Battle Lines Being Drawn As Obama Plans To Curb Tax Avoidance 1505
theodp writes "Barack Obama has squared up for a major battle with big business, announcing a crackdown on offshore tax avoidance and evasion by US multinationals that's designed to raise $210B and make it easier for companies to create 'good jobs here at home'. Obama cited a building in the Cayman Islands where more than 18,000 US companies are housed: 'Either this is the biggest building in the world or it is the biggest tax scam in the world,' he said. 'I think the American people know which it is.' The administration says that more than a third of US foreign profits in 2003 came from Bermuda, the Netherlands and Ireland, and noted US companies paid an effective tax rate of just 2.3% on the $700bn they earned in foreign profits in 2004. Among tech companies affected by the crackdown, Microsoft joined 200 companies who signed a letter complaining that the proposed tax changes would put them at a disadvantage with their rivals, Cisco moaned that the measures 'would adversely impact our ability to invest and grow our business in the US,' and Google declined to comment for the time being."
two ways to solve the tax "scam" (Score:5, Insightful)
two ways to solve the tax "scam"
1. raise overseas tax
2. lower domestic tax
guess which road the government takes.
w00t! (Score:4, Insightful)
I'm not a big fan of the system, but fixing it is a big step in the right direction. I wonder if/when we'll see the EU do the same thing (e.g. with Monaco).
Wont increase taxes on middle class (Score:5, Insightful)
What does he think is going to happen? These evil rich businessmen are going to go out and deliver pizzas in their free time to pay the extra taxes? Corporate taxes are exactly the same as raising income tax, except you are paying at the point of purchase rather then the point of earning. The only real point of corporate taxes is to give the government the ability to punish companies that fall out of favor.
Re:Not a tax scam (Score:3, Insightful)
Oh, right. Those tax cheats he nominated for cabinet positions. What a hypocrite.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Do both
You mean they'll actually have to pay.... (Score:4, Insightful)
For the infrastructure they use, for the costs they incur upon citizenry, for the government support they receive regularly, and the bailouts they get surprisingly often?
About. Fucking. Time.
The common citizen pays far too much of the tax burden, while the corporate "citizen" reaps too many of the benefits. The more they weasel out of, the more we, the people, have to pay.
Re:two ways to solve the tax "scam" (Score:3, Insightful)
Battle Lines? (Score:3, Insightful)
The stock market went up today.
This should really be viewed as a Return To Normality, or the removal of the corrupt tax avoidance schemes that the Talibangelists put in place.
To have a battle, you need to be fighting. The media just want to sell ads.
Go Obama (Score:5, Insightful)
Also, every time Obama does something wrong, we see a bunch of people making sarcastic comments here on how Obama represents "change we can believe in". I do not agree with everything he has done, but I do like to see this sort of thing, he seems like he is honestly trying to run the government in a fiscally responsible way. That's a big difference from our previous president who refused to cut spending to pay for his tax cuts, and even refused to allow the cost of his several hundred billion dollar unnecessary war to be included in the normal budget. We're all paying for that kind of "limited government" now, as will be our children and grandchildren.
BOHICA! (Score:2, Insightful)
This is the major problem with the political system. The people voted for change - news flash here, there won't be any change except what is left in your pocket. The machine must be fed. The US tax code is so bloated and filled with special interest deals that unless government shrinks, TAXES WILL GO UP! This is a Demopublican problem. There is no differences between the parties - and they are partying on your money.
If you push on the balloon it will expand somewhere else.
Buckle in, this is not going to change unless all the bastards are thrown out, ALL OF THEM!
And of course we can expect the legislation to.... (Score:5, Insightful)
And of course we can expect this to work flawlessly, and won't make businesses avoid the US, just like other great laws such as SOX.
How about lowering taxes and making the tax code simpler, so theres not all these loopholes and thus no reason to have the offshort accounts.
Complicated tax codes create the loopholes that allow this to happen, and this legislation will only make more of them.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Thanks in advance.
Re:w00t! (Score:3, Insightful)
And what did the Hungarian do to earn the money? Did he invest his savings and time to start a company?
Re:Am I cynical? (Score:5, Insightful)
They'll have to. Their business model depends on being able to "compete" with lower prices by cheating on their taxes. Money which could have been used to keep your children healthy, or educate them, or yes, even fight terrorism. What's worse, they did it so much that now the apparently depend on it.
If you can't make a profit playing by the rules then stop trying to make a profit and die. That's how the system is supposed to work, isn't it? (Whether or not that's a dumb idea is an entirely different debate...)
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Usually when the government lowers taxes they see an increase in tax revenue because of increased spending since taxes are lower. Instead of easing penalties or adding incentives to do business in the US, the administration has instead elected to add more penalties. Two guesses how that will turn out.... Not like it hasn't been tried before.
Re:Wont increase taxes on middle class (Score:5, Insightful)
I'm tired of seeing people duped into clamoring for corporate taxes as though they'll somehow benefit from it. Can we replace everything on TV with basic economic and political education for a month? People need figure stuff like this out. Politicians drag out the same tired tricks over and over and the sheeple eat it up like it's free candy.
Re:Am I cynical? (Score:3, Insightful)
Maybe the government should break out the antitrust laws as well, so when companies do decide to increase prices consumers will have
cheaper alternatives.
Re:w00t! (Score:5, Insightful)
You don't have to "earn" the right to be treated like a human being and a member of society. It's a duty of everyone to help with that.
Re:Wont increase taxes on middle class (Score:5, Insightful)
You're really going to defend tax cheats? They make a ton of money from US customers and they live in the US but they don't have to pay there fair share of taxes?
It all makes sense after reading your sig...
You don't know anything about socialism or fascism. If you really believe your own line then you would be calling pretty much all of Europe fascists. I'm not sure anyone else is really going to agree with you other than other whackjobs.
Easy solution for multinationals: move HQ (Score:4, Insightful)
Most of those Bermuda/Cayman holding companies exist not to avoid taxes entirely, but rather to keep the US from double-taxing profits that have already been taxed once by Europe/Asia, which is what the US does when this offshore trick isn't used.
It seems likely to me that if US companies can't do that any longer, many will cease to be US companies. It's not that hard to move HQ to Ireland or Canada or wherever. Then the US can become a nation of grunt workers while the real power and intellect (and taxable personal income) is abroad.
Re:Go Obama (Score:1, Insightful)
Fiscally responsible? Seriously? He received a raw deal budget wise from Bush, but his own proposed budget for 2010 is $1.178 TRILLION (source: http://www.whitehouse.gov/omb/asset.aspx?AssetId=764 [whitehouse.gov]). Indeed he's projecting less of a deficit than 2009's budget. Hooray!! But this kind of proposed spending is hardly fiscally responsible.
Re:Not a tax scam (Score:4, Insightful)
This may be the best summary of the M-Theory I've heard.
Won't the companies just move? (Score:4, Insightful)
If it becomes more lucrative and less of a tax burden to be a foreign business inside one of these countries with managed trade agreements instead of a domestic one, what will happen? The business will move because tariffs and import taxes become cheaper than domestic ones. That means unemployment grows and tax revenues drop.
This administration would be well served to tread lightly, and ensure that conducting business withing the U.S. is cheaper than foreign alternatives, else the U.S. may find itself with very little businesses conducting any business at all.
Re:w00t! (Score:3, Insightful)
He probably did this preposterous thing called WORK. Just imagine the nerve of some little person asking to be compensated and not scammed by tax evasion.
I have to repeat myself: Preposterous!
Where is the crossing line for lowering tax rates? (Score:5, Insightful)
It is not the case that "usually" lowing taxes increases revenue. It hasn't seemed to work too well for the last several rounds of tax cuts. Certainly there is a point where lowering taxes reduces total revenue. That point is a tax rate somewhere between 0 and 100%; where? That's up for debate.
Many economists would argue we passed that point some time ago.
SirWired
Market rules work for countries, too (Score:5, Insightful)
This is more or less what's happenning to the USA as a whole. American companies simply cannot compete against foreign companies, that's why the industrial sector is moving to Asia. It's useless to say "stop trying to make a profit and die", they died a quarter century ago [msn.com].
It's the US government at all levels, federal, state, and local, that should learn to live by the rules. When the corporations are moving overseas to places with lower taxes this means your taxes are too high, you should cut government spending and taxes at the same time.
Re:two ways to solve the tax "scam" (Score:1, Insightful)
By not pissing away money on other things.
You mean like roads and fire departments and such?
Re:two ways to solve the tax "scam" (Score:2, Insightful)
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Maybe they don't see a benefit in proportion to the amount of taxes they're being forced to pay. I certainly don't.
Also, we have a lot of unemployed people. We want companies to do more business and make more money so they can hire people. You think penalizing them and taking money from them is going to help with that?
Corporate Executive: I wonder if I should invest in the USA, where the people hate us, the government really hates us, and they want to take our money? Hmm. No. I should try to grow the business in a more friendly country. Or maybe I'll just take my money and retire early. I hear Costa Rica is nice.
Re:And of course we can expect the legislation to. (Score:5, Insightful)
The race to lower taxes is a race straight to the bottom. Businesses will continue to use tax havens as long as there is any benefit to doing so, and the simple fact is that a big economy like the USA cannot afford to lower tax rates to what a little place like the Cayman Islands can charge, e.g. basically nothing.
A better solution is to change conflict laws to ignore the formal jurisdiction of incorporation and instead use the primary place of business. Want to be a Cayman corporation? Then move your ass to the Cayman Islands, along with your entire family. Otherwise, you will be taxed based on where your company really is headquartered. This is something that the major economies of the world can cooperate to make happen, and we don't have to drop our taxes into the toilet to do it.
Re:w00t! (Score:5, Insightful)
Why blame Ballmer and Microsoft?
Ireland offers these companies a way to pay less in tax. You really expect them to not take it?
Ireland sees it as a way to increase their income so they do it. If you want to blame anybody then blame Ireland and or the EU in general.
Hey I am not a fan of Microsoft but in this case the blame seems really misplaces.
Of course you could just stop buying Windows.
You have Linux, BSD, and even Solaris now to choose from and build a local software industry around or you can keep buying Windows and pumping money out of your country. Windows is probably the path of least resistance... Kind of like going through Ireland for software sales.
Re:Wont increase taxes on middle class (Score:5, Insightful)
You make 2 flawed assumptions
1) consumers will be willing to pay more
2) price is in related to production cost.
There are few markets where these are true, generally price is the optimum price for making money from customer ( ~= the most most customers will pay).
Re:two ways to solve the tax "scam" (Score:3, Insightful)
Wouldn't a trade embargo sufficiently solve the problem without killing anybody?
Re:two ways to solve the tax "scam" (Score:4, Insightful)
And enslave the people there to produce for you. You might as well. It's a logical extension of your philosophy.
Re:Pathetic (Score:3, Insightful)
I think you're wrong about that trade law, mostly because the tax havens don't have any actual trade to use as a threat. Switzerland, Cayman Islands, Isle of Man, Jersey, Ireland, Luxembourg - these are the little countries that are holding the tax policies of the rest of the world hostage. Trade war? What trade war?
Before looking abroad, check Delaware, Nevada, ... (Score:2, Insightful)
These States function exactly as tax heavens not only for foreign companies...
Re:And of course we can expect the legislation to. (Score:5, Insightful)
Mod parent up. People who want to raise taxes on evil "big business" seem to not understand that the end result is that those evil "big businesses" will have to fire people or increase their prices to remain competitive successful.
Big businesses employ big numbers of people. This concept is lost on most Democrats and populists that scapegoat big corporations. You can't just blame big companies for everything and expect that they'll ignore this and carry on!
Here in Wisconsin we are looking at a number of laws that will substantially increase taxes on corporations doing business in the state. As a direct result of the anti-business climate in the state, a number of businesses have either relocated operations that were in Wisconsin or actively decided to decline to locate their headquarters in the state -- for example, our famous Miller Brewing Company, formerly headquartered in Milwaukee, merged with Coors of Denver and decided to relocate their headquarters to Chicago.
Re:Wont increase taxes on middle class (Score:3, Insightful)
Wow. Thank god you are the fringe minority. Somehow I find it hard to believe that those 18,000 corporations in one building do the majority of their business in the Cayman Islands.
Re:Where is the crossing line for lowering tax rat (Score:1, Insightful)
Name 3.
How about this (Score:4, Insightful)
Re:Not a tax scam (Score:3, Insightful)
He had people to do those things.
Also, he should be able to ask them, "Any skeletons in your closet that would make nominating you a risky move?" and expect to get a straight answer.
Preemptive war for TAX EVASION? (Score:1, Insightful)
Seriously, no. There are things you try before war. For example, cutting off their access to the world financial network. Passing law in your home state to not recognize any corporations housed in a foreign tax harbor, or to charge them triple or quadruple their purported taxes, or to charge them as if they were located in the United States, with a 1% administrative surcharge--unless their business is convincingly and legitimately located in the country in question.
You do not START A WAR, even with a country with barely a military to speak of, if you have reasonable alternatives. Further, the alternatives are better for our tax structure and don't penalize legitimate businesspeople in those states.
Raise taxes - but who will pay? (Score:3, Insightful)
It's funny listening to Obama preaching about raising taxes. Assuming American companies said "Gee, Obama is right, we should pay more taxes!", which companies does Obama think could afford to pay those taxes?
Even with the existing tax havens, traditional American companies like GM and Chrysler are going broke and selling their bits and pieces to foreign companies. How many trillions have the US federal government paid in the last six months to save American corporations?
Oh, OK, go ahead, raise those taxes. Raise $200 billion more in taxes and pay $200 billion more in bailouts, is that how it's supposed to work?
Re:Not a tax scam (Score:5, Insightful)
And actually, the evil businesses he is targeting are not cheats. They followed the law to the letter. Blame congress for leaving the loop holes.
Tim Geithner, Tom Daschle, Nancy Killefer, and Hilda Solis are tax cheats. The law was clear, but they were too important to follow it.
Re:Wont increase taxes on middle class (Score:5, Insightful)
What is proposed clearly is not the same as raising personal income taxes for several reasons, three of the most significant of which are:
1) Increasing corporate income taxes is not equivalent to raising personal income taxes in general. Even assuming, for the sake of argument (at least till we get to the next item), that raising corporate income taxes had exactly the same effect as raising personal income taxes on the income earned by employees of those corporations, not all personal income comes from employment in entities that pay corporate income taxes since people are employed by tax exempt nonprofits (whose income isn't taxed at all), sole proprietorships, certain classes of partnerships, and S corporations (whose income is subject to personal, not corporate, taxes), and federal, state, and local governments.
2) Increasing corporate income taxes isn't even equivalent to raising personal income taxes on the employees of the taxed corporations. This equivalency would require the assumption that corporations are paying wages that are above what the market will bear by at least an amount sufficient to cut wages by the exact proportion of the increase in corporate taxes. This assumption is clearly flawed.
3) Narrowing the opportunities for one form of tax avoidance is not the same as raising marginal rates for the same tax. Making it harder for corporations to avoid certain taxes using mechanisms some (but far from all, or even the majority) have chosen to utilize is not the same raising the rate of corporate taxation, since it has no effect on those entities subject to corporate tax that have not chosen to avoid taxes using the mechanism being attacked. It only negatively impacts those entities currently using the particular tax avoidance measure, not corporations in general.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
These are, in my view, important questions that need to be debated, research and argued for and against with reason, reflection and as far as possible with a comprehensive and broad study of the many many factors involved. Hopefully one would eventually end up with a policy based in reason that reflected practical reality and not dogmatic ideology.
Usually when the government lowers taxes they see an increase in tax revenue because of increased spending since taxes are lower.
Hard for me to evaluate this but I would be surprised if it was quite that simple. The economy is complex and there are many factors involved in levels that might not be immediately obvious. Of course if you provided links and information about in which period you are referring to we could perhaps evaluate further and speculate to whether or not the lowered tax was the ONLY contributing factor to increased revenue.
The goal, again in my view, should be to arrive at a tax, budget and economic policy that allowed the state to do all the things that are necessary (fire, police, roads, and other institutions depending on what you believe the Government should, or could, run or regulate); while providing the greatest amount of freedom for the individual. Though in this particular case I see only a Head of State trying to push for enforcing the laws and regulations that are already present. And to make it harder to avoid paying the existing taxes by finding loopholes. Debating about whether or not those taxes and regulations are fair is another issue entirely; but one, as I state above, is important no doubt about that. However anyone trying to excuse their criminal or unethical behaviour by saying "The law isn't fair!" can join the rest of the prison population; or actually try to use the democratic means available to argue for changing those laws. In this case "the corporations in question" are just a whining bunch of cry babies who believe they should be allowed to do what they wish disregarding what the laws of their own nation says.
Re:Not a tax scam (Score:3, Insightful)
Right, because he has a very large staff who's job is to carefully investigate the finances of everyone he nominated.
It's called the Vetting Process.
-----
"Fairness" is Marxism dressed in drag.
Re:Go Obama (Score:3, Insightful)
But this kind of proposed spending is hardly fiscally responsible.
Not necessarily. Virtually all economists agree that it's a good idea during a recession for the government to spend more, and tax less, thus running up a deficit.
When times are good, we slowly ramp off spending, and raise taxes to pay the deficit.
The problem now is that we had a president who cut taxes and recklessly increased spending during a bull market, while allowing infrastructure to depreciate, which has left us with a massive deficit and a pile of bills to pay.
As long as the spending can be justified, I'm fine with it.
Demonizing the rational (Score:1, Insightful)
Tax "avoidance" is legal. You "avoid" being liable for a sales tax when you decide to skip purchasing a pack of gum. Only a moron pays taxes he can reasonably avoid. Since when does doing the same make a corporation evil?
Don't be surprised if making it harder to avoid taxes forces companies and jobs out of the country. Companies that have that option are already planning to move.
And for the companies that can't move, as the folks above point out, the consumer always pays the cost of doing business, taxes included.
Re:Market rules work for countries, too (Score:4, Insightful)
Never mind that they have all their offices, employees, and executives in the United States, and do all their business with the US and the US's main trade partners. They say they're from this small island with a 1.5% tax rate, and all of a sudden they don't have to pay the taxes that sustain the society they depend on for their workers and offices. Companies which utilize these shelters are leeching off of each and every one of you by basically living in a place and not paying for it. How do you expect a government with a relatively low tax rate compared to other industrialized countries, but 300 million people and tons and tons of land to look after and maintain, to compete against a tiny nation of several thousand that can survive purely on the pithy tax rates they charge their businesses?
Re:Not a tax scam (Score:4, Insightful)
Re:two ways to solve the tax "scam" (Score:3, Insightful)
End the wars.
Cut spending.
Take your pick.
BTW, you don't really think businesses pay taxes do you?
Business taxes are just indirect taxes on people. Consumers pay more for goods, investors receive fewer dividends or the value of their shares decreases, and employees receive lower wages and have fewer job opportunities.
Politicians love business taxes because it lets them raise taxes on YOU without most of you even realizing it.
Re:Wont increase taxes on middle class (Score:3, Insightful)
You're really going to defend tax cheats? They make a ton of money from US customers and they live in the US but they don't have to pay there fair share of taxes?
Explain to me how corporations pay taxes. Please. You do realize that all private wealth is held by individuals, don't you? When a tax is levied on a corporation, it is paid by one of two groups of individuals: its shareholders, or its customers. Considering that a corporation's biggest responsibility is to generate wealth for its shareholders, who do you think ends up paying the taxes?
By going after these "corporate tax cheats", what Obama is really doing is raising taxes on the American public - the hidden taxes that are embedded in the price of everything we purchase. But it gets worse, because we live in a global economy: when the price of American-made goods are increased because of taxation, those goods become less competitive relative to goods produced overseas. Thus American companies suffer, go out of business, or move overseas taking their wealth with them.
Re:Market rules work for countries, too (Score:4, Insightful)
Re:two ways to solve the tax "scam" (Score:4, Insightful)
Wow. You are completely nuts.
You suppport a parasitic state with a big chunk of your income, and not happy with that you want people around the world to be equally enslaved as you are, under risk of being invaded by your slave army.
Taxes don't feed 'local populations'. Taxes feed bureaucrats and their friends.
Re:You mean they'll actually have to pay.... (Score:5, Insightful)
Can you people possibly be this naive?
Where exactly do you think the businesses are going to come up with the extra money? Unlike the U.S. government, they can't just print more of it. No, they'll raise prices, lower dividends, lower wages, and offer fewer jobs. FEWER JOBS. Does this sound like a good idea?
You're still paying for all those government services "the businesses" are using up, just indirectly. You fell for it! Bravo.
Re:Not a tax scam (Score:4, Insightful)
> Blame congress for leaving the loop holes.
No, thank them. Obama, being a fool, is about to learn why those loopholes exist. We put them in to keep some of the multinationals headquartered here in the US in practice by allowing them to headquarter on paper somewhere else and we all agreed to ignore the oddities that followed from that. Forced to actually choose many will opt to close up the skyscraper here and open one up in a more business friendly climate. Then profits from US operations will flow OUT instead of overseas profits flowing IN. I'm failing to see how the US wins.
This trend is going to be accelerated by the overthrow of the rule of law implied in the auto bailouts, etc. When the workers are running around seizing the means of production smart people start looking to get out while they can.
Re:Go Obama (Score:2, Insightful)
You have no idea what you're talking about.
There is no such thing as a corporate tax. Every tax hits consumers, somewhere. When businesses face tax increases, they will do one of the following:
1. Lay off employees.
2. Switch to a cheaper supplier..hurting that supplier...causing them to lay off people.
3. Raise prices (on consumers)
4. Cut shareholder dividends (to consumers)
It WILL hurt consumers.
This lie that businesses rape culture and run off with the profits is absurd and I'm tired of hearing it.
Re:Not a tax scam (Score:5, Insightful)
Well the point is that he plans to close those loopholes. But generally speaking, when you use a loophole to get around a rule, you're behaving unethically. I think it's reasonable to be upset at the businesses for that.
Re:two ways to solve the tax "scam" (Score:2, Insightful)
No shit.
We need to make it HARDER for companies to outsource and EASIER to work in the US.
One common example: there was a saw going around about how it would be "bad" to close the border w/ Mexico (even trying to stop all the fucking illegals) because certain circuitry for medical ventilators is only made... in a plant in Mexico.
Why is it only made there? Turns out right after NAFTA (which Comrade Obama promised to do something about... where is he on that anyways?) the company making the ventilator parts picked up and moved all their manufacturing to Mexico because the taxes and labor are cheaper there.
And of course, now it's biting us in the ass. This kind of change is long overdue.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Here's another option:
Require companies to generate ONE set of financial statements each year, not two.
At present, companies create one set of financial statements for shareholders (showing big profits) and one statement for the IRS (showing little or no profits). A simple law that forbids this two-faced scheme would do a great deal to bring companies in line.
Re:Wont increase taxes on middle class (Score:3, Insightful)
If corporations paid their fair share, like you and I have to do under threat of imprisonment, we could pay lower income taxes. My responsibility is to generate wealth for myself and my family and personally I think mega corporations that pay 2% in taxes are a detriment to my wealth generating ability. I have to give up social programs and pay higher taxes to support these companies that exploit our common resources and give very little to the common good.
Re: Complex tax codes (Score:3, Insightful)
Re:Am I cynical? (Score:3, Insightful)
No. No, no, no, no, no.
They *think* they depend on it. The big shots at big companies live big lifestyles and they've brainwashed not only themselves but everyone else into believing that they have some sort of immutable right to keep those lifestyles even if earned by deception, incompetence, or just plain circumstance. Remember the huge corporate bonuses paid by companies who received federal bailout money? It was amusing to watch the companies defend those:
Corps: These bonuses support families who are used to 7-digit incomes, you wouldn't take that away from them, would you?"
Gov't: Yes, we would.
Corps: Oh. But we can't take away the bonuses anyway because we'll get sued.
Gov't: Okay, we'll tax the executives directly to get the bonuses back.
Corps: Well, if the bailout money can't go straight into our own pockets then I guess we don't want it anyway.
This, I suspect is something like how the big businesses will react to actually having to pay taxes like everyone else. It has always disturbed me that in the U.S., a corporation is legally considered a person only when it favors them and a faceless unaccountable bureaucracy when it doesn't. It's about time that we stop allowing them to have it both ways.
Re:Not a tax scam (Score:4, Insightful)
Re:two ways to solve the tax "scam" (Score:4, Insightful)
They're called "prices".
Successful farms do not need subsidies. That's why they are successful. Small farms that practice production diversity and such are in competition with huge factory farms that, BTW, receive most of the subsidy dollars.
Your problem is that you think that a political process can be "done correctly" instead of the much more likely "done politically".
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Re:Not a tax scam (Score:2, Insightful)
In the real world, what actually happened was that some lobbyists drafted a bill that a congressman put forward, and then everyone voted 'aye' because they were scared of loosing campaign donations. Also in the real world, there's a fair bit of evidence that companies headquarter in places with the deepest talent pools, regardless of local tax rates. I think if you look at states with high tax rates, you'll see that they also contain a fair number of large businesses.
Re:two ways to solve the tax "scam" (Score:3, Insightful)
There is also:
3. Invade tax havens.
I am serious. Tax havens are parasitic states - they attract large companies and rich people by having very little taxes, but these taxes (and services for these companies) are large enough to comfortably feed the local population; while their own production capacity is nil. This is a minority strategy, and should be fought against.
Yeah! Invade Monaco! Take out the Channel Islands!
You, sir, are truly loopy. But I salute you.
Re:Not a tax scam (Score:5, Insightful)
Well gee, maybe the hundreds of employees who work, eat, and live near these headquarters.
Assuming of course that at least some of them pay taxes...
Re:Not a tax scam (Score:4, Insightful)
Because being lobbied by an American corporation sounds a lot better than being lobbied by a foreign corporation?
Re:Wont increase taxes on middle class (Score:5, Insightful)
If corporations paid their fair share
You seem to have missed my entire point. Corporations do not pay taxes, at all! If we impose a 75% tax on every corporation and eliminate all loopholes and tax havens, corporations still won't pay a cent in taxes. All wealth is held by individuals. When a corporation is taxed, you and I pay that tax when we buy their products. I don't know how to make this more simple. If only they'd teach economics in school these days, maybe people wouldn't be so easily duped.
When you argue for higher taxes on corporations, you're actually arguing for higher taxes on yourself. Think about it for a few minutes. It may feel like social justice to raise taxes on a mega-corporation, but your emotions are wrong. No matter what they call it, the money always comes out of the same pocket: the individual American taxpayer.
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Re:You mean they'll actually have to pay.... (Score:4, Insightful)
If a corporation has to raise its prices to pay its fair share of the taxes, then so be it. At least then I can make a more informed purchasing decision when deciding whether or not to buy their product.
Bingo!
It's not as if the corporations of the world have the ability to "pass costs" to us directly. We have to let them do so, by continuing to buy what they sell, or work on their payroll.
You'd think more of the people who support a free market would get this. A corporation cannot abuse it's customers or employees at will, except in cases where there exists a monopoly, a cartel, or a total absence of competition. If they have any competition at all, and that competition can adapt to the changing environment, then they're toast.
The reason this doesn't happen often is that the corporations who abuse the public are, by and large, the ones who get the go-ahead from the local government(s). This can take the form of the exclusive use of government funded infrastructure, direct subsidies, the total lack of, or lack of enforcement of, antitrust laws, and... tax breaks. Take those away, let them stand or fall on their own merits.
Re:two ways to solve the tax "scam" (Score:3, Insightful)
It does, though I'm not sure it meets your criteria for directly. The issue, and I'm sure I'm wrong on some important details, is that until you realize ("defer" technically) the earnings within the US, you don't owe taxes.
So imagine that you make all this money offshore somewhere for which you don't owe taxes, use that money to fund R&D offshore (might as well, right?) and move the rest to some low tax shelter that you feel is secure. The only money you have to bring in is either money that originated in local sales (i.e. essentially imported goods), and whatever extra may be necessary to fund your US based business.
On paper, you're making more money since you've avoided a tax hit, utilized cheaper labor markets to do so [at the expense of western nations with more socialized laws], and can still do business in any market you want.
By closing this out, you help any type of US job that could have been outsourced previously (because you didn't need to do it within the US). R&D is a big one, since it has a rather sizable trickle down effect, both in terms of locally necessary resources (fabs/factories/sales force/etc.), and in harder to quantify things that result in skilled and knowlegable people using new ideas to start businesses. R&D is also one of the most offshorable jobs, as its output is not tangible and impossible to tax.
So Obama has to fund the bailout, but he has to keep businesses interested in the US. Businesses do of course prefer to be here, our market is huge in terms of our overall wealth and spending, the question is how much can we get back from them before it becomes profitable for them to not be here. Probably not the entirety of what has been proposed...so the intelligent solution is to cut them a small break on taxes they will now owe (all they care about is money, wherever it comes from), while ensuring the nations long term well being by picking what resources will remain here (which is theoretically what government exists for).
Re:Not a tax scam (Score:3, Insightful)
Re:Not a tax scam (Score:4, Insightful)
The above mentioned did not make mistakes. They knew they owed taxes but decided not to pay them.
Re:Go Obama (Score:3, Insightful)
"When times are good, we slowly ramp off spending, and raise taxes to pay the deficit."
Except that has never, EVER, happened. The "virtually all economists" you cite *believe* it's a good idea, because some guy named Keynes said it -should- work. The fact that step 2 hasn't happened yet isn't enough to deter them in their faith, because THIS time their will be people in charge who do things the right way.
Keynesian economic theory has such a stranglehold on economic and political thought people don't even ask if "it's a good idea during a recession for the government to spend more, and tax less, thus running up a deficit." They debate the degree to which they should occur.
If medicine was still in the same state of economics, we'd be debating whether to draw 1 pint of blood or 2 to cure a cold. I mean, there's no real proof it's worked in the past, but the alternative would be to admit we don't know what to do, and then how would economists get interviewed on NPR?
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Business taxes are just indirect taxes on people. Consumers pay more for goods, investors receive fewer dividends or the value of their shares decreases, and employees receive lower wages and have fewer job opportunities.
Yeah, it is funny how the price of everything went down when corporate tax cuts were given. Oh wait, they stayed the same. If we actually start collecting corporate income taxes, I'm betting what will happen is that the companies will earn somewhat less net profit, and continue charging whatever the market will bear like they always do.
Businesses do not set prices at (cost to produce) * (1 + modest profit ratio). They set prices to maximize revenue by maximizing price times expected sales at that price. If that's less than it costs to produce, then they find another business, if it's more, even a lot more, then yee-ha! When their costs go down, they only tell you they're "passing the savings on to you!" when they think they can get more money by undercutting others. When their costs go up, they might like to charge more, but if that means fewer people will buy and they end up with less money, they suck it up and go on at the current prices.
Unless I'm mistaken, it's mostly income taxes that are at issue with foreign tax havens anyway, which are based on profit and shouldn't push a company from black to red. On the other hand if things like payroll taxes on U.S. employees increase, that's more incentive for them to outsource, not that they really need any more. Outsourcing is a bucket of worms to be sure, since just about anything you do to try to stop it just encourages it, and doing nothing means it's happening rapidly regardless.
Either way, don't expect the price of your next Dell to go up 12.4% because their tax rate did too. It just doesn't work that way.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
While true, that's an overly simplified view of what is being taxed, and how taxes play out economically. In essence, it's a straw man -- it diverts from the question of what activity is actually being taxed (and thus what activity is being inhibited by the tax).
In the end, there are only four types of taxes: taxes on labor, taxes on capital, taxes on imports, and taxes on consumption.
Each type of tax has different impacts on the economy, although their effects overlap in a lot of ways. Corporate taxes are a tax on profitable capital investment. While the tax is in the end born by everyone, those it impacts the most are capital investors. This is very different from a tax on labor (income tax) or a tax on consumption (sales tax).
I don't buy into a lot of the class warfare concepts; however, I do believe that assigning tax heavily on labor is a bad idea. I personally don't cherish the idea of a permanent underclass -- and it's getting ever harder for someone who earns primarily from labor to climb into the ranks of those who earn primarily from capital gains, save via tax-sheltered investment plans like 401ks or Roth IRAs.
Re:Not a tax scam (Score:3, Insightful)
This is true, and they remain blameless up until the point they either
1. Pay lobbyists andor Congress to advocate laws creating those tax loopholes, or
2. Write open letters to Congress QQing that they no longer get to enjoy a 2.3% tax rate while the rest of us donate a third or more to uncle sam.
In my opinion, companies sending jobs overseas (that includes military and reconstruction ventures) are the root cause of the US economy being in the shitter. The housing bubble is just speculation and good marketing managing to hide the ugly truth for a couple years. If you circulate all you money within your own economy, someone still has dollars to spend and the cycle continues. When we send it all overseas, the country piggy bank dries up. I therefore have no pity for companies that claim they won't be able to make it if we levy on them the same taxes every US based company currently operates under. They can adapt, or get the **ck out - there's plenty of other companies that would love to take the market share.
Re:Market rules work for countries, too (Score:3, Insightful)
It's the US government at all levels, federal, state, and local, that should learn to live by the rules. When the corporations are moving overseas to places with lower taxes this means your taxes are too high, you should cut government spending and taxes at the same time.
Where do we start? Should the US adopt the environmental regulations of China and India? Or, perhaps the military of Brazil or Ireland? I don't disagree that the US needs to cut government spending, but your answer oversimplifies the problem to ridiculousness.
Re:two ways to solve the tax "scam" (Score:4, Insightful)
Sure it will, if the 30% rate shuts down the businesses that grow the economy, or run them out of the country. People and companies that can barely pay their taxes spend less on the very movement of goods and services that does grow the economy. A small percentage of a lot of money moving around produces a lot more revenue than a large percentage of a receeding economy that you're busy trying to inefficiently nationalize into oblivion. See Venezuela for an example.
Lower tax rates can spur economic growth, but so can government spending (funded by higher tax rates)
Except that you're laundering all of that money through a notoriously inefficient, pork-laden, sinkhole that kills its efficient allocation.
Re:Raise taxes - but who will pay? (Score:3, Insightful)
which companies does Obama think could afford to pay those taxes?
Chevron made $1.84 billion in profit in this year's first quarter.
Exxon Mobil Corp. $4.55 billion.
Royal Dutch Shell $3.49 billion
BP $2.56 billion.
First two are American; last two aren't American but have substantial American operations.
Totally man! (Score:5, Insightful)
If you keep insisting that corporations don't deserve all of their tax breaks and special treatment by the government, the really greedy ones may be put out of business. Then, the network of Fortune 1000 CEOs might make less money, and they might have to actually work, or not even receive hundreds of millions of dollars in bonuses when their businesses are failing.
This may lead to the end of large, bureaucratic, inefficient mega corporations which exploit people and resources for short term profit, using monopoly tactics and sleazy practices like bribing politicians or using tax havens or ripping off their customers. You might end up with unions, four week vacations, the right to health care, and a lower poverty rate!
You fell for it! Bravo, douchebag.
Re:Where is the crossing line for lowering tax rat (Score:5, Insightful)
I dispute the premise that maximizing tax revenue is a legitimate function of government.
Re:Not a tax scam (Score:1, Insightful)
> Still running scared of the Red Menace, I see.
Yes. Better question is why aren't you? Or did you think the failure of the Soviet Union settled everything? It should have, but Communism is a religion and no number of failures will convince the true believers that their religion is false. Nope, the SOviets failed because they didn't 'do it right.' whatever the hell that means. But at any rate, Communism is still alive (although mutating wildly) in China. Communism is still alive and well in our own hemisphere. And most importantly, Communism is still alive and well here in the USA. And just like Vietnam and Iraq's most important battles were fought in Washington DC's halls of power, the NY media and the academy, the Cold War rages on in the same places and the decisive battle has yet to happen.
> When the controllers of the means of production fail to keep the means of production working properly,
> smart people look to take over the means of production.
Interesting notion. The UAW was the biggest contributor to the failure of the US auto industry. By raising labor costs to the point only huge luxury cars could earn a profit. So now the POTUS has reached into the market and seized two automakers and awarded them to the unions who created the problem but contributed heavily to his campaign. When a union gets majority ownership (and not by buying it, but by seizing it by virtue of political power) of their workplace what other term you you prefer we use to describe it other than "the workers seizing the means of production." Which has been the Communist rallying cry since the perverted notion began.
But we do have a system to deal with the controllers of the means of production failing. It used to be called bankruptcy court. But the UAW would lose bigtime so it wasn't considered a (politically) viable option.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
So the question is, what are the things that we can tax and minimize the negative impact on the economy?
Since I believe trickle-down economics has been shown to not work, I believe taxes levied on capital investment are a good bet. One can increase capital investment to increase income. There is a limit to how much a person can increase labor to increase income.
Then the question becomes.... (Score:3, Insightful)
A lot of that answer is depending on who's measuring "better", obviously. But there's a lot of little effects that are hard to measure in reality, even decades after the fact.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
The day I have a business, a house, and three cars to protect instead of a flat and a bicycle is the day flat taxing will sound fair to me. The rich benefit disproportionately from the benefits of taxation and should therefore pay a larger share.
The day that the X cents on the dollar sales tax on the pasta I buy represents the same fraction of my income as it does to an individual on one hundred times my income is the day a flat tax sounds fair to me.
The day that the last dollar I earn a week has the same subjective value to me as the last dollar Bill Gates earns has to him is the day a flat tax sounds fair to me. Taking 1% more from the super wealthy is not the same as taking 1% more from the very poor, even if it looks the same on paper.
Progressive taxation isn't just about redistribution of wealth, it is about a fair tax system that tries to match the value of the tax taken and the benefits an individual receives to the amount they pay.
Just because flat sounds fair using simplistic "everyone pays the same fraction of their income (or wealth)" reasoning doesn't mean it is. If you want to be actually 'fair' then you need to consider the consequences of a policy, not merely if it feels right on paper.
Re:Not a tax scam (Score:5, Insightful)
That way, they can move elsewhere if they want, but they would still be losing their largest market.
Re:Go Obama (Score:5, Insightful)
but I do like to see this sort of thing, he seems like he is honestly trying to run the government in a fiscally responsible way
Oh, lord you really don't believe this do you? He just posted a 1.75 trillion deficit. $200 billion in corporate taxes is nice and all, but it's like handing a band aid to someone you just shot.
Re:Where is the crossing line for lowering tax rat (Score:5, Insightful)
What you said is clearly pointed out by most economists in studies on these topics...
BUT, the standard party line of reducing taxes is that "cut taxes to increase revenue".
It is frankly, based on nothing but hot air and/or lies and most serious economic studies have found little to no room for quibbles in that.
Re:two ways to solve the tax "scam" (Score:4, Insightful)
The only valid reason for a nation to subsidize food production is if it's regarded as a national security issue. US farmers would never be able to produce food as cheaply as e.g. farmers in Africa or Asia; if left purely to the free market, in theory, US food production will drop dramatically in the face of cheap food imports. This is "good" in that food would be much cheaper. However, since food is such a basic necessity, it creates a dependency on foreign nations that would give them unnecessary amounts of power; for example, if the US were dependent on China for food, or if the US were dependent on other countries for food that China invaded (as they have no strong military), it would give China the ability to cut off a big chunk of the US's food supply, thereby weakening it (e.g. in preparation for taking over).
I'm a libertarian and free market advocate, but I can see some argument for maintaining an otherwise uncompetitive local food production capacity.
Re:I block the Politics section for a reason (Score:1, Insightful)
Do you know how blocking sections works?
When you do NOT block them, they appear as normal on your main page.
When you do block them, you have to dig into the section to see them.
If you don't have the sections blocked, you'll see no change if the stories are properly categorized.
Boy you are a stupid ass-hat.
Re:Not a tax scam (Score:5, Insightful)
While corporations love to move labor operations offshore to save money, to places like India and China (certainly not Madrid), I have a feeling the corporate executives themselves don't really want to live in places like that, as evidenced by the fact that they all live in the USA, where their personal income is taxed far less than in places like Spain, and they don't have to put up with the living conditions of places like India and China (or the culture difference, for that matter).
Re:Not a tax scam (Score:5, Insightful)
Because communism is dead, and has been for a long, long time. I am scared of fascism, which is far different from Communism, and I think you need to learn what the difference is. Key aspect: in the Cold War Soviet Union, the workers did not control the means of production. Neither did they in Communist China, nor do they in modern China. In actuality, it is logistically impossible for the workers to control the means of production on a large scale. Hence, I do not fear that.
Yet another falsehood from the right. The Ford Ranger was hugely profitable, despite labor costs. The smaller cars that were produced by Honda and Toyota faced labor costs very close to that of American car companies. Yet they were very profitable -- and the difference in profit was greater than the difference in labor costs. The failures of the auto industry are squarely on the shoulders of those who were unable to foresee and meet the demands of the market. This happened because the automakers in the US grew accustomed to creating and molding the market, and were unable to adapt to quality competition being able to serve the actual demands of the market.
I think you consider the unions a bugaboo. So be it; it helps me understand where you're coming from, and where I'm unlikely to be able to get a point across. The biggest one being that the health of the UAW, in this case, is a bellwether for larger labor concerns. And by labor, I don't mean organized labor, I mean working class. These are the people that ultimately pay if the automakers close their doors. Any sane capital investor loses a small part of their portfolio; any worker entangled loses their entire livelihood for a while.
I understand the philosophy you are coming from (I once believed much the same), but please be aware that the Communism bugaboo was supported by the government largely to keep the domestic populace in check. The external threat is a wonderful tool for those in power...
Re:Not a tax scam (Score:1, Insightful)
You would rather he go after corporations because you're rabble. Rabble love it when some populist politician "sticks it to the man", and "corporations" are the current boogie man.
The problem is that it doesn't matter if corporations make "billions of dollars". That money goes exactly one place: into a person's hands. That person pays taxes.
Corporate income tax is just another tax on stockholders, employees, and customers but dumb people love it because they think they're getting one over on "rich fat cats". Now tell me, who doesn't fall into one of those categories?
Re:Avoision. (Score:5, Insightful)
What the fuck, people?
Evading taxes is evading taxes.
All I did was reference a fucking Simpsons quote.
Evade. Avoid. Both are words. Both have meanings. The meanings are extremely similar, and the words are often synonyms.
I don't give a fucking shit about the crime of "tax evasion" vs legal acts to avoid paying taxes.
Regardless of what is a crime and what is legal, evading/avoiding taxes is tax evasion/avoision. It doesn't matter how you do it or whether or not it's legal.
Seeking ways to not pay taxes, or to pay less taxes, can be referred to as evading or avoiding taxes.
FUCK.
Re:Not a tax scam (Score:4, Insightful)
Yes, so unlike those non-socialist countries IRELAND and HOLLAND. Sheesh.
Re:You mean they'll actually have to pay.... (Score:1, Insightful)
For the infrastructure they use, for the costs they incur upon citizenry, for the government support they receive regularly, and the bailouts they get surprisingly often?
About. Fucking. Time.
The common citizen pays far too much of the tax burden, while the corporate "citizen" reaps too many of the benefits. The more they weasel out of, the more we, the people, have to pay.
Alright, as has already been stated, but apparent you did read, but surely need to, THERE IS NO SUCH THING AS CORPORATE TAXES. That's right, it's a scam, and lie, and soft wool pulled over your eyes.
Too many people personify the "evil" corporations as having a giant vault of gold that they can swim in at there leisure. Well, pulling aside the mechanical problems involved with swimming in money, let me just say that those people should stop watch duck tails re-runs immediately.
Corporations, by DEFINITION, don't hold money. When they make profit, they pay out that profit to preferred stock holders in the form of dividends. If you think a corporation is making too much money, might I suggest getting a clue and buying some preferred stock in that corporation. Not only will your point of view change, but you will get a chance to witness first hand why capitalism works.
So, the money "we the people" pay a corporation for a good or service goes to pay for the cost of that good (materials, resources, people), taxes, and a profit margin. The later of which, if all goes well, goes directly to R&D or stock holders. This is what people mean when they say that corporations don't hold wealth. So, when the tax rate "on corporations" is increased, they can either a) reduce R&D, thus stifling innovations, and keeping price constant b) reduce profit, thus keeping price constant, but not full filling their responsibilities to stock holders and watch their stock price, and future investment dollars tank or most likely c) raise prices, thus making the money "we the people" pay for their goods and services equal the total amount of money paid due to the higher tax rate. Now, our overly complicated legal and tax system does make it slightly more complicated that all, but the concept really is that simple. I'm pretty sure you covered at least some of this math in elementary school somewhere.
I often times blame liberalism on the inability to think through a problem to the end, but this the extreme case of not being able to think through a problem to the second step.
Re:two ways to solve the tax "scam" (Score:3, Insightful)
Can I be both anti-tax and anti-war?
Re:Not a tax scam (Score:5, Insightful)
I'm just pointing out why I don't think they would actually move their headquarters in reality. No matter how cheap taxes are in India, for instance, no American executive wants to move there. They want to live here (and not just anywhere in the USA, but in expensive places like California, even though much cheaper places like Alabama and Mississippi exist), and enjoy the benefits of using offshore tax havens and moving production offshore.
Re:You mean they'll actually have to pay.... (Score:1, Insightful)
Where exactly do you think the businesses are going to come up with the extra money?
cutting the pay gap between workers and management
Re:You mean they'll actually have to pay.... (Score:1, Insightful)
If they don't want to pay more in taxes, why not raise wages or invest in R&D? Wages/R&D are expensed and are therefore tax deductible. While this might have no immediate positive impact on profits for the company, at least they could still screw Uncle Sam AND get something of benefit to their company...
Re:Not a tax scam (Score:5, Insightful)
Right, because he had time to carefully investigate the finances of everyone he nominated. Troll.
Obviously someone had time to investigate. (We found out, after all.) Maybe it's more a competence problem rather than a time problem. Or maybe they just didn't care.
Anyway, what's so hard about filling out a tax form correctly? How much "careful investigation" does it take? Every single adult in the US is expected to do it (and get it right) every year.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
And so it is for C-corps. S-corps, for example all publically traded companies, pay corporate income tax.
I think the problem with taxing only the owners on their capital gains is that we'd lose our ability to influence businesses by means of tax law. Right-wingers may disagree with the principle there, but I feel that taxes are the only viable means we have of forcing businesses to internalize erstwhile external costs (like pollution).
So I feel corporate income taxes are a necessary tool in addition to capital gains tax.
Comment removed (Score:3, Insightful)
Nowhere near the same (Score:5, Insightful)
One of the three was hoping for the tax liability to expire beyond the normal collection point.
Sorry, but there are so called elite of the crop and if they can't do their taxes right it either means...
a) the tax code is too convoluted for even experts
b) they are dishonest
c) all of the above.
I guess we can thank Obama for at least identifying scoundrels in his Administration, the problem is he still allowed them in. Congress gave them a pass which isn't saying much for that group either.
I welcome the IRS to check my numbers. I know I am honest. I also know that it is right. You have to figure that not only do these guys know better but many probably had help filing. It doesn't wash.
I would love the IRS to be required to go over in detail ALL members of Congress EACH YEAR. They should be subject to the utmost scrutiny at all times. However just like Presidents too many adopt an elitist "nobility" attitude that they are too good to be closely examined. After all, it is they who protect us and therefor deserve the latitude.
Re:Not a tax scam (Score:2, Insightful)
Do they have to be US owned?
What does that question even mean? You want to track down all the billions of shares, find who they're registered to (pension schemes, investment funds, other companies, lots and lots of individuals with tiny holdings) track down where they are or more to the point who owns those assets (more and more companies with more and more minority individuals, scattered across the world...). There isn't an end to the paper chase. At least, not one you'll ever reach. Not because of any nefarious dealings but just the reality of international trade and the way corporations are designed. There's no answer to e.g. "is IBM American owned" beyond "IBM's ownership is diverse". That's before you even concern yourself with nominee ownership.
Re:Then the question becomes.... (Score:4, Insightful)
A "Republican fantasy"? Interesting, then, that we're projected to have a deficit or $1.2 trillion next year.
With a budget proposed by a Democratic President, written by a Democratic House, passed by a Democratic House and Senate, and signed by a Democratic President.
I think the evidence is pretty clear that the fantasy is a deeply held belief of both Parties.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
All taxes punish success. You can't get around that fact.
You know, I hear this one all the time, and it just doesn't ring true to me. By most standards, I'm one of the people who has found success (starting reasonably low on the totem, even). I don't feel particularly "punished".
It's true I'm taxed vastly more now, than I was when I was making minimum wage. This isn't "punishment", it's paying my dues.
I'm taxed proportionately based on the benefits I've extracted from the system. Without community college, public health care & other social safety net systems I'd have never made it this far. Now I'm paying back into the system.
The idea that progressive income taxes are a disincentive for success is the stupidest thing I've ever heard. If that was true, people would stop playing the lottery, no?
Why bother getting rich if you're just gonna be "punished". Oh right. Having more money is always better than having less money.
Stop bitching people. It's patriotic to pay your taxes, unless they are unjust ... and they aren't.
Re:Laffer curve tops at 60% max tax rate. (Score:3, Insightful)
Re:Not a tax scam (Score:5, Insightful)
Taxes on business is retarded. I know everyone wants to stick it to big business, but it makes no sense. When companies make money, the company either: is used to pay off expenses, including employees (who pay income tax) rent, etc (who pay property tax) or buying shit (and paying sales tax). Or they reinvest it (which hopefully leads to bigger income in the future) or they pay it out as some sort of dividend or stock buy (in which case those who benefit will be taxed with income/capital gains tax). Taxing the businesses profit amounts to double-dipping. The result of which is businesses now must compete with their competitors in not just the quality marketing, and price of their products, but also in how good they are at evading taxes. A company who manipulates its balance sheet to minimize tax liability has a competitive advantage against one who doesn't.
the result is ploys like being "headquartered" in a tax haven, and balance sheets that have been manipulated to hide as much information on their actual assets as possible. They further avoid taxes by buying influence over politicians to get tax rebates and incentives and other such bribes.
The result is, companies still manage to pay little to no taxes, the balance sheet manipulation makes accurate assessment of businesses impossible for investors and regulators, and competition is stifled because established businesses have the politicians bought and paid for, making sure any upstarts don't get the same rebates and preferential treatment they got.
The only people actually paying business taxes are small businesses, who cannot afford a team of lawyers, "creative" accountants, and massive campaign donations to minimize their tax liability. These are the exact same businesses who politicians claim to support.
Everyone knows when it comes to taxes the game is rigged. If a country cracks down on tax evasion there will be another one right behind it looking to claim all the jobs and economic stimulus that business creates. Obama's crackdown will probably lead to a net loss of tax revenue, and cost a lot of people their jobs.
Re:two ways to solve the tax "scam" (Score:5, Insightful)
Don't you think that living in one of the world's safest and healthiest countries is worth something?
How else can you fund the social machine that allows you to have a decent standard of living? Roads, hospitals, education, and government costs money.
It doesn't sound like punishment to me.
Re:Not a tax scam (Score:3, Insightful)
> Obama isn't a fool. He knows what the consequences will be.
There is much merit in what you say but I still hold out to one hope. Overreach. Because Obama is fool and almost zero experience he might not listen to wiser heads in his Party (and I'm not talking about the Democrats). Remember that with Specter's coming out Democrats own Washington. Yes the Joker's eventual arrival (if that ain't the Universe having a bit of fun with us what is!) their rule will be total, but with Snowe and/or Collins available to 'be bipartisan' when needed they already have effective control. And come the next elections if the economy is still in the crapper Obama just might be Carter 2.0. Assuming the Republicans can find A) find a leader and B) nominate him/her instead of passing them over for another McCain/Dole/loser.
I think we both agree that barring Obama having an epiphany and suddenly becoming a centrist free market guy the economy ain't getting better. So it is only a question of how bad it gets and will there be enough MSM types still working at places still in business to blow a smokescreen for his sorry ass to hide behind.
Re:Not a tax scam (Score:2, Insightful)
I know those people, too. However I don't think, opinions of former Nazi collaborators and CIA-funded saboteurs count for much.
After moving to US I occasionally try to imagine what kind of person I would become if I was born here instead of USSR, and raised by your society. Those are the most terrifying thoughts I ever had.
Re:Not a tax scam (Score:2, Insightful)
3. Anyone who can earn the endorsement of multiple known Communists (Ayers, Wright, Soros, etc) is almost certainly a Communist. It's just how they roll. And beginning one's political career with a fundraiser thrown in the home of a admitted violent revolutionary Communist is designed to send a signal to other fellow travellers. Add in the other factors and it would be foolish to extend Mr. Obama the benefit of the doubt.
You're an idiot.
So, by your logic, since Republicans are endorsed by several KKK grand dragons, they must all be racists?
Throwing poo at a politician to see what sticks is a lousy way of having an argument. If you don't like the idea of people who earn more paying a larger proportion of their social duty to support the common infrastructure, go dress up like an idiot and go to a tea party, or better yet, go to another country which better suits your ideology. No one's begging you to stay.
Re:Not a tax scam (Score:5, Insightful)
But... they won't want.
They won't move for reasons I haven't seen mentioned yet. They tend to like things like reliable infrastructures, relatively fair legal systems, etc. And the most important thing of all - the protection of the United States and its military. When country X decides to nationalize their factories and imprison their executives, I'm guessing that knowing the Cayman Islands stands ready to retaliate will be small comfort.
Re:Not a tax scam (Score:4, Insightful)
Sorry, I forgot and didn't get around to replying to the rest of your post.....
> I think you consider the unions a bugaboo.
Yup. But only under certain conditions. The rise of organized labor was a reaction to real problems, too bad it happened right in time to be almost totally captured by International Communism with organized crime picking up the scraps.
My major objection comes when the government gets involved and grants the union a monopoly on labor once a site votes in the union. Can't see how that isn't an uncompensated taking. Reducing management's decision to pay up or close the worksite seems unfair. Yes workers have the right to all walk out of a job they think is treating them unfairly. But management should have the right to let em go if they think the expense of recruiting and training a whole new labor force is less expensive than the union's demands. Yes management might be wrong in that calculation. But the union could also have been wrong in evaluating the worth of it's labor. Both sides should have the right to be wrong because it is the most basic liberty all others depend upon.
And yes, while I think the UAW with their insane work rules, gold plated pensions and such were major contributing factors management stupidity should not be ignored. Which is why they should have been allowed to go bankrupt and let the assets be bought up by people who would hopefully put those assets to more productive uses. Thus both labor, management and the shareholders would have lost and the important economic signal that would have sent would have been a good thing.
> The smaller cars that were produced by Honda and Toyota faced labor costs very close to that of American car companies.
That is simply wrong. Show me one auto bearing a foreign name badge built in a union state at union wages? Yes those folks working in the southern US make pretty good wages but it often less than half of the total compensation the unionized plants pay. Remember that the final blow to Detroit was the accumulated pensions owned to the unions on the automakers balance sheets.
Re:Not a tax scam (Score:4, Insightful)
Well, if you're moderately well off, you can farm out your taxes to a tax accountant who is more familiar with tax law, leaving you to pursue what you're really good at. Division of labour in the fine industrial tradition. However sometimes those accountants get excessively creative in finding "loopholes" that don't exist because by doing so they can claim to have saved you lots of money and ensure your continued use of their services. At least, until you get audited. Sometimes that creativity is knowingly encouraged by the customer, and sometimes it's the accountant that takes advantage of a clueless customer.
For instance, I know of a small business owner who owed thousands of dollars in sales taxes because the accountant had failed to account for them properly and pay them. Had the accountant properly reported the business' profit position, including the sales tax, the business owner would have closed up shop earlier, losing the accountant his job. Proving intent on the part of the accountant in a court of law would have been too iffy to make it worth risking additional money on lawyers, so the business owner was on the hook for the unpaid taxes.
It's like any of those "if it seems too good to be true, it probably isn't true" deals, but it's hard for people to know if it really is too good to be true, or else they wouldn't have hired a (tax) accountant for their expertise.
Re:Not a tax scam (Score:5, Insightful)
After looking at my girlfriends taxes who got divorced during early 2008, bought a house, has itemized business expenses and has an extra property, I thought "no freaking way i'm doing those taxes". I tried to figure out eligibility for extra child tax credits but we gave up and ended up giving it to a tax accountant.
If anything can be gleamed from this very long thread, it should be that taxes overall are too fucking complicated. Everyone thinks they should get a handout and politicians were more than happy to oblige, giving us this conglomerate of shit we call the IRS code.
Re:Not a tax scam (Score:5, Insightful)
What's your definition of "high"? If you say 35% is high, then there's a massive difference between the two.
Re:Corporations (Score:3, Insightful)
Why? It is really really easy. My basic needs are taken care of with about 1/5th of my salary. What I choose to indulge in beyond that is, of course, due to my own labor but it is also due to the labors of others and the society as a whole.
So not only can i afford to pay more--I should pay more and at a greater rate. To me that is the clearly moral stance and the only one that makes sense. I could have a whole different argument about WHAT the government should spend money on but not that i should pay proportionally more to fund it than a kid making 15K a year. Is there a rate that is TOO high? Of course there is but i think going back to the rates that existed under Clinton will be fine.
Re:Nowhere near the same (Score:5, Insightful)
Re:Not a tax scam (Score:3, Insightful)
Well, if the goal is to get more businesses to come to the US, and build and create jobs, why don't we go the complete opposite. How about almost no, or VERY little corporate taxes, with breaks and incentives to employ US citizens.
That would bring in companies in droves to the US.
Re:Not a tax scam (Score:3, Insightful)
Remember the motto "No taxation without representation!"?? That is what the revolution was largely over.
I do not get enough representation by government to justify their taking of what amounts today to probably 50% or more, when all is said and done. (Sales taxes, excise taxes, Social Security, income taxes, etc. -- and don't try to tell me that Social Security is not a tax. Even the government calls it that.)
Re:Corporations (Score:3, Insightful)
What the HELL does paying taxes have to do with morality?!?!
Are you saying the US was immoral before we had an income tax? Before employment taxes were immoral?
I see nothing moral or immoral about funding the govt to do its duty...which if you went by constitutional manadate, is one HELL of a lot less than they are doing now.
But, it has nothing to do with morality.
Re:Not a tax scam (Score:4, Insightful)
> In a nation that can afford to have multiple multi-billion, there is NO EXCUSE for anyone lacking basic food, shelter, and clothing.
I'd agree with that notion. In a country with this much opportunity there is NO EXCUSE for some idiot to waste their lives in squalor.
Ok, more seriously, you have a point. But lets examine our differing proposals to help lift up the poor. I will assume from your writing, that you are a standard issue Social Democrat/Liberal/Progressive who believes in the progressive income tax, income redistribution and the entitlement based welfare state as the means to solve poverty. And your side has been working hard at it since the New Deal, then the Great Society, the War on Poverty and so on. Just when are we skeptics entitled to ask for an accounting for your efforts? Because any fool can see that it ain't working yet and appears to be making most of our societal problems worse. But it does make liberals feel better about themselves, proving how they are so enlightened and care so much more than the poor selfish conservatives.
Then we have my team's proposed solution. We assert that the State, being built on force, can't do charity and that when it tries it causes more problems than it solves; it creates dependency and a sense of entitlement and that history has borne out these beliefs. That private charity has none of those defects and history has proven it to be effective and that furthermore if government could be scaled back private charity could and would step in and do a far more effective job.
Government charity always fails because it is flawed from the start. When the government takes the product of your labor and gives it to someone it deems more in need of it, the government pinhead gains zero Karma for gifting someone else's resources, seeing as it required no sacrifice on his part. You had no choice in the decision so you gain zero Karma. The recepient quickly gets the notion that it as his birthright to be a ward of the state and thus does not see a need to improve, and thus gains zero Karma. When you give to charity (or better directly help someone in your community in need) you DO gain Karma. And people accepting charity usually understand it isn't going to keep coming forever and thus has incentive to make the most of the offers of assistance beyond just immediate cash, thus becoming a self supporting member of the community and thereby gaining Karma.
And then we get the more fundamental problems in your philosophy. Liberalism is based on the notion that the average citizen is too much of a cold bastard to help his fellow man, so you more enlightened sorts must step in and force everyone to do it. Of course if everyone really WERE the bastards you thing we are Democrats would only be able to get elected by becoming lying bastards to fool the cold bastards into voting for em.... at least until you could get 50% of the population addicted to government handouts. So doesn't that mean that your philosophy is based on destroying rule By The People and replacing it with Rule by an Enlightened Elite? And that leads to the bigger question, if average humanity is really the scum you guys believe why are ya so hellbent on 'taking care' of us? Are we just pets or something? Oh sorry, isn't that pretty much the story of the Democrat party in the 20th Century?
So I guess the question I'd put to you is which is more important to you, clinging to failed theories or helping the poor. Dare to BELIEVE in your fellow man.
It's easy: it taxes being "American" (Score:1, Insightful)
If you're an American abroad, you're taxed for having a US passport (a reason why I have heard quite a few peopel changing nationality). All Obama is doing is making this a "feature" of being a US company as well (OK, a bit simplified but this is what it appears to boil down to).
Joking aside, it's not an easy problem to solve. If you look at what profits MS has made over the years and how much tax it has paid you do start to ask questions. And it's not just MS.
You phrase "taxs world income" also is correct in another way. Current US external debt appears to exceed the value of the bailouts. In other words, you could say that the world (again) pays to fix the US..
Re:Corporations (Score:5, Insightful)
Here is the problem with your contrived statement. And yes, It's almost identical to one made by Warren Buffet a few years back and parroted by a couple of people who are now known to be tax cheats (as if raising the taxes would effect someone cheating and not paying).
Anyways, here is the problem. You keep using the word I. In everything you say, it's all about you. So why are you trying to impose this idea of yours into others? If you don't pay enough taxes and that's your honest believe (Mr. Kennedy who failed to report stock transactions that he actually reported to the senate ethics comity and Reinold who failed to report rental income for more then 10 years and both have parroted the same statement to some extent) there is a process where you can donate more then what your allowed. In fact, everyone who claimed they can or should pay more taxes fail to pay more then they have to and most of them have structured their income to the point that most of their tax obligation is negated or they just cheat and don't report the income.
So why is that, you and many others want to tag onto this line about needing to pay more but when the ability is and always has been there, you fail to do so. And when you and others do your taxes, why is it that you always attempt to take as many deductions as possible? Your entire statement was about how you feel, and how you do whatever but it's nothing more then lip service. You posted AC so no one who knows you will chime in with the truth of you making 35k a year with a wife and 2 kids and don't even pay a 10% effective tax rate.
Re:Not a tax scam (Score:5, Insightful)
Man that pisses me off. The whole 'dependent' thing.
The whole point is that it's an *entitlement*. I'm not asking anyone for a handout and praying they're in a good mood in my time of need. It's OWED to me. As in MINE. That's the important part. That I don't have to ASK.
As someone that came out of foster care with no relatives I know first hand what it's like to have _no_ safety net. And I've been laid off a few times, in fairly quick succession. That means I know what it's like to sleep outside, or in the back of a car.
I pay taxes on every penny I make. If an hour of my labor is worth $20 and I trade that hour for $20 I pay as if I had gained $20 _income_ and not merely broken even. Why do I have to pay? The New Deal, that's why.
The New Deal and the safety net it promised is what made it possible for the government to put that tax liability on my head. And now that it's on and fixed good, the people that used to foot 80% of the bill is now only covering 20% wants to take away that safety net -because if I wasn't lazy I wouldn't need one. That 20% is just too damn much now.
Let me tell you something. When my employer goes belly up or lays me off (to get a momentary jump in stock price so some fat cat can line his pockets) and I need help, I'm not going to any 'faith based charity' or some shit like that. I'm going to get my 'entitlement'. You know why?
Because I'm ENTITLED GOD DAMN IT. I'm sick and tired of carving out 30+% of my wages to subsidize a laundry list of corporate interests in this country, only to listen to the bastards rant on about how if I have any kind of a guarantee it'll just make me DEPENDANT. WTF. You don't know me. I once pulled a 60 hour shift and spent 25 of those hours at hard labor. Call me lazy to my face and I'll take your fucking teeth out.
Redistribution of wealth? That's my motherfucking MONEY going to subsidize the corporate fat cats pocketing BILLIONS Look it up. Get a map of 'giver' states and 'taker' states and overlay it with a political Dems vs Rep map. Holy Shit?! Welfare is what I call it.
There's a line that people just flat out shouldn't be _allowed_ to fall through. Not talking about living high, but I am talking about food, dry clothes, place to sleep *when it's needed* and ffs the knowledge that I can see a doctor when I'm sick. What you don't seem to realize is that when people have to fight day and night for those minimum needs, they feel relieved and emotionally 'take a breath' during the times when they have them. Having those things guaranteed frees people to look up, to start thinking about personal _achievements_ and not mere survival. Knowing I don't need to go to my neighbors or to some charity on my knees for a 'handout' in a crisis means dignity and respect. I earned that. If you think I'm being unreasonable or greedy, fine. Gimme my money back then.
If grubby hands are gonna be in my pocket every Friday there needs to be some RECIPROCITY.
Re:Not a tax scam (Score:5, Insightful)
Well "gee" who knew that there's hundreds of thousands of American employees working, eating and living in the cayman islands.
Must be getting crowded with 18000+ US corps multiplied by hundreds of employees each.
Or not.
Kinda the point of the article...they *don't* live there. The corp shifts its paperwork out of the nice cushy western country where all the executive live to some pathetic third world country, but still maintains 100% of its physical presence *in* the nice cushy western country. If your business is 100% physically in the country, hiding behind the government, using the infrastructure and courts and mooching off the public resources that allow you to operate that have been paid for by OTHER MORE UPSTANDING BUSINESSES without paying your share for all those things then your a parasite and deserve everything you get from people who pay their share!
They're nothing but parasites and not long ago such unpatriotic behavior was scorned publicly by both sides of the aisle.
Now the western world has the lick-spittle, power worshipers who enable them...
Re:Where is the crossing line for lowering tax rat (Score:3, Insightful)
How is it we've totally forgotten that? Everything I see gov't doing now is about "maximizing revenue", as if we're all cows to be milked rather than citizens.
Maybe if they didn't maximize spending, they wouldn't need so much revenue, ya think??
Re:Not a tax scam (Score:5, Insightful)
While I'd actually be in favor of that outcome, I don't think it would necessarily happen. Corporations don't actually pay taxes...they just pass the cost onto the consumer.
If they cut the corporate taxes...they come in, create more business, and employ more people who then pay more taxes, and govt. gets more revenue. More growth means more revenue, even from less tax venues...
Re:Not a tax scam (Score:3, Insightful)
The Cayman Islands is hardly a third-world country. It's a British overseas territory: "According to the CIA World Factbook, the Cayman Islands GDP per capita is the 12th highest in the world."
Britain has a lot of overseas territory tax havens, some a long way from Britain (Cayman Islands, Bermuda, etc) and some surrounding it (Isle of Man, Jersey, Guernsey). There are well-paying jobs on all of them supporting the off-shore HQ industry -- the Caribbean is a nice place to live, and if you don't mind not being in a large city, Jersey etc are too (it's not very far to fly to London or Paris).
Re:Not a tax scam (Score:4, Insightful)
Really wish I could mod you up. The US isn't alone in this kind of crap. Experts in any field that is slightly complex or has a grey area will lie outright or just guess if in doubt on occasion in order to stay in business.
Re:Not a tax scam (Score:4, Insightful)
I don't think you understand the ability of a political partisan to make excuses for the failings of the home team while condemning the opposition for doing the exact same thing......
Re:Not a tax scam (Score:3, Insightful)
Thank you. Well said.
I had a bit of an epiphany back in the 80's. A right-winger co-worker was ranting about "wealth redistribution" right as the savings and loan scandal was happening, and Resolution Trust was being set up to clean up the mess. The likes of Neal Bush, et al got away scott-free, and my tax dollars were backfilling the people who had gotten scammed. So effectively my tax dollars were "redistributed" to the scammers. Then go read a little on the good old "military-industrial complex" which dominates the DOD budget and the current banking bailout, and realize that there is and has been a heck of a lot of "uphill wealth redistribution" going on.
When I see pleas for the poor, I keep hearing about how much can be done with so little, and I don't begrudge it. The pleas of the wealthy are far more expensive.
Re:Not a tax scam (Score:4, Insightful)
The whole point is that it's an *entitlement*. I'm not asking anyone for a handout and praying they're in a good mood in my time of need. It's OWED to me. As in MINE. That's the important part. That I don't have to ASK. [...]
I pay taxes on every penny I make. If an hour of my labor is worth $20 and I trade that hour for $20 I pay as if I had gained $20 _income_ and not merely broken even. Why do I have to pay? The New Deal, that's why.
People who are against welfare aren't talking about people like you. Very few people want a complete absence of a safety net. Unemployment assistance, temporary housing assistance, education assistance, food stamps, whatever. That stuff costs hardly anything anyway.
Get a map of 'giver' states and 'taker' states and overlay it with a political Dems vs Rep map. Holy Shit?! Welfare is what I call it.
Those maps seem a little misleading to me. It counts overall federal spending, not welfare. North Carolina has several large military bases which run off of federal spending. Is that welfare? Also note how the colors are tied more to population density than anything else. Somehow interstate highways connecting California to the East cost are considered welfare for the states in between.
The other thing is it doesn't break it down further than the state level. California is a "giver" state, but what if you break it down to a city or county level? I've heard that the rural areas of California are very wealthy and tend to vote Republican (if you've seen the county voting map of the country rather than the state-level map, you know what I'm talking about). Maybe they make California a net giver? I don't know, I just feel like things are kept deliberately misleading to help a certain agenda.
I'm sick and tired of carving out 30+% of my wages to subsidize a laundry list of corporate interests in this country, only to listen to the bastards rant on about how if I have any kind of a guarantee it'll just make me DEPENDANT.
Out of curiosity, do you have any figures for how much money goes to corporate interests? Do you do stuff like count 100% of military spending as a corporate subsidy since the military protects them? (I've seen that plenty of times, particularly in the "true cost" of oil.) What's certain is that if you're paying a 30% tax rate overall, then over 1/3 of your taxes are going to Social Security. I'd be surprised if corporate interests get a similar share.
What 200 companies? (Score:3, Insightful)
Re:Corporations (Score:3, Insightful)
First of all, I don't think "contrived" means what you think it means. Saying that rich people should pay more taxes than poor people is a valid opinion, just one you don't seem to agree with.
Next, why bother bringing up a couple of people who claimed to believe similarly to the AC but didn't? Would you say murder is okay because until they got caught the Boston Strangler and John Wayne Gacy said murder was wrong? The philosophy isn't tainted just because someone tried to use it as camouflage for their activities.
That's just silly. You can support higher taxes without taking it upon yourself to simply pay more than is required. One person paying a few thousand extra is not going to make a difference in the grand scheme of things. It just doesn't scale that way. The AC would be an idiot to simply pay more while nobody else does. As far as the AC "imposing" his view on others, he's not. He's sharing his view. If enough people agree with that view, it gets adopted as a general rule for everyone. This is part of living in a society. If that system doesn't work for you, I would suggest you may like Somalia. They don't have one of those evil government things there, they all get to do whatever they like. Personally, I don't think that sounds all that great, but that's just me.
Citation needed. Good luck being able to prove "everyone", or even "most" do this. Some do, some don't.
What's wrong with legitimate deductions? They exist for a reason. Again, you can support a higher tax rate while taking deductions without a conflict. Abuse of deductions are an entirely different story, but since you have no proof that the AC has done this, it's irrelevant. By the way, someone with a very high income can take quite a few deductions and still pay more in taxes than the average person makes in a year. This isn't an either-or issue.
Or he's a middle-manager making a low six-figures, or Warren Buffet, or even Jimmy Buffet. Even if he did post under his regular name, it probably wouldn't have made a difference. I have no idea what you make, even though you didn't post AC.
Re:Not a tax scam (Score:2, Insightful)
Re:I block the Politics section for a reason (Score:1, Insightful)
As of right now this story has well over 1000 comments and is the most popular story on the front page.
Someone thought this story was interesting/important enough to put on the front page and, lo and behold, it looks like they're right.
Don't hate because online disagreements make you squeamish.
Re:Not a tax scam (Score:4, Insightful)
Re:Nowhere near the same (Score:3, Insightful)
Dude, not the same thing. Most people would pay their taxes properly if the tax code weren't a jumbled fscking mess and we could actually understand HOW to pay our taxes properly. Make collection of said state sales taxes straightforward and easy AND I WILL PAY IT.
Re:Wont increase taxes on middle class (Score:3, Insightful)
Well, it is quite relevant. It demonstrates a fundamental difference between two lines of reasoning that you purport to be identical in effect.
They are identical. Or how does the cost passthrough argument differ?
A consumer has little recourse if the price of a good is increased to cover a greater tax burden other than to chose to not purchase it. If it is an essential good (food), he or she does not even have that choice.
The working consumer has a much harder time to compensate by demanding an increase in wages.
The burden of an increase in corporate taxes therefore, immediately falls on the consumer, and only later on the corporation as this translates into a demand for higher wages. There is a multiplier effect, but since wage increases lag corporate tax increases (if they materialize at all), it is the consumer who suffers. The corporation, which is legally obligated to the interests if it's shareholders will do all it can before it reduces dividends. Capital valuation might fall which will impact shareholders, but all shareholders, many of which are again, consumers who invest via mutual funds in their retirement accounts.
Why should they pay anything?
Because it's the law?
Wrong answer. The law currently makes the type of tax avoidance you bemoan quite legal. You would make a currently legal practice illegal with nothing to show for it except primarily increased costs to those at the bottom of the income chain and little effect on "the rich".
When I purchase something, and money changes hands across the counter by the cash register, the rate of "money transfer tax" is 0%. Oh, the horror!.
Sales tax here is about 8-9%
I'm not talking about the sales tax. I'm talking about a new tax, like the one you are all salivating over, on the mere transfer of money. A corporation (hopefully) earns profits which are either reinvested, or distributed as wages and dividends. Those are taxed. You seek to tax them a second time within the corporate veil.
More to the point: Why should income earned abroad be taxed locally when none of the services it supposedly funds are available in the jurisdiction where the income was earned?
Which income is that? Why should a company be able to radically change their tax obligation by moving their paper HQ to bermuda? You should pay taxes on operations in a country
Because (a) they legally can, (b) to tax them at all is taxing earnings twice: in the hands of the corporation, and in the hands of it's employees and shareholders.
One can argue that earnings should be subject to some total aggregate rate of tax, and levy it at various points, instead of all at the same point (earnings). But that is not an argument that every individual rate of tax (personal, dividend, or corporate) should be the same.
Corporate tax rates are historically low to encourage capital investment to create firms where people can be employed. Offshore income that hasn't been repatriated isn't taxed because it (a) isn't practical, and (b)harms the corporation's ability to operate effectively in a global market.
Finally, where do you get the idea that something "should" be taxed in the first place? Because the poor deserve a subsidy simply for existing?
But, if they take bigger profits, they are taxed more personally. This is the point you do not seem to get. The revenue is taxed more than once.
I do get it - revenue is not taxed - profits are. Salary comes out of profit, so no it isn't.
No. Taxes are paid out of revenues, as are salaries, other operating expenses, and net profits. Read an income statement and balance sheet sometime. Taxes are levied on gross profits, but are paid out of revenue (or reserves, but a well-r