[BigV]

Originally Posted by classicman

Corp tax rates are a global issue now, unlike citizens. If we raise the corp tax too high then they put their "headquarters" overseas.

Perhaps a different form of taxation on corps is in order. Tax them on whatever they produce/sell here. Dunno just thinkin out loud.

Originally Posted by BigV

I"m just thinkin out loud too. so. truce.

If the whole of the situation was better "over there" whereever "over there" is.. they'd fucking go today. But they're not going. What they are doing, a lot of them, not all of them, but there is a LOT of offshore income being just held offshore. HQ in The Caymans or Bermuda. But the production facilities, all the officers live here... that kind of transparent shit.

If the profits are not repatriated, they're not taxed. Hey, I am not a corporate tax crusader. Not yet. There's a lot of learning ahead of me. But I know that their raison d'etere is to maximize profit. and that is fucking fine.

But not at the expense of others, shifting the costs for the things they enjoy to others, and I don't mean their customers.

Originally Posted by classicman

Thats what I was saying... Because they "headquarters" are in another country the revenue doesn't get taxed here.

Originally Posted by BigV

Yes, that's a problem, but there are plenty of other situations where companies HQ in other countries that pay taxes here. Toyota. Volkswagen. They're not US companies.

Originally Posted by TheMercenary

And they are moving in droves because the US is among those with the highest tax on the corps. So we drive them away and now how much are we taking in by taxing them? And taxing them more?

mercy--They're not moving in droves. The US does not collect anything close to the statutory tax rate on corporations. They're not being driven away, they're still here! Look around! What is NOT here is a fair share being paid by the corporations. And, this is important, they're doing so legally and properly.

We have built our tax structure---nononn... let me restart. We have let the corporations who have enormous influence and money craft our laws so that such a thing is possible, so that it is legal. They all want to do business here, but they want to pay the minimum tax possible. They want the benefits of doing business here, but they want someone else to pay for those benefits.

Here's an example from the news:

Google pays taxes at an extremely low rate

Drucker says the company saved more than $3 billion from 2007-2009 through a winding system of offshore subsidiaries. Google's not the only company that does this, he says; many other tech giants like Microsoft and Apple have similar structures. But Google's offshore tax rate — 2.4 percent by Drucker's count — bests its peers in the technology sector in ways that a retail giant like Wal-Mart could never hope to.

2.4 percent mercy. Not 35%. And Google makes a LOT of profit, wouldn't you agree?

In 2003, Drucker says, Google transferred all of its non-U.S. intellectual property rights to a subsidiary in Ireland.

Why would they do this? Sounds complicated, so... why?

"From that point forward," he says, "any profits coming from sales overseas would be contributed not to the U.S. parent — where they would be taxed at a rate of 35 percent — but to the Irish subsidiary."

The corporate tax rate in Ireland? 12.5 percent.

A-ha. This is why they did it. And in this case, you're right, they took their action because the tax rate in the US is higher than the tax rate in Ireland.

But Google didn't stop there, Drucker says. The company used a financial tool known in the corporate tax world as the "double Irish."

"The Irish subsidiary pays royalties to a second Irish subsidiary," Drucker says, this one that declares its tax residency in Bermuda, where there's no corporate income tax.

Google faced another problem it had to work around. The company would have to pay taxes to move money directly from Ireland to Bermuda, Drucker says, so it used another tool known as the "Dutch sandwich."

"So the payments go from the Irish sub to the Dutch sub to the Bermuda-resident Irish sub," Drucker says.

"The combination of these strategies has helped Google cut its effective tax rate overseas to the low-single-digit rate," he says.

See what they did there? They used the LAWS to LEGALLY shield income from work that originated in the US.

Bermuda Or Bust

Google, like most corporations, will be the first to tell you that this is all completely legal under U.S. tax law.

This is the problem. Not the numeric value of the corporate tax rate. That our laws are created in a way that permits this kind of maneuvering is a real drain on our federal revenue. Fuck the feds you say, Google says? I kind of doubt it. Don't you think they love having the benefits of living and working and doing business here in the US of A? OF COURSE THEY DO! One thing they love and would never leave these shores and do without is our legal system. Not just the superfuckingsweeeeetIcan'tbelievethisislegal tax laws, but the patent laws, eh? Google up (hahaha) patent wars, see if you think those could happen anywhere else. Anywhere. You can't do it. (Personally, I think our patent system is *seriously* fucked up [sorry grynch] but that's a thread of a different color). They want to stay here. They're gonna stay here. They just don't want to pay 35% of their profits in taxes.

Wait, wait. Let me reemphasize that. Google, and others, don't just dislike paying higher taxes which is completely understandable, they have a LEGAL OBLIGATION to do everything possible to make that number as low as legally possible. That's the rule for corporations, they have a fiduciary obligation to MAXIMIZE PROFITS (read minimize taxes). Again, that's part of our legal structure. I don't have a problem with that. Just the part that lets them do all their fucking business here, collect money here, live here and work here, but not pay taxes here. Fuck. That.

"We have an obligation to our shareholders to set up a tax-efficient structure, and our present structure is compliant with the tax rules in all the countries where we operate," a spokesperson told NPR.

Huh. sound familiar?

To some politicians and economists, that sounds like a good reason to lower the U.S. corporate tax rate and draw Google's profits back home.

But draw them from where?

"We know that the corporate income tax rate in a number of countries overseas — even in our competitors, in the G-7 countries — is in the mid- to high-20 percent range," Drucker says.

"U.S. companies are not shifting income into those countries. They are not shifting income into the U.K., France and Italy. They are shifting income into Bermuda and the Cayman Islands," he says, "jurisdictions where there is no corporate income tax at all."

"If that's the case, it seems to me that it raises questions about whether cutting the U.S. corporate income tax rate would do anything to change any of this behavior," Drucker says.

Ok. Ok. Perhaps cutting the rate is not the answer. But, we have lots of situations where a given country is acting in direct opposition to our best interest. I'm sure we can agree that we have a national debt crisis. And that forces that contribute to that debt are working against us. It is in this context that I view Bermuda and the Cayman Islands as acting in direct opposition to our best interest. We have ways of dealing with actors like this. Look at North Korea. Afghanistan. Canada.

We have ways to deal with countries that fuck with us. But we're not dealing with Bermuda and the Caymans like we deal with Afghanistan because the threat is different. Fine. Deal with it differently then. But recognize the threat, deal with the threat. And be aware that there will be strenuous resistance here at home from the elements that worked so hard and spent some much money energy to put these EXTREMELY FAVORABLE rules in place to begin with.