taxation

[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.

[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.

[classicman]

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

[TheMercenary]

Originally Posted by classicman

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

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?

http://www.cbsnews.com/video/watch/?...roller;housing

http://www.cbsnews.com/video/watch/?...roller;housing

[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.

[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.

[Clodfobble]

Originally Posted by TheMercenary

Oh I agree, so why is it that nearly 50% of the income earners don't pay Federal income tax again?

Because they are poor.

[Spexxvet]

Originally Posted by classicman

I really don't think that's feasible.
You do realize that there are only 124,647 filers with incomes over $500,000.
If you add in those over $200,000 it totals 1,223,244 filers as compared to 68,400,596 of those under $200,000.
(figures from 2008)
Adjusting the rates on just over a million filers... I don't see where there are enough of them.

This isn't exactly apples to apples, but perhaps I can make my point.
On 9/30/2008, the debt was $10,024,724,896,912 In 2008, the Federal Individual Income Tax collected was $1,031,512,000,000. If you were to suspend all services paid for by individual income tax, and apply all of the individual income tax collected to the national debt, it would still take 9.7 years to pay off the national debt. With no services in the mean time. We can't do that. There's got to be more money coming in.

[Undertoad]

Bermuda and the Cayman Islands are British territories. You have now declared war on the EU. Wouldn't it be easier to adjust US business tax and business law so that it *attracts* business from all around the world? Here is a case where lower rates earn greater revenue, and simpler business law earns more jobs.

You can see this at work in the states. New Hampshire has gained population at three times the rate of next-door Taxachusetts for the last three decades, and current NH unemployment is 5.2% compared to Taxachusetts' 7.6%.

[BigV]

Originally Posted by Undertoad

Bermuda and the Cayman Islands are British territories. You have now declared war on the EU. Wouldn't it be easier to adjust US business tax and business law so that it *attracts* business from all around the world? Here is a case where lower rates earn greater revenue, and simpler business law earns more jobs.

You can see this at work in the states. New Hampshire has gained population at three times the rate of next-door Taxachusetts for the last three decades, and current NH unemployment is 5.2% compared to Taxachusetts' 7.6%.

Do you really think that the profits are accruing to the EU? I don't see any evidence of that.

And as to the changes in the laws to attract business--we already attract the business. The businesses are already here. They LOVE it here, and I'm happy to have them. Yay business!! What we DON'T HAVE is a legal framework that keeps abuse like this from happening. The laws are broken. We need better laws. And by better, I mean laws that make it necessary for these "corporate persons" to pay their fair share, like the majority of Americans do in our system of progressive taxation. The amounts/rates they pay is not in proportion to what others pay, and not by a meaningless amount, but by huge amounts. That's wrong. That's what must change.

[BigV]

Yep. Good point. We can't solve our debt problem easily, quickly, painlessly or with the effort of one wave of a magic wand.

Let's look at your example another way. Let's say we double the taxes, double the rate of collection. And we don't pay for ANY current expenditures. We suspend our debt payments, we stop paying all the federal workers, including the military. Still we'd need to furlough them for FIVE YEARS. It is a big, big problem.

Maybe we'll change the math in our favor with growth, the magic golden goose that made the delusion of the past decade easier to maintain. It will help.

Lots of REVENUE POSITIVE changes need to be made. I don't really care what the rate is. Nobody cares what the rate is, but everybody notices the number. I'm in favor of changing the number to *anything* if the effect is an INCREASE in the federal revenue.

There are other changes that can be made of course, like a reduction of federal expenses. No, I don't have one in mind. And any that is offered up to be sacrificed will be SOMEONE'S sacred cow.

Some links to make you cry:

http://endoftheamericandream.com/arc...our-blood-boil

http://www.ctj.org/ctjreports/2011/0...24_billion.php

[classicman]

This isn't exactly apples to apples

nope, its more like cinderblocks and jellyfish.
Revenue positive is the simplistic answer. That MUST be a combination of cutting and increases in revenue. HOW? Military MUST be on the table and BIG for one. Eliminating/reducing waste and fraud.
Restructuring our representatives benefit packages. yes, its mostly symbolic, but "everyone must contribute."
Determining what laws/loopholes primarily address the uber-wealthy and eliminate them.
Income of x,000,000??? - No reductions/deductions...
Modify the alternate minimum tax.
Increase the capital gains tax.
Adjust the corporate tax structure/rules/laws/...

Generating more from just the top will NOT be enough. Its the poor bastards in that middle income range (see breakdown above or read middle class) That are going to foot most of this. Unfortunately, that's where the pain can be spread out the most and thats range with the most filers.
The problem with addressing the top is that would cause people to do what is good for others and NOT themselves. (Spexx's definition of evil from their perspective )

Originally Posted by Spexxvet

If someone who endorses policies that are in direct conflict with my well-being, they are evil.

[Undertoad]

The businesses are already here. They LOVE it here, and I'm happy to have them. Yay business!!

IIRC you like taxing the rich. Me too. But to do that, you have to generate them.

In 2010, 214 people became billionaires for the first time.

Brazil, Russia, India and China produced 108 out of them.

http://www.forbes.com/2011/03/08/wor...011-intro.html

America's wealthiest still dominate the global ranks, but the U.S. is losing its grip. One in three billionaires is an American, down from nearly one out of two a decade ago. It has 10 more than last year but 56 fewer than its 2008 peak. The U.S. is adding new billionaires at a much slower pace; just 6% of its 413 billionaires are new this year compared with 47% of China's and 30% of Russia's.

The best way to beat the deficit is to have economic growth. We used to have it in spades. We were the biggest market economy and other big countries were socialist/communist. But in the mid-80s, China figured it out and also became a market economy. Twenty years later,



If the US experienced that sort of growth in the next twenty years, there would be a massive surplus. Health care would be an afterthought in the budget. So this is what needs to happen. The best way IMO is to create an atmosphere heavily in favor of the marketplace (not just *business* per se).

[BigV]

Originally Posted by Undertoad

IIRC you like taxing the rich. Me too. But to do that, you have to generate them.

--snip--

If the US experienced that sort of growth in the next twenty years, there would be a massive surplus. Health care would be an afterthought in the budget. So this is what needs to happen. The best way IMO is to create an atmosphere heavily in favor of the marketplace (not just *business* per se).

We have experience this sort of growth (from your link):

Three-fourths of Asia's 105 newcomers get the bulk of their fortunes from stakes in publicly traded companies, 25 of which have been public only since the start of 2010.

This looks like the tech bubble just before it went POP! There were lots of people who were rich "on paper", because they had gotten in early on the next big thing.

I don't begrudge other people or other countries their success. I am in favor of taxing the rich, and taxing the medium, and helping the poor (we can fight over what constitutes help later). I am also in favor of taxing businesses, since they occupy a space in our lives, in our economy, in our legal system, etc. What I am saying is that money begets money. And especially corporate money is ... if you'll pardon the mangled analogy... genetically void of any moral obligation to pay "their fair share". The share they're paying now is far less than what I consider fair.

Growth is awesome, like oxygen, like oxygen plus rainbows, just the bestest. I want it too. But it is important that the growth is spread around (yeah yeah like spreading the wealth around... whatevah). Businesses need customers too. Customers with money to spend at the business, ya know?

So, how do we encourage growth? How do we reduce the drag on our prosperity? How do we cure cancer? And a million other questions, ones we have to embrace, no, tackle simultaneously. We can't just do these sequentially. Once we get the growth happening THEN we'll look at your ideas about tax reform (followed by a pat on the head, etc). Nor can we seize all the assets of the moneybags only to look around and wonder what's a good recipe for grilled money.

These are real problems, we agree on that I believe. When I have a snarl of problems to solve, I try to triage them. Then I work on the important ones first. I believe the broken corporation tax structure is important enough to concentrate on first.

[TheMercenary]

Originally Posted by BigV

And especially corporate money is ... if you'll pardon the mangled analogy... genetically void of any moral obligation to pay "their fair share". The share they're paying now is far less than what I consider fair.

Given the US has among the highest rates of taxation and corps are moving their headquarters out of the US, what do you determine to be "their fair share"?

http://www.cato-at-liberty.org/u-s-c...e-the-highest/

Washington, DC, September 13, 2011 -- A new analysis of research on corporate taxes finds that U.S. firms consistently have among the highest effective tax rate in the world. Taking the most recent thirteen academic studies that compared effective corporate tax rates across nations, the Tax Foundation's most recent report documents the U.S. effective corporate rate as significantly higher than the average of all other nations.

"Taken as a whole, these studies indicate that the average effective tax rate for U.S. corporations - like the statutory rate - is one of the highest in the world. By every avail*able measure, the U.S. imposes a very high tax burden on its corporate sector, in com*parison to other nations, even after credits and deductions are considered," said Tax Foundation Adjunct Scholar Philip Dittmer.

http://www.taxfoundation.org/press/show/27619.html