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New Global Plan Would Crack Down On Corporate Tax Avoidance
HughPickens.com writes:
Reuters reports that plans for a major rewriting of international tax rules have been unveiled by the Organisation for Economic Co-operation and Development (OECD) that could eliminate structures that have allowed companies like Google and Amazon to shave billions of dollars off their tax bills. For more than 50 years, the OECD's work on international taxation has been focused on ensuring companies are not taxed twice on the same profits (and thereby hampering trade and limit global growth). But companies have been using such treaties to ensure profits are not taxed anywhere. A Reuters investigation last year found that three quarters of the 50 biggest U.S. technology companies channeled revenues from European sales into low tax jurisdictions like Ireland and Switzerland, rather than reporting them nationally.
For example, search giant Google takes advantage of tax treaties to channel more than $8 billion in untaxed profits out of Europe and Asia each year and into a subsidiary that is tax resident in Bermuda, which has no income tax. "We are putting an end to double non-taxation," says OECD head of tax Pascal Saint-Amans.For the recommendations to actually become binding, countries will have to encode them in their domestic laws or amend their bilateral tax treaties. Even if they do pass, these changes are likely 5-10 years away from going into effect. Speaking of international corporate business: U.K. mainframe company Micro Focus announced it will buy Attachmate, which includes Novell and SUSE.
For example, search giant Google takes advantage of tax treaties to channel more than $8 billion in untaxed profits out of Europe and Asia each year and into a subsidiary that is tax resident in Bermuda, which has no income tax. "We are putting an end to double non-taxation," says OECD head of tax Pascal Saint-Amans.For the recommendations to actually become binding, countries will have to encode them in their domestic laws or amend their bilateral tax treaties. Even if they do pass, these changes are likely 5-10 years away from going into effect. Speaking of international corporate business: U.K. mainframe company Micro Focus announced it will buy Attachmate, which includes Novell and SUSE.
Why tack on the Micro Focus news? That is news all on its own and only remotely related to this topic.
Put down the Ayn Rand, and step away slowly.
I don't respond to AC's.
There are other ways to generate more tax revenue from business operations in the US: quit making elsewhere so much more attractive. The US has the second highest effective business tax burden in the world (second only to the United Arab Emerates, which mostly taxes foreign oil operations). Gee, I wonder why businesses born in the US look to mitigate that in whatever ways the law allows. If the law no longer allows it, there will simply be more companies actually moving, entirely, to places with a lower burden. Then the government will still miss the revenue, and they'll miss all the tax revenue they're already getting on the income taxes levied on and other economic activity generated by all of the company's current domestic employees, partners, vendors, service providers, etc.
Don't disappoint your bird dog. Go to the range.
the tax thieves aak "regulators" make new rules. Why not put some thought into changing the tax codes to be on a par wtih Ireland, Switzerland, etc instead of trying to preserve the high tax state?
Ah, the stupidity and naivete of what you say is staggering.
You people who believe you'd run a functioning society without taxes and the things it pays for are completely deluded.
You would not end up in some libertarian fantasy of a self regulating society. You'd end up in a shit hole of a society in which things like roads and schools don't work and don't get funded.
Blah blah blah. Everything you say is pure fantasy, and doesn't mean anything other than your overly romanticized notions of a world which never was, and which never could be.
I swear, Libertarians (and the idiots who read Ayn Rand) are some of the most deluded people around, second only to religious people who reject science because the facts contradict their stupid book.
If you think a modern society is possible without taxes and some things being paid for by society, you really are a drooling idiot.
A company has to convince people to hand over their resources.
A government just decrees its income under threat of violence.
For those that were unaware, this is my explanation (it should be mostly correct)
double non-taxation, otherwise known as a "Double Irish"
It takes advantage of weakness in Irish law that allows companies to not pay taxes on subsidiaries that are outside Ireland.
So a large multinational corporation, located the United States, needs to subsidiaries for this to work.
They open one subsidiary in Ireland.
They open a second subsidiary in a low, or no tax country like Bermuda.
The Irish company owns the Bermuda company.
The Bermuda company owns the US Companies IP rights for outside the US.
The Bermuda company licenses those rights to the Irish company.
The Licensing fees the Irish company pays to the Bermuda company are as close to 100% of the profits the Irish company makes as possible. Everything over that amount gets changed at the Irish corporate rate of 12.4%
The profits all get transferred to the Bermuda subsidiary where there are no corporate taxes. So they avoid all taxes on that money and other governments can't come after them because there are treaties between most countries that prevent them from charging a company based in a different partner country for taxes. This is to prevent situations where you'd pay taxes in both countries for the same money. Bermuda isn't a part of those treaties but Ireland is. So this loophole in Irish law is upending the entire Global tax system.
Please tell the truth.
Link 2015 proposed
Military is 16%, SS is 33% (double military by itself), Medicare is 27% also more than military.
Link 2014 actual
SS is $866 Billion, military is $627 Billion, Medicare is $531 Billion.
Also note SS is mandatory 100%, while military is discretionary 100%.
The military is the biggest part of the US budget? Gee.... our government disagrees with that, according to the budget they publish.
http://www.usgovernmentspendin...
Total defense spending, 22%. Pensions, 25%. Healthcare 27%.
And this does NOT include Social Security or Medicare (separate funds, they keep telling us).
"The US has the second highest effective business tax burden in the world"
Wrong. The U.S. has the second highest nominal business tax rate in the world, around 35%, but thanks to loopholes and other tax breaks no business pays that rate, instead it is less than 15%.
"I wonder why businesses born in the US look to mitigate that in whatever ways the law allows"
Wonder no more, businesses _everywhere_ reduce costs of all kinds in whatever legal ways possible including offshoring revenue and relocating headquarters. This is far from unique to the U.S. except that our laws accomodate offshoring/relocating more than a lot of other countries.
"there will simply be more companies actually moving, entirely, to places with a lower burden"
Bullshit. Companies will not simply drop out of the biggest market in the world just because they don't want to pay any tax at all.
They will still get rich, just not as rich as they might have otherwise.
About time this happened.
Next up: removing tax exemptions and tax exclusions for corporations.
Corporations aren't People.
People pay taxes and go to jail.
-- Tigger warning: This post may contain tiggers! --
Fundamental question with what should be a simple answer. We pursue enterprise to benefit ourselves and profit. Not to serve as revenue generator to the state. The state is supposed to serve the people; not the other way around, but we keep coming around and forgetting the lessons of history and the basic nature of man.
If the state were not exceeding its mandate to serve the people, taxes would be acceptable and nobody would put that much effort into avoiding them because their result would continue to appeal to our interests. But there's never enough money for the state to be all the things it is promising to be, so the states are inventing structures for self-preservation of systems fundamentally doomed to fail.
"Now, I doubt any of you would prefer a rolled up newspaper as a weapon against a dictator or a criminal intruder."
The companies involved also PAY for the campaigns and prostitutes for the "elected" officials. So this supposed "crack down" will never happen. In point of fact these tax dodges were created by and endorsed by said "elected" officials.
Why are you being modded down? The wars are almost entirely off budget. Maybe they'll make up for it with asset forfeitures..
“He’s not deformed, he’s just drunk!”
Why are you being modded down? The wars are almost entirely off budget. Maybe they'll make up for it with asset forfeitures..
They can't handle the truth. They believe in fictions written by some old lady who collected social security and received other government subsidies she railed against.
That's my guess.
But, yes, the US has an unfortunate tendancy, since the War of Independence, and the Civil War, continued to the present, of always fighting wars off budget. Which is where the budget deficits come from. Social Security pays for itself and has always had a surplus, and still does.
-- Tigger warning: This post may contain tiggers! --
Please. It doesn't matter what is or isn't mandated by the Constitution. Congress will selectively interpret "general welfare" and "interstate commerce" in any way they see fit.
The gp didn't say not to tax anything - it IS a good idea that taxpayers realize the taxes they pay. Payroll taxes hide a tremendous amount of taxation that most people have no idea they're paying.
You'd end up in a shit hole of a society in which things like roads and schools don't work and don't get funded.
So about the same but with less taxes then?
Payroll taxes do not hide anything. I think most people realize they pay FICA taxes. It usually is listed on the check
You've proven my point; there is a whole set of payroll taxes your employer pays that is NOT listed on your check stub. There's *your* FICA deduction plus a matching FICA amount paid by your employer, which you do not see on your stub. Then there's *your* SS deduction, and again a matching amount paid by your employer which is not listed. Your employer also pays an unemployment tax which is not listed on your stub.
The point is, all of these payments are, from your employer's point of view, how much it costs to get you to work. You're effectively paying all this extra tax because the money comes from you going to work. But you don't even know about it.