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Obama Proposes One-Time Tax On $2 Trillion US Companies Hold Overseas
mrspoonsi writes with news about a new proposed tax on overseas profits to help pay for a $478 billion public works program of highway, bridge and transit upgrades. President Barack Obama's fiscal 2016 budget would impose a one-time 14 percent tax on some $2 trillion of untaxed foreign earnings accumulated by U.S. companies abroad and use that to fund infrastructure projects, a White House official said. The money also would be used to fill a projected shortfall in the Highway Trust Fund. "This transition tax would mean that companies have to pay U.S. tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any U.S. tax indefinitely," the official said. "Unlike a voluntary repatriation holiday, which the president opposes and which would lose revenue, the president's proposed transition tax is a one-time, mandatory tax on previously untaxed foreign earnings, regardless of whether the earnings are repatriated." In the future, the budget proposes that U.S. companies pay a 19 percent tax on all of their foreign earnings as they are earned, while a tax credit would be issued for foreign taxes paid, the official said.
This is clearly aimed at companies abusing the "Double Irish" system. Seems like the rate should be set much higher, so that companies are punished and lose more than they would if they did the right thing and repatriated profits and paid the normal tax rates on them.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Which will be to shit all over this idea. Mind you, I agree that so-called "windfall taxes" are a bad idea, but corporation that profit from shipping jobs overseas, hiding assets overseas, etc., are nothing if not "un-American", a label the hypocrites of the far right are very fond a throwing about. So yeah, another populist idea that is going to go nowhere.
People forget that the United States has one of the highest corporate tax rates in the world, and we impose it on American companies foreign-earned capital if they should bring the money back to the States. If you are responsible to the shareholders to be stewards of their investments, you have to take whatever measures you can to avoid heavier than necessary taxes. Hence people park their money off American shores.
This seems like a cash grab to me, where the better option is to really reform the tax code to be equitable within and outside the United States; then the responsible steward of their investors money would feel more free to have that capital here. 20% of 10 million is a lot more than 35% of zero.
"Who are you?" "No one of consequence." "I must know." "Get used to disappointment."
A number of U.S. based companies have already purchase, merged with, and become subsidiaries of Irish companies. That makes profits made in the U.S. "foreign income", and everything outside the U.S. untouchable, because it will never be "repatriated".
The price of companies incorporated in Ireland is going to skyrocket even higher than it has.
It's well understood what they are doing, because the companies are quite open about it. Back in the 90s Apple invented something called the Double Irish, which is where they register is shell company with no employees or other interesting in Ireland and have all the other Apple corporations around the world pay their profits to it in exchange for using the Apple name. Starbucks, Google, Amazon and others all do the same. Since the local corporations don't make any profit (due to the "crippling" fees they pay to Apple Ireland) they pay next to no tax.
So why doesn't Apple Ireland pay tax on all the money it takes? Irish law states that corporations that are headquartered overseas pay corporation taxes where their headquarters are. So Ireland says they pay in the US, the US says they pay in Ireland... and thus they pay no tax on all that money.
Of course they are quite open about this and list the money held in Ireland as part of their balance sheets. Apple is currently taking low interest loans to pay shareholders based on the vast reserves it has in Ireland, rather than bring some of that money back and pay ~40% tax on it.
The EU is working on a fix where corporations pay tax based on how much business they do in each country. This seems to be the best that the US can come up with, given the political climate.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
In the future, the budget proposes that U.S. companies pay a 19 percent tax on all of their foreign earnings as they are earned
I wonder what the legal basis of this would be. Multinational companies that are interested in minimizing their taxes (and let's face it - who isn't?) already are incorporated elsewhere, and their earnings on U.S. operations are already taxed in the US. So, exactly what "U.S. companies" have substantial "foreign earnings"?
For example, if a corporation is incorporated in Switzerland, pays taxes it earns on Swiss operations to Switzerland, pays taxes on its U.S. operations to the U.S., and pays taxes as required by Swiss law on earnings made elsewhere, what else is there for the U.S. to tax?
....they never took Obama's budget proposals seriously. I'm not sure why the rest of us should even bother paying attention.
Alcohol, Tobacco and Firearms should be the name of a store, not a government agency.
How does this not drive more Burger Kings into Canada? If they go after McDonalds and not (now Canadian) Burger King, they drive corps out. If they go after BK, then can any country do that, tax USA based corporate assets? It's probably better than a VAT, I guess (which is why USA corporate taxes are relatively high, it makes up for lack of Value Added Tax).
Gently reply
... and he has zero pull there... so... he can write executive orders and talk to foreign leaders and engage in 'police action' wars... but... he cannot pass tax policy.
If he ACTUALLY... seriously... wants to pas a tax bill... then he has to talk to congress first. And... he hasn't done that in awhile.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
I thought it was the corporations stealing by leeching off society and then not paying the membership fees. If they don't want to pay any tax they are free to leave society and stop stealing our free education and training, healthcare, roads, police and judicial services etc.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
It's well understood what they are doing, because the companies are quite open about it. Back in the 90s Apple invented something called the Double Irish, which is where they register is shell company with no employees or other interesting in Ireland and have all the other Apple corporations around the world pay their profits to it in exchange for using the Apple name. Starbucks, Google, Amazon and others all do the same. Since the local corporations don't make any profit (due to the "crippling" fees they pay to Apple Ireland) they pay next to no tax.
Except that's not what Apple is doing. See the fact that Apple US paid 6 billion dollars in US taxes on 18 billion profit.
What Apple Europe (which is in Ireland) does is holds all the profits that Apple makes in countries other than the US, because they can't bring that money back into the US. The US wants to charge a second round of taxes, even though European taxes have already applied.
This is the same thing that the US does to dual nationals - a US/UK dual citizen working in the UK will pay income tax both to the UK and to the US, because the US thinks they're entitled to taxes on money made abroad.
The reality here is that what should change is the US's policy of taxing all money everywhere, whether or not it ever had anything to do with the US.
"to avoid paying their fair share"
That phrase "fair share" is dishonest. It is vague and subjective, while pretending to be objectively normative.
That is exactly right.
Social Security and Medicare costs are only going to get worse as our population ages. And those costs are what is really tanking the federal budget. Not welfare queens or other conservative mythical leaches on society.
And over the past 20 years, our wages have declined and our standard of living has declined also - but worker productivity has gone through the roof.
Big business and the billionaire class has taken the difference and none of that has ended up in the workers hands. We are working longer and harder and our lives are getting worse.
That $2 trillion represents part of that difference.
Well, foreign earnings will not come back to USA at all ever of-course and all the companies have to do now is start moving their headquarters from the USA.
Yes, that's exactly what will happen.
"First they came for the slanderers and i said nothing."
Yes, but one of the examples there is Burger King and most people don't understand something about that company, it was not American even before it moved the headquarters to Canada, it was mostly Brazilian. That company has a complicated history but Americans think for some reason that the company, whose majority owner is a Brazilian conglomerate is an American business... they are uninformed.
You can't handle the truth.
Nobody's talking about "taxing other countries".
US law says that, if you're a US citizen, you're liable for US taxes. Doesn't matter where you live or where your money comes from. However, it also recognises that it's not nice to subject citizens residing overseas to double taxation--so if you live in $country and pay $country's taxes on your income there, the US will often accept this as having fulfilled your obligation. But if you've income that you're not paying taxes on, anywhere, and the IRS finds out, they will come calling.
What Obama is apparently intending is to extend this philosophy to US corporations, which currently enjoy a much better deal than you or I. They pay US taxes on profits reported in the US. They don't pay US taxes on profits reported in other countries--and here comes the important part--even if they report those profits in $nation, which happens to have negligible or even zero corporate taxes. Whereas, if I move to $nation and they don't make me pay income tax there, then I get to pay it to the US.
So corporations currently get a huge overseas tax dodge that you and I don't. Quoth TFS,
In the future, the budget proposes that U.S. companies pay a 19 percent tax on all of their foreign earnings as they are earned, while a tax credit would be issued for foreign taxes paid, the official said.
So in other words, US corporations making money overseas would be subject to taxes on it in a manner very much like how US citizens are already subject to their overseas earnings, and with same proviso that they won't be doubly taxed.
Okay, go ahead and explain how this is "retarded" or unfair. Seems pretty smart and fair to me.
Il n'y a pas de Planet B.
Aw, crap, that should have been "very much like how US citizens are already subject to US taxes on their overseas earnings".
(And I even used Preview, dammit.)
Il n'y a pas de Planet B.
Except that's not what Apple is doing. See the fact that Apple US paid 6 billion dollars in US taxes on 18 billion profit.
That is what they told you. The US Senate grabbed Apple's IRS paperwork and found a check for $2.5 billion.
What Apple Europe (which is in Ireland) does is holds all the profits that Apple makes in countries other than the US, because they can't bring that money back into the US. The US wants to charge a second round of taxes, even though European taxes have already applied.
European taxes have not been collected because of the tricks Apple uses. The EU is pursing Apple for dodged taxes as well. One of Apple's subsidiaries paid absolutely no taxes at all for 5 years despite $30 billion in profits. $0 taxes, $30 billion profit.
This is the same thing that the US does to dual nationals - a US/UK dual citizen working in the UK will pay income tax both to the UK and to the US, because the US thinks they're entitled to taxes on money made abroad.
Does said US citizen get to hold his US passport? Does he get to use US Embassies? Will he be rescued by the US military if kidnapped in Iraq? All that costs money. And the guy gets to deduct from his US tax bill anything paid in the UK anyways.
The reality here is that what should change is the US's policy of taxing all money everywhere, whether or not it ever had anything to do with the US.
As long as it has nothing to do with the US.. I agree the US shouldn't tax it. Last time I drove through Cupertino though, I'm pretty sure I saw a giant Apple logo behind a bunch of people carrying Apple Ids. At least one of Apple's Irish subsidiaries has zero employees though.
Of course not. Obama has no expectation that this will ever pass. It's a rhetorical club to beat the Republicans with.
Because hiding your profits overseas is some sort of essential liberty, right?
The profits were earned overseas, mostly from products and services created by non-Americans and sold to non-Americans. There is no rationale reason for America to be taxing these profits. No other country has this kind of extraterritorial tax. Most economists agree that it is counter-productive, and just encourages companies to base their headquarters somewhere other than America. Business taxes should be based on where the economic activity occurs, not where the business is registered.
Anyway, this proposal has ZERO chance of passing a Republican Congress. This is about electoral politics, not tax policy. The loser here is Hillary Clinton. To win in the general election, she has to position herself as a moderate centrist, that can win in the Midwest, and maybe even pick off a Southern state. But by steering the Democratic party into hare-brained anti-business claptrap, Obama is diminishing her ability to do that.
Mark my words, as we get closer to the election, he'll start breaking out the big guns. I'm sure he's already planning to talk about reproductive rights and race relations at some point along the way. I'm surprised he played immigration as early as he did but I'm sure it's going to come up again. I have to admit he surprised me on Cuba. Definitely didn't see THAT one coming.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Government 'education' is about as useful as government 'phone'. The next bubble to burst will be the government bubble, the bonds, the fiat currency and the entire idea of centralised governments that will be proven to be outdated and bad for society as a concept altogether. Hell, it is already proven to be a horrid, inhumane, oppressive, economically destructive, cancerous hazard to the individual well being around the world, it's just the masses haven't really understood this yet, so they will have to accept it on an instinctual level rather than on an intellectual one (they are incapable of understanding it intellectually, after all 'government provided education' oxymoron hits hard there).
You can't handle the truth.
If they don't want to pay any tax they are free to leave society
Wrong. They are not free to leave. The Obama administration prevented AbbVie from leaving, and is fighting efforts by other companies to leave.
stop stealing our free education and training
So if an Italian buys a car from a factory in Britain, he is "stealing education" if he doesn't pay tax to America?
Because the tax on citizens is already retarded and no other country is that retarded. The fix is to get rid of that retardation, not spread it to corporations.
*That* is an argument that is very possibly worth making.
Il n'y a pas de Planet B.
Stolen, huh? So I assume you would rather the government dissolve, leaving no infrastructure, no property rights, and no justice system? You'll have to staff your own protection, since you don't want police or military defense. I guess the biggest guy wins... hope you like that new dictator.
But then I suppose you wouldn't care for that so much. You might at least want to form an alliance with your family and neighbors. Perhaps you'll agree not to steal from each other, and have the toughest men keep watch over the town and keep the dictator's army out. But they need to eat and can't keep watch all day while also worrying about growing their own crop, so the town decides that everyone should give part of their goods in exchange for the protection.
Then your town and others nearby might decide, we are reasonable folk and aren't each other's enemies. So you form an alliance and pool your resources to focus protection on the outer borders. Oh and since one town has a great market for clothing, and another has a nice oil well, and yet another has fertile land, now you need roads to travel between the towns. You pool your resources to help built those roads.
This is a system of government, funded by taxes. It is the inevitable outcome of humanity, and will continue to grow bigger so long as the people are mostly satisfied with that government.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Yes, what about the rest of the federal government's spending, of which military spending is not even a third. Social entitlement spending is what the vast bulk of your federal taxes and borrowing go towards, not aircraft carriers.
1.The Republican Congress will never approve this idea. Never. 2. Europe closing tax havens? Africa is ripe to be next with new tax havens and super cheap manufacturing centers.
Does it really matter if the Republicans will approve of this? Perhaps Obama knows that every single Republican congressman is now getting frantic phone calls from every rich Ayn Rand reading jerk that ever contributed to his campaign. Obama also knows that taxing the rich is probably not going to bother the electorate that much. The common working American like any other working class person derives a certain amount of 'schadenfreude' from watching rich people squirm. The is especially the case if those rich people are tax cheats who, unlike the ordinary working American, can hide their earnings in foreign tax shelters. When the Republican party rises up on it's collective hind legs and fight this tooth and claw they will once again be perceived as the party that exists mainly to defend the rich at the expense of the American people since this money would be used to improve America's decaying infrastructure which ultimately would benefit everybody including the rich (even if they are to short sighted and greedy to see it). If I was Obama I would spend the rest of my presidency luring the Republicans into fights that they are dumb enough fight but that also make them look like they only care abut the rich, thus preparing the ground for the 2016 elections.
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Inventors, both native and foreign born, live in the U.S., after being educated in U.S. universities, using U.S. infrastructure and support networks. They land jobs with U.S. companies to invent, develop and sell products to U.S. citizens. The U.S. patent rights on those products are sold to a foreign company which then charges the U.S. corporation a high royalty. The patents are only valuable because of the extensive U.S. patent system which protects the intellectual property of inventors and their corporate assignees, foreign or domestic. The foreign shell company makes all of the profits in a small country with tiny or non-existent taxes. The U.S. company claims all the royalty payments as expenses, wiping out U.S. profits. Here is one example of many. http://www.usatoday.com/story/... Then, tax attorneys educated by U.S. law schools prepare U.S. corporate tax returns that legalize all of this under laws written by corporate lobbyists for the benefit of U.S. corporations. Then the U.S. corporations control their media subsidiaries (ABC, NBC, FOX, CBS), to try to justify all of this. It isn't a perfect plutocracy, so they must pay P.R. firms, pundits, and think tanks to convince people like you that Barack Obama is a socialist trying to steal their money, and that his 14% tax proposal to pay for U.S. highways is wildly unfair double taxation.
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But by all means. Go ahead and keep watching Fox "News". It is your right. Rupert Murdock's interests are undoubtedly aligned with the long term interests of U.S. citizens. I'm sure the republic will limp along just fine if all its citizenry are too busy to discover anything resembling the truth. And don't worry your little head. Obama's proposal has zero chance of being passed by either the corporate-controlled House or Senate. Even if I changed your mind (which I am certain I have not), there are millions upon millions out there who will listen to corporate sponsored political commercials and vote to keep either the corporate-backed republicans or corporate-backed democrats in power. I can't convince them all. They won't see this post, or visit my website. It is simply TLDR. You have won the argument. Congratulations.
Join the IParty!
That phrase "fair share" is dishonest. It is vague and subjective,
A tax code which permits corporations to hide profits while taxing citizens normally is dishonest.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Thank God for #1. This is a bad idea--giving a Liberal more money for whatever "reason".
As opposed to what? Giving a conservative a pile of money which he uses to start a totally unnecessary war in Iraq that cost 4488 soldiers their lives? Look at what a success that turned out to be!!
Liberty means no ex post facto laws. Earnings made before passage of any such law (which, let's face it, will NEVER pass with the current Congress - whether you agree with them or not) should be excluded from this. If the Government can retroactively tax your profits, then why can't they retroactively tax the earnings in your 401K? Change your Roth IRA to be taxed when you pull out funds when you retire? Decide to take any money you've saved in the past and tax it at a high rate in the future? Is that liberty?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Yes, the BEST way to get things is to have someone else pay for them. Force companies to pay additional taxes to give people free stuff - that's a great solution, and will really increase the perceived value of that free stuff!
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I can understand trying to get companies to stop gaming the system by shuffling their US profits to overseas holding companies to avoid taxes, but is this what this proposal is actually doing? If it is I'm all for it, but somehow I wonder if this is trying to tax overseas profits from overseas sales simply because the company is US owned. There was a raft of articles a few years back about US citizens having to renounce their citizenship because they were being taxed at obscene rates despite the fact that they didn't live, work, vote or even visit the US. Maybe its my latent paranoia but I wonder if this is the corporate version of this.
"In 2014, job growth averaged 246,000 per month, compared with an average monthly gain of 194,000 in 2013."
http://www.bls.gov/news.release/empsit.nr0.htm
This is somewhat more than the ~150,000/mo which is needed to account for the increase in the number of employable Americans.
http://www.investopedia.com/terms/j/jobsgrowth.asp
In other words, there is definitely job growth. As for wage growth, there isn't any. but this appears to be a long-term trend:
http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/
Embassies? Military protection? Original education, roads, and infrastructure that got you overseas, rather than keeping you in a hovel in a ghetto? If you don't want to support the country, give up your citizenship. Then you don't need to worry about the US or its taxes or laws unless you come back.
Give up your citizenship, and you get to pay a tax on all assets immediately payable at that time. Even if those assets were 100% earned AND held overseas. Even if they were "received" via marriage. Marry a wealthy foreign citizen and decide to change citizenship? You get to pay an expatriation tax on their holdings they had before your marriage when you give up your citizenship...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Infrastructure is not a government concern
Infrastructure is a property rights concern. Property rights is a government concern.
Justice system and property rights do not require centralised governments, each locality can deal with it however it wants
So property rights is a government concern, just not a centralized government concern? I can see that logic. But then how do we deal with a citizen of town A owning land and things in town B? And how does the justice system handle the case of someone in town C coming to town B to steal things from the citizen from town A?
We could set up treaties between the towns, and have a documentation system to provide proof of citizenship and other details that matter. As for me, I like being able to drive to the next town to shop or eat or whatever I do, without needing to go through border checks.
thus if you want to use a road or have protection against attacks by bandits, that's your responsibility to hire your protection and to pay your road tolls
Golly, that's just what I want! To pay a body guard to ride with me in my Hummer with machine guns. And to have to stop to pay at every - single - entrance into every road, and from every road.
Actually no, that's not at all what I want. I want my 10-mile commute to take 15 or 20 minutes, not 3 hours waiting in lines at toll booths. I want to pay a reasonable amount of money for my drive, without having to pay by-the-hour for some guy to protect me as I drive down the road.
I don't like everything about our society. I don't care for many things our government does. I would change a lot of things if I had my way. But at the end of the day, I feel that all of that is relatively minor compared to truly horrible dictatorships where the people have no rights, no freedoms, poor health and are daily in fear for their lives and for the lives of those they care about. We should fight to make sure our society doesn't degenerate in that direction, but its useless to throw it all away just because it's not perfect.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
You haven't thought things through well enough. You imagine that you can pay for "protection from highway bandits" and that this is somehow different from government. Wake up. That is what government is. Protection from highway bandits. If you somehow managed to convince everyone to eliminate the U.S. government, then the question of roads would immediately pop up. Without roads you can't get to work or deliver products to markets. You can't have markets, because thieves and bandits would raid them. So, you would pay for your own private guards. Pretty soon, you would find that there are businesses providing protection. You would hire them, and so would other companies. But they would fight each other. Somehow, the fighting would ultimately get resolved. Either some warlord would emerge from the fighting as victorious leader who would impose order, or people would get together and vote on rules so that private protection companies would not fight. Rules, and a rulemaking process would evolve from your garden of eden of liberty. You can't avoid it. There are other people living on the planet. You have to get along with them. It isn't easy. You can't just say, "hey, this is my stuff, everyone keep their hands off of it" and expect everything to be fine. Again, wake up. Where did you get the stuff? Were you born with it? Did God pre-ordain that you own it? You don't think far enough ahead, and think about what will happen if you get rid of government. It will evolve again. And again. Everywhere. You can either react to it like it is some alien creature, or you can plan ahead, and try to optimize the rules that eventually evolve. Because rules will evolve, by force. It can either be a democratic force, or a dictatorial force. Or some mixture. But try not to be so simplistic in your thinking. It is frustrating to read.
Join the IParty!
Roman, go spend some quality time in the library (at taxpayer's expense, mind you) and read up on some history. Look at how well neo-anarchists have provided for the 'general good'. Look up some actual, functioning examples of libertarian philosophy.
And if you find any, come back here and tell us about it.
Yes, capitalism is pretty screwy. Doesn't work well. Not a stable system, needs lots of inputs to keep from feeding back on itself and destroying everything in sight. No, this 'civilization' will not last forever and has a number of major issues with it at the moment.
But your goofy system won't work beyond a 12 pack of brownies.
Faster! Faster! Faster would be better!
Possibly.
Ditto
BLOCKQUOTE>Will he be rescued by the US military if kidnapped in Iraq?
Extremely unlikely.
"I do not agree with what you say, but I will defend to the death your right to say it"
Paying for a service, choosing to pay for a service and choosing what service to pay for is entirely different from being coerced and oppressed by the mob to pay for nonsense that I have 0 interest in, actually less than 0 interest. It's even much much much worse than that, every dollar and cent that is stolen by government from the productive society and diverted to various government initiatives destroys the economy, the market, the society, every dollar that government gets has an untold multiplier attached to it. That's the dollar that goes towards increasing government power, that's the dollar that is taken out of the productive economy, out of savings, out of investments and is worse than wasted: it's wasted and it is used to create more government oppressive structures that end up stealing more from the individuals in the productive economy.
No, paying for a service of your choice and being forced to give up your own life and fruits of your labour to the thugs with guns with the authority provided to them by the mob cannot be compared even slightly to voluntary market exchange.
You can't handle the truth.
Why do we have to give corporations anything? The US is the one with a friggin army. Go in an sieze the friggin funds and tell them tough fuckin cookies. And at the same time cut back their HB-1 visas and start negotiations. They can either start moving jobs back and hiring LOCAL developers and LOWER C-level wages, or we are going to continue to play hard ball.
This is my sig. There are many like it but this one is mine.
It is unfair because the profits of a corporation get taxed anyway during outflow, through the taxes on dividends and capital gains. Corporate income tax thus brings double taxation on that money. Those countries which have little or no corporate income tax are taking this into consideration and are being fair, unlike this money grab by Obama.
"Politicians and diapers must be changed often, and for the same reason."
Anarchists are mostly irrational leftists, who want to destroy what they don't understand (property rights for example).
Clearly I am not with any socialist ideas, not on any level, not even slightly. Free market capitalism is not anarchism and anarcho-capitalism is not anarchism either. Maybe you want to read some of those books, I have had my share by now.
Capitalism is only private ownership and operation of property, there is nothing that makes it 'not work well', what screws things up is government oppression, be it dictatorial oppression or mobocracy. Free market capitalism has provided the biggest economic success in the history of the humanity in the 19th century USA and in the late 20th, early 21st century China, in Singapore, in Switzerland, in Hong Kong. It's ironic to see former communist dictatorship in China embrace so many capitalist ideas and reduce government power to provide a much freer market system, but it is working as it is supposed to, increasing the wealth within the society by removing so many government imposed constraints that the society used to face.
Growing government power is what is destroying USA and European economies, not abundance of individual freedom.
You can't handle the truth.
wrong, this is a tax against U.S. companies based on juristiction within the USA alone. It is the same as requiring U.S. citizen to pay U.S. income tax rate on any income from foreign company. It is of no concern to foreign companies and foreign governments, no treaties needed. These companies are already under the thumb of U.S. governement and must abide by U.S. law
Because hiding your profits overseas is some sort of essential liberty, right?
The profits were earned overseas, mostly from products and services created by non-Americans and sold to non-Americans. There is no rationale reason for America to be taxing these profits. No other country has this kind of extraterritorial tax. Most economists agree that it is counter-productive, and just encourages companies to base their headquarters somewhere other than America. Business taxes should be based on where the economic activity occurs, not where the business is registered.
First of all, the profits were NOT made overseas as you claim. They were BOOKED overseas by "Me" billing "I" millions/billions in "licensing fees" to use "My" name. Essentially, they pay accountants (and Ireland) 2% to avoid paying actual taxes. Second, yes other countries do have these kinds of taxes, Australia on their citizens for one. Three, most economists don't agree on anything, just like "most" of any other non-hard science group. Physicists mostly agree on G and climatologists agree on AGW, but there's a pretty steep drop off beyond that stuff.
Finally, I think we can agree on the last point, but differ on interpretation. You appear to be saying that whatever third world hell hole (Sorry Ireland) their accountants claim is there "home" is what matters. I disagree. Where does Apple, Microsoft, etc sell the majority of its consumer products? Is it Ireland? Nevada? I don't think so. What is the citizenship of its majority stockholders? What country spends the most on military power, which is used to enforce and defend their intellectual "property"? I think those are the most salient points.
If Somalian based black flag maker "Ukata Dung Flags" makes his flags and sells them to local pirates, I don't the US should be taxing him. No one here who isn't trolling would suggest that. But if Bill Gates, Warren Buffet and the Koch Bros were to suddenly claim they were based out of a dock in Somalia, I don't think we should say "Oh, cool! Yeah that $40Billion dollar licensing fee to "Legitimate Licensing Company" in Somalia is a legit business expense, no profit or tax for your American business necessary. Roads, Courts, Police and Fire all free on US! Plus warships to protect your IP, for free, of course."
A common thread I see in these anti-tax schemes is complaints about the current status, but I never a better solution being offered by the "Boo Government!" aka "Boo Taxes!" crowd. Plenty of wishful thinking along the lines of "Me and the boys have rifles and don't need cops!" crowd, all of whom would die to toxic inhalation from arson from more depraved versions of myself in a crisis, providing me with a ready stash of guns and beans. That or they reveal themselves to be cowardly murderers who kill anyone within sniping distance.
Well then you're fucked, because no society like that has ever existed, or ever will exist.
The world's burning. Moped Jesus spotted on I50. Details at 11.
You are getting services and you pay for it through taxes. This does not fit any sensible definition of stealing. I can see that you are one of those libertarians that operate under the pretense that we would be better off with highways built by private parties for which you would have to pay a fee just like a tax to the government but with the difference that you have no say where it is built.
Fine, you are welcome to believe that. It still does not make takes theft or slavery. They are democratically agreed to and you get something in return for them. Let me know when a robber gives you back something in return for the stolen goods. That is how false your analogy is.
The difference is that corporations (US C Corporations) are the imaginary invention of people, and this is also why they should not be taxed.
I imagine that all my corporations are in tax-friendly, business-friendly domicile. And if such a domicile does not exist, then imagine harder! This is the present state of corporate earnings management.
People, on the other hand, receive all the benefits of corporations. These benefits accrue as transactions, wages, dividends. Transactions and, to a degree, wages and dividends, are real, tangible things.
This is why taxing transactions (i.e. sales tax) can strive to meet standards of fairness and smartness, but taxing corporate profits will always lead to ridiculous outcomes.
-- I was raised on the command line, bitch
Almost all of the design and administration of Apple is done in California. But surprisingly the "Company" is a foreign company where they have no factories, no designers, no corporate officers and just a bank account.
So yes, by using the talent and ingenuity of US workers and then claiming that they're an Irish Company they are stealing the value that US Society has invested into its workforce (and supplied the infrastructure for that workforce to get to the job site etc).
Personally I believe that we should tax not based on where they are located but where most of the value is created. If you are Microsoft and 90% of your workforce is in Washington State but you are incorporate in "Nevada" because you have a PO Box there then you should be taxed at 90% Washington 8% California and 2% Nevada tax rates. Similarly if 80% of your operations are in the US then you are 80% a US company and 80% of your revenue is taxable under US tax law.
Everybody knows that Apple is a California company. To say otherwise is dishonesty. It might legally be correct that Apple is a subsidiary of an Irish shell corporation but they're cheating the system and doing something that doesn't pass any sort of sniff test of truthfulness.
In the very long term, the burden is likely to be shifted in part to labor, if the corporate tax dampens capital accumulation.
Labor doesn't pay taxes either. Take more out of my paycheck and I'll buy less of your (corporate) junk.
It's silly to think of someone or something paying taxes. Its all a cycle and taxes represent a drag or inefficiency in the transfer of funds no matter where they are applied. Common sense (and equity) demands that we spread the tax burden across as many transfer events as possible. That means personal as well as corporate income taxes.
The point that many people are missing about this 'Obama Tax' is that it appears to be a federal tax on wealth, not transfers. And that is problematic. State and local governments have various forms of wealth taxes (property), but the feds do not. Even inheritance and capital gains taxes are triggered by transfer events. This makes the proposed tax a disturbing precedent.
Have gnu, will travel.
You're completely off-base on the Hillary thing. To help Hillary, Obama need to take the party further left. It relates to the concept of the Overton window , the range of ideas that the public sees as palatable "centrist" positions. If you drag the dialog of the extreme edge further, then it makes less extreme ideas seem more reasonable. The Democrats need to get on this, as the right has been doing this for some time. People like Limbaugh and Hannity push the edges out so their candidates don't have to.
By pushing "anti-business claptrap" Obama gives her room to distance herself from him, room she can use in the election as she sees fit.
Personally, I don't feel that closing tax loopholes exploited by multinationals is "anti-business", more like "pro-fairness", if you allow one business to cheat, you force all to cheat to stay competitive.
It’s part of the budget, which the President submits to Congress. I’m pretty sure that counts as talking to them.
Congress can always strip it out, but there’s nothing requiring the President to sign that modified budget, and then we’re right back to CRs to pay for everything, like we’ve been doing for the past several years.
Ah, Atlas Shrugged. Written by a sociopath, rule book for the selfish, prized tome to Libertarian wackos everywhere.
Go ahead, you John Galts! Take your ball and leave, like a four year-old throwing a tantrum.
You THINK that you’re special, but the truth is you’re completely disposable. There are a hundred Americans just waiting to take your place with great ideas and hard work. Perhaps they’ll even do your work better than you could.
As an entrepreneur, I relish this mindset, as I don’t have to compete against pouting quitters.
You won’t be missed.
Liberty means no ex post facto laws. Earnings made before passage of any such law (which, let's face it, will NEVER pass with the current Congress - whether you agree with them or not) should be excluded from this. If the Government can retroactively tax your profits,
This isn't a retroactive tax.
There's no ex post facto involved.
You see, the trick is that technically, all the money held overseas is deferred income.
The IRS said "you don't have to pay your taxes until you bring the money back to US shores."
The corporations said "Cool, we'll bring it back. No really, we will. But how about we pay you less when we bring it back?"
As a result, the incentives for repatriating foreign profits are completely upside down and backwards.
It makes far more sense to dodge US corporate taxes and invest the money overseas.
[Fuck Beta]
o0t!
This 14% to 19% is closer to the USA's 'real' tax rate, which has so many loopholes that it's actually lower than most of the developed world.
People love to harp on the fact that the USA's corporate tax rate is so high, but it truth with all the political rewriting of the corporate tax rate its fairly low.
And then you have companies like Apple doing their all out best to not pay taxes at all.
The last is what Obama is trying to remove. And Republicans/Fox News and it's handlers are going to try their level best to sell the American People that this is a bad thing to fairly tax the poor super-corporations that get away with bloody murder.
No! It's a *SIG*. Keep the Special Interest Groups away! (Con joke!)
How exactly is risking capital to produce products people willfully buy "leaching off society"? Which government service exactly are they skipping out on paying for? Why not send them a bill for that instead of stabbing in the dark at arbitrary sums? When did it become "greedy" to keep your own money, and "justice" to take someone else's?
So now you have no benefits that aren't costing you tax from your salary too. So the value of the benefits plummets and thus people just demand a higher salary instead. Which, believe it or not, costs you more - the point of the incentives is that the person couldn't just earn that amount of money extra and get that incentive themselves anyway, it works by having expensive one-offs that mortals couldn't afford, and them remaining company property, etc.
You can't make outsourcing illegal. It's just a legal minefield and there's always a way around it. It would also cripple any modern economy overnight. This is truly a stupid suggestion in its own right.
End visas? No problem. But there aren't many countries in the world that have put a block on visas because they already have enough in-house talent. Believe it or not, this will make immigration drop which, again, will cost you all money.
The numbers may look bigger on the balance sheet, but the costs go up as well and may not be immediately noticeable.
The stock/futures things? Too complicated for me to tell what would happen, to be honest. Chances are there's a way to scam it to make enormous profit and not pay tax on it.
However, if you just tax the companies properly - a fixed portion of their income earned or brought into the country, and a definition of income that excludes any kind of "pay your own subsidiary" shenanigans - the prices for the consumer may well go up. But equally consumers will go elsewhere.
And maybe, just maybe, like Starbucks UK, you'll find that the prices have gone up because NOW they have to pay the right amount of tax. And if that means they can't be profitable, then their competitors who HAVE been paying the right amount of tax all along will win (e.g. Costa Coffee in the UK), because they can compete on a level playing field finally.
Tax isn't complicated. A fixed portion of what you earn. It's that simple. The problem is that to get their own 10% the lawmakers and accountants make things incredibly complicated to define exactly what you've earned. And they wrap it up in a thousand tiny taxes rather than one big tax.
Can someone explain why it wouldn't be better to have a "personal income tax" and a "corporate income tax" and scrap everything else? It's used for disincentives (e.g. tax on smoking in the UK) but, honestly, is that really worth it compared to just banning it or letting the markets speak?
It took 40 years to get to the point where smoking costs us more as a country than it makes in tax, and now we have a huge legacy of health problems ahead of us and STILL we haven't properly banned it but pissed away money on disincentives like plain packaging, hiding them away in the store, stopping their advertising, removing their capability to sponsor, etc.
I can't help but think that just the simplicity of "half what you earned" (which is about right for most first-world countries) would cut out so much red tape, confusion, administration and difficult enforcement that it would actually get you back MORE than all this complicated mess of exclusions and kickbacks that are in place now.
I pay road tax (road fund licence, technically, but it's a tax on road use the proceeds of which go to road maintenance - no different to taxing road use and the government having to maintain the roads generally), income tax, national insurance (healthcare tax), VAT (sales tax), a specific tax on petrol, a tax on pensions, a tax on insurances, a tax on bank interest and god-knows what else.
"How much money did you make from all sources last year? Give me half" seems to be pretty much the same as we have now, but without all this mess of shit to fall foul of and allow companies to scam.
Possibly.
Ditto
BLOCKQUOTE>Will he be rescued by the US military if kidnapped in Iraq?
Extremely unlikely.
I lived in Venezuela during the military coup of 2002. The US embassy actually did make arrangements to potentially helicopter out US citizens if the situation got bad enough. So they do look out for US citizens abroad, when possible. I would call in twice a day to determine whether or not I was supposed to try and escape the country. And no, I was not a US Government employee there at the time.
Free market is exactly absence of government...
Sorry but that's the Fox news definition.
"Free" - as in anyone is free to participate in the market.
"Market" - A set of rules governing trade, normally created and enforced by governments, eg: property law.
In other words the all too common Fox definition of "free market" is actually an oxymoron.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
And in what sense are they "conceived and developed here in the US"? A large part of US R&D staff is immigrants to begin with.
Furthermore, if you think that this entitled the US to grab large amounts of taxes on foreign income, companies will do the economically rational thing and make sure that those inventions are "conceived and developed" elsewhere. Is that what you want? Discourage companies from doing R&D in the US?
The real issue is that everyone wants services but no one wants to pay taxes for those services. Not the corporations. Not the rich. Not the middle class. The poor will always get screwed no matter what. We borrow and spend, hoping that the check never arrives.
When clever accountants figured out that they can just make up inter-company fees in order to make it look like the company is making money in Ireland when all their actual customers live in the US. Seriously, the title of this thread is "Double Irish" - look it up.
Never mind that taxes at an 80 year low. When taxes were 90% after WW2, many corporations plowed that money back into the business to avoid giving it to Uncle Sam. With low inflation and low interest rates, many corporations are content to hoard cash and let it sit idle.