taxation

[BigV]

Originally Posted by TheMercenary

How is it a "freebie" when we charge among the highest of tax rates for corps?

By giving them a tax holiday they are encouraged to bring their offshore dollars back into the country, at a low rate, to reinvest in their own countries which create jobs. Understand?

Here's how it's a freebie.

I (not a corporation) have a pool of money that has NOT been taxed by the government, it's called my 401k account. Shielding that money from taxes was done legally. I can't access that money to do things like pay my mortgage, or create jobs, or buy food or whatever. I want that money now though, and if I access it, I will have to pay taxes on it as regular income (at more than 5.25%).

A corporation (not me) has a pool of money that has NOT been taxed by the government, it's called their offshore profits. Shielding that money from taxes was done legally. It can't access that money to do things like buy outstanding shares of stock, or create jobs, or pay executive bonuses or whatever. It wants that money now though, and to access it, it will have to pay taxes on it as regular profit (at more than 5.25%).

A tax holiday is just a giveaway of revenue that was due to the government (yes, due) at the time it was moved. The move did two things, avoid taxes and lock up the money. Locked up money is not very useful, not useLESS, just of limited use. For example, it can't be spent. And that's the main function of money, to be spent. Now, to spend this money, it has to "re-enter" our system. We already have rules for that, why do we, "the people", need a new rule? I can see why we, "the corporation", or we, "the 401k holder", would want a new rule, because we don't like the "cost" of the current rule. But those "costs" (penalties, taxes due, etc) were already known by the corporations and people that moved the money "out" of the system in the first place. Now we need a ... a... do-over? Cause, waaah, I changed my mind, I don't like the deal I accepted in the first place. *Sigh*.

We have a system for establishing and changing our rules, our laws. That system is in play now with lobbying efforts like the letter from the US Chamber of Commerce to the Congress. I just don't agree with their point that they need relief. I've looked at "the numbers" and I don't see how they're suffering, despite the enormous tide of propaganda to the contrary.

I don't think a tax holiday is needed for the corporations to continue to prosper. If they want that money, let them repatriate it through the already functioning system we already have in place.

[TheMercenary]

Originally Posted by BigV

Here's how it's a freebie.

I (not a corporation) have a pool of money that has NOT been taxed by the government, it's called my 401k account. Shielding that money from taxes was done legally. I can't access that money to do things like pay my mortgage, or create jobs, or buy food or whatever. I want that money now though, and if I access it, I will have to pay taxes on it as regular income (at more than 5.25%).

A corporation (not me) has a pool of money that has NOT been taxed by the government, it's called their offshore profits. Shielding that money from taxes was done legally. It can't access that money to do things like buy outstanding shares of stock, or create jobs, or pay executive bonuses or whatever. It wants that money now though, and to access it, it will have to pay taxes on it as regular profit (at more than 5.25%).

A tax holiday is just a giveaway of revenue that was due to the government (yes, due) at the time it was moved. The move did two things, avoid taxes and lock up the money. Locked up money is not very useful, not useLESS, just of limited use. For example, it can't be spent. And that's the main function of money, to be spent. Now, to spend this money, it has to "re-enter" our system. We already have rules for that, why do we, "the people", need a new rule? I can see why we, "the corporation", or we, "the 401k holder", would want a new rule, because we don't like the "cost" of the current rule. But those "costs" (penalties, taxes due, etc) were already known by the corporations and people that moved the money "out" of the system in the first place. Now we need a ... a... do-over? Cause, waaah, I changed my mind, I don't like the deal I accepted in the first place. *Sigh*.

We have a system for establishing and changing our rules, our laws. That system is in play now with lobbying efforts like the letter from the US Chamber of Commerce to the Congress. I just don't agree with their point that they need relief. I've looked at "the numbers" and I don't see how they're suffering, despite the enormous tide of propaganda to the contrary.

I don't think a tax holiday is needed for the corporations to continue to prosper. If they want that money, let them repatriate it through the already functioning system we already have in place.

You fail to recognize that our tax on the corps is among the highest in the world and there is no incentive for them to stay here. Many have left, many are leaving. Ireland has become the new corp tax haven. If they leave they leave with what little we get. The money parked offshore was done through legal means. I understand all that. You think we should make them bring it back and they should give our broken system of government more money to waste, I am not so sure about that. I think it has less to do with suffering of the corps and more to do with the normal process of generating money, which is what all businesses do, it is why they exist. Governments want to tax corps, corps try to figure out ways to shelter it. Until our tax system is completely overhauled and the laws changed, that money is not coming back.

[BigV]

Originally Posted by TheMercenary

You fail to recognize that our tax on the corps is among the highest in the world and there is no incentive for them to stay here. Many have left, many are leaving. Ireland has become the new corp tax haven. If they leave they leave with what little we get. The money parked offshore was done through legal means. I understand all that. You think we should make them bring it back and they should give our broken system of government more money to waste, I am not so sure about that. I think it has less to do with suffering of the corps and more to do with the normal process of generating money, which is what all businesses do, it is why they exist. Governments want to tax corps, corps try to figure out ways to shelter it. Until our tax system is completely overhauled and the laws changed, that money is not coming back.

Ireland, huh?

Ok, let's take a look at Ireland.

Economy - overview:
Ireland is a small, modern, trade-dependent economy. Ireland was among the initial group of 12 EU nations that began circulating the euro on 1 January 2002. GDP growth averaged 6% in 1995-2007, but economic activity has dropped sharply since the onset of the world financial crisis, with GDP falling by over 3% in 2008, nearly 8% in 2009, and 1% in 2010. Ireland entered into a recession in 2008 for the first time in more than a decade, with the subsequent collapse of its domestic property and construction markets. Property prices rose more rapidly in Ireland in the decade up to 2007 than in any other developed economy. Since their 2007 peak, average house prices have fallen 50%.

In the wake of the collapse of the construction sector and the downturn in consumer spending and business investment, the export sector, dominated by foreign multinationals, has become a key component of Ireland's economy. Agriculture, once the most important sector, is now dwarfed by industry and services.

In 2008 the COWEN government moved to guarantee all bank deposits, recapitalize the banking system, and establish partly-public venture capital funds in response to the country's economic downturn. In 2009, in continued efforts to stabilize the banking sector, the Irish Government established the National Asset Management Agency (NAMA) to acquire problem commercial property and development loans from Irish banks.

Faced with sharply reduced revenues and a burgeoning budget deficit, the Irish Government introduced the first in a series of draconian budgets in 2009. In addition to across-the-board cuts in spending, the 2009 budget included wage reductions for all public servants. These measures were not sufficient.

In 2010, the budget deficit reached 32.4% of GDP - the world's largest deficit, as a percentage of GDP - because of additional government support for the banking sector. In late 2010, the COWEN Government agreed to a $112 billion loan package from the EU and IMF to help Dublin further increase the capitalization of its banking sector and avoid defaulting on its sovereign debt. The government also initiated a four-year austerity plan to cut an additional $20 billion from its budget. A return to modest growth is expected in 2011.

So, all these companies that fled to Ireland, how'd that work out for Ireland?