really- but it ought to.

Re:Don't feed the parasites!

[Nimey]

Probably in the sense that Limbaugh et al use when they say something offensive and then (after the backlash) backpedal by saying "it was humor!".

Re:Don't feed the parasites!

[I'm New Around Here]

Sorry I said "rhetorical question" when I meant "rhetorical statement". The phrase "It was a rhetorical question." is so common, that is how I accidentally typed it. If I started the line with "Aren't people allowed ...", would it have made a difference in how people replied to it? Doubtful. It isn't worth spending more time on that point.

I still don't see outright evil here, either in supporting one's favored political groups, or in groups that advocate things I disagree with. I don't see where the harm you mention comes in, since I doubt he wants to lynch blacks or stone homosexuals. Gay marriage is a false equivalency in my mind, since marriage has almost always been a religious institution, so I think the government should have no say in it anyway. A century ago my marriage would not have been legal in some states, because my wife isn't white. If the government wants to restrict marriage, the correct response is to get marriage away from government. Which is what I have been saying since the 1980s.

That being said, someone advocating for 'traditional marriage' is not evil, and they are not hoping to harm gays. They have their beliefs, probably based on their religion, and they have the right to those beliefs. The same way the polygamists believe they have the right to marry multiple women. As long as they are all consenting adults, I don't have a problem with it. And I think that will be legal in this country soon enough, since it logically follows on the gay marriage argument. I find it ironic that some supporters of marriage equality react in horror that argument, as if multiple spouses is so unnatural.

Finally, why am I "almost certainly a sock puppet"? Just because I don't believe in attacking people simply for beliefs I don't share? Because I used a rhetorical device in my first post, assuming more people would catch it? Because I am not shocked and horrified that some people have a tribal mentality? Or just because I actually respond to posts by giving my views on subjects rather than apologizing for them?

Re:Don't feed the parasites!

[I'm New Around Here]

If instead of typing:

I thought people were allowed to have their own beliefs in this country without others attacking them for it.

I had typed

Aren't people allowed to have their own beliefs in this country without others attacking them for it?

would that be a 'rhetorical question'? That was the spirit my statement was meant as.

As for now using the term 'rhetorical' for my statement, it is in the sense of either of these definitions:

language that is intended to influence people and that may not be honest or reasonable

the art or skill of speaking or writing formally and effectively especially as a way to persuade or influence people

Apparently it was a clumsy attempt.

Yes, I admit my sentence was not "honest or reasonable", because I do realize the First Amendment gives Nimey the right to speak his mind. As my next sentence pointed out, I simply don't agree with attacking people just because they have different beliefs than I do. I could have phrased that as "I don't believe in ad hominem attacks," because that is all that Nimey's post was. It doesn't matter if I agree with Nimey's views or not, I don't think that is the correct way to argue against someone's views.

Re:Don't feed the parasites!

[Nimey]

Hot Grits has been missing in action for several years.

However, you're missing:
6) Star Wars nerd that has to make references constantly, e.g. "that's no moon" in every goddamn story about a moon.

Right on, Microsoft.

[jwbales]

That's almost $30B available for productive investment that will not be poured down the US tax rat hole.

Re:Don't feed the parasites!

[bmo]

I thought people were allowed to have their own beliefs in this country without others attacking them for it.

>modded insightful

Yeah, well moderation here isn't perfect. Because you are wrong, and I will demonstrate how in the next two sentences.

You are perfectly free to spout inane bullshit.
Other people are perfectly free to call you on it.

That's how free speech works.

And your post was complete bullshit supported by toddler logic.

Have a nice day.

--
BMO

You operate in the US, you pay for the protection.

[sethstorm]

If you want to sell in the United States we get to tax your global profits?"

More like "If you want to operate in the US and want its protection, forget about using jurisdictional shell games"

Welcome to the 51st, 52nd, 53rd, 54th, 55th....

[sethstorm]

If they're willing to go far enough to pass that law, I wouldn't put it past them to pre-emptively shut down some tax domiciles.

That only makes it easier to justify.

[sethstorm]

Congratulations, you just proved that it won't fail the test of targeting one party.

Re:Don't feed the parasites!

[I'm New Around Here]

And you are very late to the party.

Re:Don't feed the parasites!

[Nimey]

Today I learned that mocking a white supremacist is racism. Who knew?

Just what I expected

[whitroth]

Of course they're using tax shelters to avoid paying taxes that they legitimately owe.

And I'm also... not sure if amused is the right word... at the GOP/Libertarians here who think this is just great... and then turn around and yell about the US national debt, and raising *their* income taxes.

                mark "there are two kinds of Republicans: millionaires and suckers"

Re:Don't feed the parasites!

[MooseMiester]

He has a point. I'm neither conservative or liberal, I agree with some of the platforms of both groups.

I have found that my liberal friends tend to be "All In or Nothing'. Either you accept the entire platform or you're the evil enemy, an ignorant hayseed bumpkin Christian Evangelical gun toting redneck. This drives me crazy. Many planks of the liberal platform are myths that simply don't work, have never worked, will never work. My liberal friends tend to cluster around short, emotional sound bytes/talking points - to which I reply "Sounds great but does it actually work?"

My conservative friends are slightly more tolerant, but only a little, and they react in horror at the thought that liberals do have some good ideas. My conservative friends are full of "facts and figures" - to which I reply "Sounds great but anyone can lie with statistics"

The Internet has, of course, widened this divide more than anyone ever imagined it would. That's the part I don't get... When did Common Sense die?

http://rense.com/general92/dea...