For Microsoft, $93B Abroad Means Avoiding $30B Tax Hit 316
walterbyrd (182728) writes "Microsoft Corp. is currently sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore, according to disclosures in the company's most recent annual filings with the Securities and Exchange Commission. The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company's home state of Washington."
Why should they? (Score:2, Interesting)
So why this assumption that they should be paying tax on this money to the US taxman? ;-)
Presumably it was all earned outside of the US.
As a UK taxpayer, I'd be much happier if they would pay UK tax on it (maybe we should offer them a deal - 1% of something is a better deal than 50% of nothing
And no doubt French, German, Japanese, Australian, etc tax payers would feel the same way.
So what's so special about the Americans?
Re:How can it be... (Score:4, Interesting)
(GP here) By the same logic I used in my post: even if you change your name while abroad, you are still the same person, and have to keep paying taxes. Besides, the US is already applying extra-territorial measures against a number of countries (Cuba/Iran/Russia/etc.). If the US govt. doesn't apply this to corporations, it's because the govt. doesn't want it.
I will reply to my own question: this all shows that the US is all about corporatism.
One man talked about this some 80 years ago:
I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.
http://en.wikipedia.org/wiki/Smedley_Butler#Lectures [wikipedia.org]
The tragicomic part is that US people are expecting these corporations to give something back... They will just leave and find a more profitable place. Corporations are said to be people, but in reality, they don't even have a nationality, their only authority is money.
$93B abroad... (Score:1, Interesting)
...means $30B less they need to charge consumers. Or $30B more they can spend on their workers. Or $30B more they can provide to their shareholders.
In fact, thinking about it, the only way the government really gets screwed is if they charge consumers less, since that's also less tax revenue - both giving more money to their employees, or their shareholders, will end up triggering more taxes.
Taxes may be necessary, but they should be as minimal as possible.
Re:Okay... and? (Score:5, Interesting)
Despite the URL, that page only talks about individuals, not companies. Can you show me I'm clearly wrong for companies? Additionally it says the states do their own thing as well and some simply ignore tax treaties.
That said, I might well be wrong! The US tax code is notorious for being amongst the worlds most complicated, in fact it probably is the most complicated tax code in the developed world at least. So if I'm wrong that would not be surprising, although even if your statement is correct for companies too it still amounts to paying tax on the same income twice. Even if it's at a lower rate than US income, this is nonetheless double taxation.
Re:Don't feed the parasites! (Score:2, Interesting)
You may be surprised to learn I am not conservative. Let me enlighten you a bit:
I am not religious. I don't believe the Bible or Koran or Vedas are divinely inspired. If all men could live in peace with no religion, it wouldn't bother me at all.
I think all drugs should be decriminalized. Not legalized, because that implies the government is 'permitting' their use. It isn't the government's business what I put into my body. Also, I don't do drugs and rarely drink alcohol.
I told people twenty years ago that the government shouldn't be in the marriage business. Let the churches marry people, let the government keep their noses out. This would include eliminating marriage benefits/penalties in taxes, inheritance, and other government concerns.
Gambling and prostitution are illegal because the government knows they can't effectively tax them, except in tightly controlled situations like lottery tickets, casinos, and brothels in one county in Nevada. Decriminalize those activities as well.
You apparently think I am a racist too. I don't even recognize faces when I am looking at people. I barely register their race or sex while talking to them. I have had conversations with people, when ten minutes later I couldn't tell you if they were black or white, male or female. I discuss views, not skin color or body differences.
Also, if you don't think that rules out racism, maybe you should ask my wife who is of Asian descent, my daughter who is then half-Asian, or my other family members who are various mixtures of white, black, hispanic, or asian. Surely if I am a racist, they would have noticed.
Maybe my politics would reveal my true intolerant self. However I voted for Barack Obama in 2008, even though I didn't agree with his politics. I felt it was time for a person with a different world view (other than white guy who lived his whole life in the US) to hold the office. I've stated this before, if you want to somehow verify my claim.
I will admit, I did not vote for Obama in 2012. I voted for Dr. Jill Stein of the Green Party. I disagree with almost every thing the Green Party has for a plank. But again, she was the candidate I liked, and she is the candidate I chose to vote for. My personal beliefs are not the most important part of my decisions. As Spock said, "The needs of the many, ...."
You seem to have jumped to the conclusion that I am a big bad conservative because I called out someone for attacking another poster simply for having different views. You further seem to believe I automatically support those views, just because I believe that person has a right to have them and speak them.
By the way, have you seen my sig? What conservative would have such a sig?
Re:Okay... and? (Score:5, Interesting)
Most of it is not actually earned abroad, due to accounting practices. MS USA sold all of their IP to MS Ireland, and pays MS Ireland a fee for every copy of MS software sold in the USA. That fee is almost certainly for an amount nearly (or actually) equal to the sales price. As a result, they claim a write-off on every title sold that's just about equal to that title's sales price. As a result, MS USA says they earned nothing on those titles. It's all based on technicalities that are unavailable to real people. Only corporations are allowed to account for profits and losses in such a way as to reduce their tax bills to nothing.