Suck it up, boys. Pay your taxes like the rest of us. You're sitting on huge war chests of cash. You can afford to contribute a little bit of that to the common good.
US companies in general are sitting on $2Trillion in cash. Productivity is sky high, because of all the lay offs across the economy, and profits are generally up across the board in most sectors of the economy.
US companies aren't spending because they don't want to spend. They aren't hiring because they are productive enough and are profitable enough without hiring. They are also scared because of all the uncertainty in the financial sector, not necessarily because of the high taxes.
The few people that are actually putting money to work in this economy are angel investors and VC's by giving small engineering teams small amounts of cash as well as leeway to experiment at building interesting products.
> US companies aren't spending because they don't want to spend. They aren't hiring because they are productive enough and are profitable enough without hiring.
Companies spend more and hire more when it's necessary to meet additional demand. If there is no additional demand, then they don't. It's not because they don't want to spend or are content with existing profits, it's because consumer demand is currently very weak. With 40% of US mortgages underwater, it's going to take a while before consumer demand strengthens again.
They have little reason to suck it up and pay these taxes. It's easy to book of shore 'profits' and with an occational tax holiday there is huge incentive to do so. Just create a a 'paperclip' in an offshore company and bill the US company 1billion for it and you get to avoid paying taxes what joy. Then wait a few years and bring that money home on a semi regular holiday.
PS: Or we could say on Dec 31 there will be a one time 50% tax on any money in offshore accounts and you can clean up this mess real quick with them quickly moving all that money back home.
They don't owe any taxes if they keep the money outside the country.
People tend to think of taxes like "skimming" off the top, and like some kind of inevitable thing that doesn't affect your decisions. But that is the wrong way to think about it: when taxes are high enough to have a significant impact, they do affect taxpayer decisions.
You seem to be saying that they should keep making decisions as if there were no taxes, and then pay high taxes because of those decisions. But that's completely unrealistic.
When taxes are higher than a trivial amount, the correct way to think about them is as policy that will have lots of effects; some obvious and some not obvious.
Google and many other companies route their overseas earnings to Bermuda through Ireland and Holland, and effectively pay 2.4% tax on that money since Bermuda doesn't have any corporate taxes: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
Given the past experience with the 2004 tax holiday (little economic investment effect), the current proposal should be rejected. And to allow another tax holiday only sets the expectations that additional ones can be lobbyed for in the future, meaning these companies will again hoard foreign profits offshore in hopes of repeating this request again and again and thereby depriving the government of timely tax revenue.
This is a quite blatant attempt by these companies to game the tax system for their own (not public) benefit. As others have stated, these companies obviously held the foreign profits abroad hoping to have/create this type of lower tax opportunity to bring back those profits.
However, I don't blame these corporations for trying this - corporations' jobs are to make and keep as much money as possible, mostly in response to shareholders' desires for greatest economic returns. Anyone who owns stock in Apple and Google is a part of the reason for this attempt. If this tactic works, the market value of Apple and Google will increase and isn't that what essentially all shareholders want? Frankly, if these companies voluntarily paid all taxes without trying to find ways to minimize them, most shareholders will be furious at management.
Government, through its various corporate/tax laws, sets the limitations on what is permissible and not for corporations, and it hopefully tries to do it in the way that maximizes overall public benefit (balance regulation against enough corporate freedom to incentivize economic growth). The problem I see is that special interest groups have disproportionate power through buying influence. In order to prevent recurring instances of this same situations, the government should firmly show that it will not grant tax holidays now or in the future (then maybe companies will bring foreign profits back right away to the US, thereby paying taxes on time and maybe hopefully spurring economic investment).
My Conclusion: Companies (at least public companies) aren't wrong to try to maximize their value in every way within the controlled environment created by governments. The government should act in the way to incentive corporate actions in the best interests of the public (whether it be more tax dollars or economic growth or another objective). Just say no to the tax holiday.
The corporations' managers cross the line from self-interested to sociopatgic when they pass from enjoying current laws to lobbying (bribing) for new laws to suit heir interests.
I don't know enough about this particular tax rule to say something useful but on the general idea of a 'tax holiday' I do have some thoughts.
Ad-hoc government policies are wrong. Tax holidays, cash for clunkers, amnesty for illegal immigrants, tax credits for favored businesses, loan-gurantees for that new stadium or 'preferred' manufacturers (e.g. Solyandra), health care 'waivers' for certain companies, are all examples of ad-hoc government.
These sorts of policies shred the idea of equality under the law, encourage rampant lobbying in order to gain 'legal' favors, enable politicians and bureaucrats to wield power preferentially, reduce the predictability of the legal and financial environment (taxes, fees, licenses, etc), and skew economic decisions to fit into legislative time windows.
Laws should be uniform and consistent rather than moving targets with varying applicability.
I totally agree. Not only does it make the tax code much more complicated than it needs to be, but it also discredits the "fairness" of taxes, damaging the very legitimacy of it.
anyway, this is absolutely unacceptable. those corporations knew what they were doing right from the beginning. they kept their profits overseas and were hoping government will decrease corporate tax at some point. it didn't happen, now they are applying political pressure so they don't have to pay the same tax rate as rest of America. THIS IS BULLSHIT and is not fair to rest of the society. damn you Google, Apple and Cisco
Here's a better idea. Google and Apple take their taxes back to the US AND they pay tax on those profits. That would definitely help the economy and the budget.
It's so sad that corporations can't seem to actually apply ethical judgements in situations like this. Apparently the shareholders are better served by overseas unrepatriated profits than by actually receiving dividends which have had tax paid on them. And having a national government that can fund the infrastructure for their US offices.
(Not a tax laywer so reality may differ from opinion)
I'm not a tax lawyer either, but I did stay at a holiday inn last night... Which sadly is my only qualification to comment on this topic. In any case here is how I see it, not that I'm right.
Shareholders of international companies are better off if the company doesn't pay the tax penalties from repatriation. Those shareholders will pay taxes on dividends and capital gains, if nothing else. But the question is why would a company bring money back from China (for example) only to pay taxes on it before sending it back to China to pay for the next round of manufacturing? Also, international companies almost always are required to pay taxes on the profits in the country it was earned. There are games you can play to show the profit in your home country, but those are unethical. To understand why think about it from the point of view of each country a company operates.
When accounting decisions do come down to questions that could go either way, profit is shown on the books in the country that would incur the least tax expense. Its exactly what most individuals do. For example I love the big city I live near. However, I chose to live outside of city because a don't want to pay for the city government services when the little town I chose live in has similar services and lower tax rates. I pay for the city services I use through the city sales tax, but they are crazy if they think I'll start paying city property taxes on a house that I already pay property taxes on to another town. If I did own both a city home and a home in the smaller town, there is no way I would be OK with the city bring to tax me on both. Similarly Apple pays taxes on its US operations to the US but why should it pay the US taxes on foreign earned profits that it already pays foreign taxes on?
I have a hard time faulting a company for not paying anymore than the rules require. Unless every company can agree on how much extra they should pay above the minimum, a company not minimizing their tax burden is at a financial disadvantage and will lose marketshare and eventually be marginalized. The only way I know that you can obtain an agreement to the amount of taxes that should be paid is by changing the tax law. Want more capital brought back into the US economy? Lower the taxes below those of the countries the US is competing with for that capital. Want US companies to pay more taxes? Raise the base tax rate, and close loop holes. While I'm thinking of it... Loop holes are almost never what we think they are. The vast majority are not some shady accounting trick dreamed up in a darkly lit room by a weaselly accountant or tax lawyer. They are discounts on the tax rate voted on by congress, usually intended to produce some good like creating jobs.
Really though, if you think about it... It only makes sense to make it easy on companies to move money into the US. If a company wants its cash back in the US, there are only three thing I can think of it would do with it. 1. Put it in the banking system, which grows the economy and increases taxes. 2. Spend it, which grows the economy and increases taxes 3. Give it back to investors, who pay taxes on it and then do one of the other two things.
> Though the studies found that money brought home in 2004 ended up benefiting a narrow set of shareholders, support is growing in Congress for the tax holiday as companies expand their roster of lobbyists.
It's really sad how U.S. government policy is now so openly for sale to the highest bidder.
If what was going on in the US took place in another country we'd call it corruption and bribery, yet we're supposed to accept the current rule by lobbyists and campaign donations as acceptable. It seem inevitable that the increasing economic inequality and lack of real democracy will lead to significant unrest.
The title of the article should be "Google, Apple now powerful enough to hold the entire world to ransom". Given the numbers in the article, that's ~$520 billion of tax revenues they're withholding from the state, and ~$1.5 trillion of liquidity they're withdrawing from Ireland or wherever (someone check the numbers?).
The thing going for the US is that it's still a good place to spend that money, otherwise they wouldn't be contemplating repatriation in the first place.
Arguably, if these companies steadfastly hold on and do not repatriate their funds without a tax holiday, their shareholders should punish them for only making imaginary money... not that it'll hurt them in a real way.
If the US were to grant this tax holiday, they should've set a 0% (or 5.25% or whatever) corporate tax rate to begin with. At least it'll be fair to everyone.
How is this idea even on the table considering current deficit budgets. Regular people don't have the luxury of pulling a fast one on the IRS and pay their dues.
Corporations do have to pay taxes on overseas earnings if they want to bring those earnings back to the US. As far as I'm aware, it's the same for US human citizens. (It's certainly the case for Australian citizens.)
I won't rule here on whether corporations are good/bad or if they deserve the profits. I'd just like to posit my analysis of the situation, which is that:
1) It's been well documented in the financial press now that banks and companies are holding more cash than ever. In fact, Apple is holding more on hand than the gov't.
2) This tax break would be a one time infusion. Corporations can't count on it recurring, if say, they wanted to plan on using it to fund operating expenses (e.g. salaries).
3) Historically, older corporations do not hire sizable numbers of workers. To what extent are these the companies with offshore profits?
Ignoring any ethical judgements, to say that it will help boost the economy seems dubious to me.
Again, ignoring ethical judgements, I think it is fun to consider other consequences, like what effect it may have on corporations' investments on foreign soil. We might not be able to make jobs here, but maybe we could nudge them away from making jobs there? It only works if you think the world economy is not interconnected though.
Anyway, my point is that, yes, there are good moral arguments why this push is reprehensible, and people are making interesting points as such here. Going the other way, I'd like to think about what the hardheaded economic realities are (and they certainly are not about direct job creation). What if it merely adds dollars that these corporations could use for other causes, like lobbying? To what extent do we consider these activities to be good or bad? Donations to charity and contributions to PACs are often one-off.
One thing that tickles me is that when donations are big, they go into endowments, which are managed by various financial companies. Good for the charities, but it's not that there are other vested interests. ;-)
I am very curious to see what would happen if, instead of a tax holiday, the US Government announces that it would permanently increase the tax from next year. Would that be an alternative way to encourage big corps to bring profit back now?
The sad part is: both Democrats and Republicans are beholden to the corporations, and not to the voters.
Every law that gets passed has these hidden loopholes and exemptions that benefit a select few corporations. Who puts these loopholes in? This is all done surreptitiously, and I've yet to see any accounting for these loopholes.
What we need is a Wiki-like system while drafting legislation, so that every edit can be tracked to the author(s).
This is the exact sort of "tax loophole" that should be put to an end. I almost wish someone pushed back by proposing a raise in taxes for such behavior, and maybe next time these big companies would think twice before they tried to avoid paying taxes that everyone else does.
So, if this is the "carrot" to get corporations to repatriate this wealth, (ignoring business as usual), what would the "stick" look like?
Maybe a small, token increase? Or some method of increasing the tax rate dependant upon the length of time between the date the money was earned versus payed out as dividends? Surely stockholders wouldn't let companies sit on cash (that would eventually come back here anyway) if that were the case.
You wouldn't even have to be successful, just make a boisterous push to ram THAT through Congress. See how quickly these same companies try to get their assets here under the current tax law.
our corporate tax rates as I understand it are second highest in the world. That is offset by the fact that they are riddled with loopholes and deductions.
We really need to eliminate special loopholes and deductions and then reduce corporate rates.
Having a large spread between US and offshore tax rates obviously gives an incentive for US corps to move factories and such overseas, rather than to export from the US. I don't see any reason to have incentives for that behavior.
Reduce all of the paid for deductions and bring rates down. Simplify.
Wouldn't this be a good thing? The money would come back into the US, and if the tax break isn't given then it won't be coming back.
I'm as cynical about corporations as anyone, but in this case.. they use 100% legal means to reduce their tax, behaving exactly how anyone would expect them.
Some argue that it is an ethical issue, but that neglects the fact that these companies make a large proportion of their profits offshore, and bringing that money gets taxed too. Ethics in this argument are much more subtle than some would have you believe.
They use 100% legal means to keep money off shore. True. But then they ask for a Tax Holiday when that arrangement no longer suits them.
One way or another, that money will return to the US, and the tax will be paid accordingly. This will happen over a long period of time. If the US allows this tax holiday to happen, it will be throwing away billions of dollars in the long term with no real short term advantage, whilst sending a very dangerous message to people who use tax avoidance as a long term fiscal strategy.
It's corporate Americas job to make try and make the system work for them. It's the governments job to try and make the system work for everyone.
It's a bad thing because it would create dangerous precedence for the future when every rich corporation would start blackmailing US government as to avoid to pay their fair share of tax. this would hurt US economy far more in long-term, you don't want to encourage this practice
Also, who cares about their trillion dollars... who gives guarantees this money will actually end up in national economy and not invested overseas with profits tied up in some off-shore country once again.
if America needs more liquidity in economy, ring FED. they will print just as much.
The idea does have a downside as well. These recurring tax holidays amount to a selective corporation tax cut for large international corporations. Smaller domestic companies do not benefit from it. Wouldn't it be simpler, fairer and more effective to cut the corporation tax rate?
Why do you think they put it overseas in the first place? They've planned to take it back under these terms all along. They're betting on a tax holiday at some point. Exactly what they did in 2004.
Give them this one, and rest assured, every company will take this bet and let the cash sit and rot until they can bring it back again.
Not really. They did the same thing in 2004, and it didn't do much of anything. And if we keep doing this every time big businesses push for it, they're only going to bring money back during predictable tax holidays.
There is going to be a rush to judgement, but I'm not convinced that the government is going to use the tax money wisely. There are too many people in the business of defrauding our government, trillions are wasted on wars, and millions on earmarks. The government knows how to bail out wall street, but they can't turn the economy around.
Out of all big international corporations in the US, I would argue that Google and Apple are the most socially responsible (apart from privacy concerns). It won't make sense to bring it back to USA so it can sit in bank accounts and accumulate interests, because those funds are currently accumulating interest as we speak.
The obvious uses would be for spending, perhaps for acquisition and growth. The money would eventually be taxed. Keeping the Government in the pinch has forced them to crack down on waste and fraud. It would be much harder for them to bail out wall street this time around.
I would argue that Google and Apple are the most socially responsible
Can you present that argument? I understand that Google does what it can design and build environmentally responsible data centers, but what else does it contribute to the public good?
> There is going to be a rush to judgement, but I'm not convinced that the government is going to use the tax money wisely.... Keeping the Government in the pinch has forced them to crack down on waste and fraud. It would be much harder for them to bail out wall street this time around.
Do you really mean to say that the solution to our budget problems is less revenue? The current deficits are the result of simultaneous decreases in revenues and increases in spending (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...). To get back to a balanced budget, we need more revenue and (eventually) less spending.
And I don't know to what extent the government has been forced to crack down on "waste and fraud." Certainly, that's not exclusively what's being cut.
The money wouldn't just be taxed eventually, it would also be taxed immediately, though at a reduced 5.25% rate instead of the usual corporate tax rate. And if a corporation repatriating income uses it to pay dividends, or for share buybacks (resulting in capital gains), this will result in taxable income for the shareholders.
[+] [-] iamelgringo|14 years ago|reply
US companies in general are sitting on $2Trillion in cash. Productivity is sky high, because of all the lay offs across the economy, and profits are generally up across the board in most sectors of the economy.
US companies aren't spending because they don't want to spend. They aren't hiring because they are productive enough and are profitable enough without hiring. They are also scared because of all the uncertainty in the financial sector, not necessarily because of the high taxes.
The few people that are actually putting money to work in this economy are angel investors and VC's by giving small engineering teams small amounts of cash as well as leeway to experiment at building interesting products.
[+] [-] nhebb|14 years ago|reply
Companies spend more and hire more when it's necessary to meet additional demand. If there is no additional demand, then they don't. It's not because they don't want to spend or are content with existing profits, it's because consumer demand is currently very weak. With 40% of US mortgages underwater, it's going to take a while before consumer demand strengthens again.
[+] [-] Retric|14 years ago|reply
PS: Or we could say on Dec 31 there will be a one time 50% tax on any money in offshore accounts and you can clean up this mess real quick with them quickly moving all that money back home.
[+] [-] jeffdavis|14 years ago|reply
They don't owe any taxes if they keep the money outside the country.
People tend to think of taxes like "skimming" off the top, and like some kind of inevitable thing that doesn't affect your decisions. But that is the wrong way to think about it: when taxes are high enough to have a significant impact, they do affect taxpayer decisions.
You seem to be saying that they should keep making decisions as if there were no taxes, and then pay high taxes because of those decisions. But that's completely unrealistic.
When taxes are higher than a trivial amount, the correct way to think about them is as policy that will have lots of effects; some obvious and some not obvious.
[+] [-] csmt|14 years ago|reply
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] sunsu|14 years ago|reply
[+] [-] vsl2|14 years ago|reply
This is a quite blatant attempt by these companies to game the tax system for their own (not public) benefit. As others have stated, these companies obviously held the foreign profits abroad hoping to have/create this type of lower tax opportunity to bring back those profits.
However, I don't blame these corporations for trying this - corporations' jobs are to make and keep as much money as possible, mostly in response to shareholders' desires for greatest economic returns. Anyone who owns stock in Apple and Google is a part of the reason for this attempt. If this tactic works, the market value of Apple and Google will increase and isn't that what essentially all shareholders want? Frankly, if these companies voluntarily paid all taxes without trying to find ways to minimize them, most shareholders will be furious at management.
Government, through its various corporate/tax laws, sets the limitations on what is permissible and not for corporations, and it hopefully tries to do it in the way that maximizes overall public benefit (balance regulation against enough corporate freedom to incentivize economic growth). The problem I see is that special interest groups have disproportionate power through buying influence. In order to prevent recurring instances of this same situations, the government should firmly show that it will not grant tax holidays now or in the future (then maybe companies will bring foreign profits back right away to the US, thereby paying taxes on time and maybe hopefully spurring economic investment).
My Conclusion: Companies (at least public companies) aren't wrong to try to maximize their value in every way within the controlled environment created by governments. The government should act in the way to incentive corporate actions in the best interests of the public (whether it be more tax dollars or economic growth or another objective). Just say no to the tax holiday.
[+] [-] lurker19|14 years ago|reply
[+] [-] gwright|14 years ago|reply
Ad-hoc government policies are wrong. Tax holidays, cash for clunkers, amnesty for illegal immigrants, tax credits for favored businesses, loan-gurantees for that new stadium or 'preferred' manufacturers (e.g. Solyandra), health care 'waivers' for certain companies, are all examples of ad-hoc government.
These sorts of policies shred the idea of equality under the law, encourage rampant lobbying in order to gain 'legal' favors, enable politicians and bureaucrats to wield power preferentially, reduce the predictability of the legal and financial environment (taxes, fees, licenses, etc), and skew economic decisions to fit into legislative time windows.
Laws should be uniform and consistent rather than moving targets with varying applicability.
[+] [-] orijing|14 years ago|reply
[+] [-] lubos|14 years ago|reply
anyway, this is absolutely unacceptable. those corporations knew what they were doing right from the beginning. they kept their profits overseas and were hoping government will decrease corporate tax at some point. it didn't happen, now they are applying political pressure so they don't have to pay the same tax rate as rest of America. THIS IS BULLSHIT and is not fair to rest of the society. damn you Google, Apple and Cisco
[+] [-] adaml_623|14 years ago|reply
It's so sad that corporations can't seem to actually apply ethical judgements in situations like this. Apparently the shareholders are better served by overseas unrepatriated profits than by actually receiving dividends which have had tax paid on them. And having a national government that can fund the infrastructure for their US offices.
(Not a tax laywer so reality may differ from opinion)
[+] [-] hcal|14 years ago|reply
Shareholders of international companies are better off if the company doesn't pay the tax penalties from repatriation. Those shareholders will pay taxes on dividends and capital gains, if nothing else. But the question is why would a company bring money back from China (for example) only to pay taxes on it before sending it back to China to pay for the next round of manufacturing? Also, international companies almost always are required to pay taxes on the profits in the country it was earned. There are games you can play to show the profit in your home country, but those are unethical. To understand why think about it from the point of view of each country a company operates.
When accounting decisions do come down to questions that could go either way, profit is shown on the books in the country that would incur the least tax expense. Its exactly what most individuals do. For example I love the big city I live near. However, I chose to live outside of city because a don't want to pay for the city government services when the little town I chose live in has similar services and lower tax rates. I pay for the city services I use through the city sales tax, but they are crazy if they think I'll start paying city property taxes on a house that I already pay property taxes on to another town. If I did own both a city home and a home in the smaller town, there is no way I would be OK with the city bring to tax me on both. Similarly Apple pays taxes on its US operations to the US but why should it pay the US taxes on foreign earned profits that it already pays foreign taxes on?
I have a hard time faulting a company for not paying anymore than the rules require. Unless every company can agree on how much extra they should pay above the minimum, a company not minimizing their tax burden is at a financial disadvantage and will lose marketshare and eventually be marginalized. The only way I know that you can obtain an agreement to the amount of taxes that should be paid is by changing the tax law. Want more capital brought back into the US economy? Lower the taxes below those of the countries the US is competing with for that capital. Want US companies to pay more taxes? Raise the base tax rate, and close loop holes. While I'm thinking of it... Loop holes are almost never what we think they are. The vast majority are not some shady accounting trick dreamed up in a darkly lit room by a weaselly accountant or tax lawyer. They are discounts on the tax rate voted on by congress, usually intended to produce some good like creating jobs.
Really though, if you think about it... It only makes sense to make it easy on companies to move money into the US. If a company wants its cash back in the US, there are only three thing I can think of it would do with it. 1. Put it in the banking system, which grows the economy and increases taxes. 2. Spend it, which grows the economy and increases taxes 3. Give it back to investors, who pay taxes on it and then do one of the other two things.
[+] [-] SamReidHughes|14 years ago|reply
And hurt other countries' economies. You have a strange sense of ethics.
[+] [-] kalleboo|14 years ago|reply
It's really sad how U.S. government policy is now so openly for sale to the highest bidder.
[+] [-] mcantelon|14 years ago|reply
[+] [-] jimworm|14 years ago|reply
The thing going for the US is that it's still a good place to spend that money, otherwise they wouldn't be contemplating repatriation in the first place.
Arguably, if these companies steadfastly hold on and do not repatriate their funds without a tax holiday, their shareholders should punish them for only making imaginary money... not that it'll hurt them in a real way.
If the US were to grant this tax holiday, they should've set a 0% (or 5.25% or whatever) corporate tax rate to begin with. At least it'll be fair to everyone.
[+] [-] wildmXranat|14 years ago|reply
[+] [-] RexRollman|14 years ago|reply
[+] [-] ajays|14 years ago|reply
[+] [-] sjwright|14 years ago|reply
[+] [-] lambdasquirrel|14 years ago|reply
1) It's been well documented in the financial press now that banks and companies are holding more cash than ever. In fact, Apple is holding more on hand than the gov't.
2) This tax break would be a one time infusion. Corporations can't count on it recurring, if say, they wanted to plan on using it to fund operating expenses (e.g. salaries).
3) Historically, older corporations do not hire sizable numbers of workers. To what extent are these the companies with offshore profits?
Ignoring any ethical judgements, to say that it will help boost the economy seems dubious to me.
Again, ignoring ethical judgements, I think it is fun to consider other consequences, like what effect it may have on corporations' investments on foreign soil. We might not be able to make jobs here, but maybe we could nudge them away from making jobs there? It only works if you think the world economy is not interconnected though.
Anyway, my point is that, yes, there are good moral arguments why this push is reprehensible, and people are making interesting points as such here. Going the other way, I'd like to think about what the hardheaded economic realities are (and they certainly are not about direct job creation). What if it merely adds dollars that these corporations could use for other causes, like lobbying? To what extent do we consider these activities to be good or bad? Donations to charity and contributions to PACs are often one-off.
One thing that tickles me is that when donations are big, they go into endowments, which are managed by various financial companies. Good for the charities, but it's not that there are other vested interests. ;-)
[+] [-] eddieplan9|14 years ago|reply
[+] [-] ajays|14 years ago|reply
Every law that gets passed has these hidden loopholes and exemptions that benefit a select few corporations. Who puts these loopholes in? This is all done surreptitiously, and I've yet to see any accounting for these loopholes.
What we need is a Wiki-like system while drafting legislation, so that every edit can be tracked to the author(s).
[+] [-] jshort|14 years ago|reply
[+] [-] jeffool|14 years ago|reply
Maybe a small, token increase? Or some method of increasing the tax rate dependant upon the length of time between the date the money was earned versus payed out as dividends? Surely stockholders wouldn't let companies sit on cash (that would eventually come back here anyway) if that were the case.
You wouldn't even have to be successful, just make a boisterous push to ram THAT through Congress. See how quickly these same companies try to get their assets here under the current tax law.
[+] [-] rmrm|14 years ago|reply
We really need to eliminate special loopholes and deductions and then reduce corporate rates.
Having a large spread between US and offshore tax rates obviously gives an incentive for US corps to move factories and such overseas, rather than to export from the US. I don't see any reason to have incentives for that behavior.
Reduce all of the paid for deductions and bring rates down. Simplify.
[+] [-] nl|14 years ago|reply
I'm as cynical about corporations as anyone, but in this case.. they use 100% legal means to reduce their tax, behaving exactly how anyone would expect them.
Some argue that it is an ethical issue, but that neglects the fact that these companies make a large proportion of their profits offshore, and bringing that money gets taxed too. Ethics in this argument are much more subtle than some would have you believe.
[+] [-] tomelders|14 years ago|reply
One way or another, that money will return to the US, and the tax will be paid accordingly. This will happen over a long period of time. If the US allows this tax holiday to happen, it will be throwing away billions of dollars in the long term with no real short term advantage, whilst sending a very dangerous message to people who use tax avoidance as a long term fiscal strategy.
It's corporate Americas job to make try and make the system work for them. It's the governments job to try and make the system work for everyone.
[+] [-] lubos|14 years ago|reply
Also, who cares about their trillion dollars... who gives guarantees this money will actually end up in national economy and not invested overseas with profits tied up in some off-shore country once again.
if America needs more liquidity in economy, ring FED. they will print just as much.
[+] [-] fauigerzigerk|14 years ago|reply
[+] [-] lawnchair_larry|14 years ago|reply
Give them this one, and rest assured, every company will take this bet and let the cash sit and rot until they can bring it back again.
The backstory, and why this is a terrible idea: http://www.rollingstone.com/politics/blogs/taibblog/evil-cor...
[+] [-] georgefox|14 years ago|reply
See http://www.washingtonpost.com/blogs/ezra-klein/post/the-wors....
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] rockarage|14 years ago|reply
Out of all big international corporations in the US, I would argue that Google and Apple are the most socially responsible (apart from privacy concerns). It won't make sense to bring it back to USA so it can sit in bank accounts and accumulate interests, because those funds are currently accumulating interest as we speak.
The obvious uses would be for spending, perhaps for acquisition and growth. The money would eventually be taxed. Keeping the Government in the pinch has forced them to crack down on waste and fraud. It would be much harder for them to bail out wall street this time around.
[+] [-] bmj|14 years ago|reply
Can you present that argument? I understand that Google does what it can design and build environmentally responsible data centers, but what else does it contribute to the public good?
[+] [-] georgefox|14 years ago|reply
Do you really mean to say that the solution to our budget problems is less revenue? The current deficits are the result of simultaneous decreases in revenues and increases in spending (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...). To get back to a balanced budget, we need more revenue and (eventually) less spending.
And I don't know to what extent the government has been forced to crack down on "waste and fraud." Certainly, that's not exclusively what's being cut.
[+] [-] othermaciej|14 years ago|reply