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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."
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Battle Lines Being Drawn As Obama Plans To Curb Tax Avoidance

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  • by azgard ( 461476 ) on Monday May 04, 2009 @05:44PM (#27821883)

    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.

  • by Anonymous Coward on Monday May 04, 2009 @05:52PM (#27822031)

    In addition to pulling out of at least one of the wars and never making such a dumbass mistake again:

    1. Tax revenues correlate with economic growth, not tax rates. This is reality despite your desire to believe in it or not.

    2. Lower tax rates spur economic growth. This is reality despite your desire to believe in it or not.

    Will you taxation groupies please do the fucking math one of these days? Please???? Just step outside your little reality distortion bubble for five fucking minutes?

  • by Austerity Empowers ( 669817 ) on Monday May 04, 2009 @05:54PM (#27822055)

    And depending on which iteration of the article you have read, that's kind of what everyone is predicting. We'll lower corporate tax while closing loopholes. It's regrettable that this will be necessary, but we've spent 7 years funding multi-nationals in setting up operations outside the US, so they can create some amount of trouble, it's just not optimial for either the US or them.

    On the other hand, we will at least regain some control over what is outsourced. Right now "if it doesn't need to be done here, ship it". This is leaving companies full of redundant white collar middle management, with no real skills or intellectual output. If we make some changes we can theoretically retain some of the R&D work we want to keep here, and by proxy, some of the MFG/"know how" and infrastructure required to do that.

    I am curious who MS's competitor is that they'd me "disadvantaged" to. The same goes for pretty much all of them, I know who my company's major competitors are, and I know they're US based and off-shoring because of each other. I am not aware of any purely foreign based company that is even on our our top 10 competitive threats. In fact 99% of the market is divided into 3 major competitors, all US based.

  • by jav1231 ( 539129 ) on Monday May 04, 2009 @05:58PM (#27822119)
    "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?"

    If the money isn't earned here then tax shouldn't be paid here. Also, people who have their money taxed at earning and want to store it overseas to avoid inheritance taxes and capitol gains I frankly applaud.

    Right now Obama had damn well better figure out how to incentivise corporations. He seems to think the government can simply hire those out of work and this is just not the case.
  • Re:Am I cynical? (Score:2, Interesting)

    by JAlexoi ( 1085785 ) on Monday May 04, 2009 @06:01PM (#27822179) Homepage

    Am I cynical to think that these businesses will just raise the cost of their goods to cover the additional tax, thus making consumers the ones to pick up this $210 billion tab? I somehow doubt that publicly traded companies are excited to see the earnings hit show up in their quarterly statements.

    Well as the major investors in your own companies, maybe you should stop demanding them to increase those quarter-to-quarter profits and think just a little about the long term?
    You bitch about the bosses that do everything to increase quarterly profits, however when going back home you are the root of that evil.
    Since you as an investor evaluate these CEO's and management by exactly the same standards. And then penalize others for not performing the thing that you bitch about - doing everything to increase quarterly profits!

  • *WOOSH* (Score:5, Interesting)

    by MBCook ( 132727 ) <> on Monday May 04, 2009 @06:01PM (#27822185) Homepage

    Congratulations on missing the point congress. (surprise)

    Forbes had a great piece on this a few months ago. People aren't going to Ireland / the Caymans because they don't want to pay taxes and just want to cheat... the cost of compliance is too high.

    One of the good things Regan was supposed to have done was get lots of tax money back to the US by simplifying our tax code. Even though they may have brought their money back from countries with lower tax burdens, it was easier to have it in the US.

    There is an opportunity cost to moving your money to another country or using a tax shelter (legal or not). People judge it worth it because of what they have to go through.

    If you simply simplify the tax code so it's not so hard to deal with, people will come back. Things have only gotten worse recently with SarbOx. Closing loopholes is trying to tie the arms of suicidal people to beds. It works much better to try to get them to stop being suicidal.

    There will always be people who try to cheat the system because they are immoral jerks. But if it doesn't take wealthy people a team of 30 tax attorneys to keep their wealth in line, they're more likely to keep it in the US and avoid the hassle of all the international laws (and spending 183 days of the year out of the country, and blah blah blah). No tax breaks for pork farmers on 17-35 acres in areas that don't observe daylight savings time unless they grow at least 3% barley ethanol using sustainable methods.

    The problem is complexity in the tax code, not tax shelters.

    Example [] way to fix things.

  • by rho ( 6063 ) on Monday May 04, 2009 @06:05PM (#27822239) Homepage Journal

    Roads and firefighters are okay.

    Paying farmers to not grow crops, paying millions of people to hassle you with irrelevant paperwork, and then paying them again when they retire at 45 (and for the next 35 years)--not so okay.

  • by maxume ( 22995 ) on Monday May 04, 2009 @06:06PM (#27822257)

    Is there some compelling reason to tax corporate profits? How about we adjust the personal income taxes on dividends and capital gains and just do away with corporate taxes altogether?

  • by pesho ( 843750 ) on Monday May 04, 2009 @06:09PM (#27822317)

    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.

    This is bogus argument. US has tax treaties with most of the rest of the world that prevent double taxation

    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.

    And where will they go exactly to find regulations and tax system that is more friendly to corporation than US? Canada? Really!?

    EU is cracking on tax heavens too and Ireland will not enjoy it's special status much longer.

  • by __aagmrb7289 ( 652113 ) on Monday May 04, 2009 @06:12PM (#27822369) Journal
    Okay, Mr. Strawman - show me one "anti-tax" argument that says there should: (1) be no taxes; (2) be wars fought by our country.
  • by Fnordulicious ( 85996 ) on Monday May 04, 2009 @06:25PM (#27822557) Homepage

    Because people die, but corporations live forever.

  • Where is the line? (Score:2, Interesting)

    by Cryogenic Specter ( 702059 ) on Monday May 04, 2009 @06:27PM (#27822623)
    There are almost 200 countries in the world. Taking this route is like a step in the direction of taxing any corporation in any country because an American owns stock in that company or because the U.S. government just plain wants to. Other countries are sovereign nations that have their own people, laws, customs and taxes. If you do not like what is in the U.S. you should leave, right? Well that is just what these corporations did. They did not like the taxes here, so they incorporated elsewhere.

    Corporations are treated like their own legal entities. If you want them in the U.S., then the U.S. needs to be attractive.

    Cities have often times given special tax breaks to large companies in order to get a plant or whatever built in their city (Why do you think Dell is in Round Rock, TX instead of Austin?). The feds should do the same.

    This is almost like saying that if I were to give up my U.S. citizenship and become a citizen somewhere else, then the U.S. should be able to come after me and tax me if I do any business with Americans.

    Get a grip!
  • by rolfwind ( 528248 ) on Monday May 04, 2009 @06:42PM (#27822881)

    Inherent in that argument is that maximizing revenue is desirable for the government. Perhaps that is true in a time of war, but government is not a business, minimization, not maximization should be it's goal imo.

  • Re:Not a tax scam (Score:2, Interesting)

    by Red Flayer ( 890720 ) on Monday May 04, 2009 @06:44PM (#27822911) Journal

    When the workers are running around seizing the means of production smart people start looking to get out while they can.

    Still running scared of the Red Menace, I see.

    How about a new slogan for the times?


    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.

  • by leoc ( 4746 ) on Monday May 04, 2009 @07:00PM (#27823157) Homepage

    I am in favour of completely eliminating ALL taxes on corporations so long as they are NOT considered a "person" under the law. So long as they are, then they should be subject to taxation, just as any other person is.

  • by spun ( 1352 ) <> on Monday May 04, 2009 @07:04PM (#27823219) Journal

    Most economists agree, 60% maximum tax rate is the high point of the Laffer curve. Even the lowest estimate puts it at 35%. Lower it any more, and the government is losing money. With all the loopholes, our effective tax rate is around 10% of GDP. The government would make more money by raising taxes, there is absolutely no doubt. Look at any recent studies, you can find dozens of them on the wiki page for 'laffer curve.'

  • by caseih ( 160668 ) on Monday May 04, 2009 @07:08PM (#27823273)

    The best solution I've ever heard to the tax problem in general is to eliminate corporate income taxes completely. Then close every last loophole in the personal income tax code. No more writing off cars as business expenses for personal use, or houses, or swimming pools. Either it's owned by the corporation or it's owned by an individual who happens to work for a corporation. If a CEO rewards himself with a new car that's paid for by the company, then he pays income taxes on that. This type of tax structure would cut down on abuses of the tax code by the very wealthy while at the same time encouraging companies to invest money back into themselves. In other words corporations would have an incentive to do something useful with their money rather, helping the national economy, rather than hiding it off-shore.

    Not only would this scheme promote businesses right here in the US, it would even out the tax disparity between the extremes of personal income levels.

    Sadly it will never happen. Not in a million years.

  • Corporations (Score:5, Interesting)

    by Inglix the Mad ( 576601 ) on Monday May 04, 2009 @07:25PM (#27823511)
    Corporations can pay taxes too. All I can say is "hello transactional tax" and hopefully (but not likely) goodbye to many other taxes. You can't dodge a transactional tax unless you cease doing business in a country. Considering this would ruin most companies, not having transactions in the US, it would remove any incentive to move headquarters overseas. In actuality every country is slowly going to move towards a transactional tax anyway to stop the, shall we say less than positive intimations (read: Blackmail), companies try to pull now. The funny thing is while the US has a higher tax rate, it has a lower collected rate than most countries.

    The plus here is that corporations are the ones that are going to f*ck themselves over. You see they need, and I mean NEED, the government. Yes, the same ebil gubbermint they complain about. China isn't exactly a haven for Intellectual Property (i.e. rampant theft), other countries can't project power to defend the corporations various holdings, other countries lack the legal mechanisms for corporate defense, et al. That's why corporations raise the hew and cry often, but do very little but lobby.

    The right keeps using the words "Socialist", "Marxist", and "Fascist" to describe Obama. Those words do not mean what they mean think they mean. I mean, really, Obama is a _______ (fill in the blank)? Obviously the right has ZERO idea of how center-right Obama really is. Heck, in any "Socialist" country, Obama would be seen as a right-winger. Fascist? Yeah, right, let me know what the previous President's wonderful record on the Bill of Rights was, in particular the 4th amendment. Marxist? Puh-lease, let me know when Obama pulls a Reagan and sends troops in somewhere over a labor dispute.

    Just goes to show you what a lack of perspective nets people.

    End all tax "credits" and "exemptions" (including EITC and Mortgage tax credits) and government handouts to corporations. After 5 years of paying off debt, lower the marginal rate. Remember, no exemptions at all. This would sting at first, in fact it would have to be phased in, but then the country would have a tax system that is as "fair" as taxes can be.
  • Re:Not a tax scam (Score:5, Interesting)

    by Cajun Hell ( 725246 ) on Monday May 04, 2009 @07:28PM (#27823557) Homepage Journal

    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.

    Oddities are still a symptom of fuckedupness, though. If you and I don't have the loopholes (we have to pay taxes that, say, Proctor and Gamble doesn't have to), then we are losing.

    Either repeal the taxes or enforce them uniformly without loopholes. If one business gets the loophole by being technically in the Cayman Islands and another business doesn't, then that second business is being punished for not doing absurd things like technically moving their HQ to Cayman Islands.

    Loopholes are just special interests crying for a subsidy. They should have lobbied for lower taxes for everyone, instead of obscure exceptions. Then their whining about taxes would have some legitimacy. Right now, they sound about as legitimate as bankers.

  • by Areyoukiddingme ( 1289470 ) on Monday May 04, 2009 @07:46PM (#27823875)

    Because manifestly the 'captains of industry' are fucking up on the job and managing companies into the ground. Therefore they are considerably worse at spending that money than the government. Congress is a tiny bit accountable, still. The CEOs of AIG and GM are not accountable, period.

    In any case, this is a red herring. We don't want tax revenues to be as high as possible. We want the goddamn budget to fucking balance, thank you. Unless you're planning on eliminating Social Security and Medicare, raise taxes or sit down and shut up.

    (Not yelling at you. Yelling at a Republican fantasy that spending fiat money that doesn't exist has no repercussions.)

  • Re:Uhhhh.... (Score:3, Interesting)

    by Red Flayer ( 890720 ) on Monday May 04, 2009 @07:53PM (#27823961) Journal
    What do you mean, everyone else? What does that have to do with that I wrote, and with what he or she chose to infer?

    I tend to choose my words carefully, especially so for serious topics. If that poster chose to read what they wanted to see, that is their problem, and the mark of someone who uses a written communication channel poorly. They deserved to be dressed down.

    Furthermore, in the thread in question, what was being discussed initially was the workers seizing the control of production. Since when is the government synonymous with the workers? If there were to be any error in comprehension on that poster's part, it should have been by assuming I meant "seizing by force" as another poster did.

    Seriously. This is one of the reasons it's hard to have a serious discussion on slashdot -- because people don't read well.
  • by dunkelfalke ( 91624 ) on Monday May 04, 2009 @07:54PM (#27823989)

    Actually, wrong. It would lead to more jobs. Why? Let me explain.
    Only large companies can afford large scale tax evasion. Because of that smaller local companies cannot compete with large companies (they cannot evade taxes) and go out of business. If large companies cannot evade taxes, smaller local companies suddenly become more competitive and that will actually create jobs.

    Small and medium sized businesses are pretty much the backbone of the economy and provide most jobs by percentage, so rising their competitiveness is a very good idea.

  • by AK Marc ( 707885 ) on Monday May 04, 2009 @08:00PM (#27824075)
    Oh? Go look at the revenue figures, they disagree. Every time tax rates get cut revenue rises. Every time,

    Where are the figures? Lets compare every year and whether there were cuts and what the revenue did. And comparing just cuts to the previous years doesn't work, we also have to compare increases. Where is a place where the tax percent change and change in revenue is correlated in a nice spreadsheet for every year we have numbers? I'd love to look at the numbers, but they aren't presented in ways that are easy to read. So please, lets look at them. Where did you look at them before you posted this assertion? I would love to see for myself.
  • by maxume ( 22995 ) on Monday May 04, 2009 @08:10PM (#27824227)

    Do those taxes need to be levied on the corporation, or can they simply be levied on the owners of the corporation?

    Successful investment is going to tend to make the corporation worth more, so it seems like taxing the owners would be perfectly workable.

  • by AK Marc ( 707885 ) on Monday May 04, 2009 @08:24PM (#27824397)
    Corporations do not pay taxes, at all!

    Corporations write checks to the government. Try arguing from a point of fact, not a point of wishful thinking. Corporations write checks to the government with "tax payment" in the memo field.

    No matter what they call it, the money always comes out of the same pocket: the individual American taxpayer.

    Nope. A dollar that never made it in my pocket never was removed. Profit not gained is not the same as profit lost. And corporations are always claiming to be people when it helps them. So why not tax them as a person? There's no difference between me and my neighbor trading goods and services and a corporation and me doing it, but yet when a corporation does it you scream how they should be tax-free because it comes out of my pocket anyway. Sounds like you are a tax-hater using logic (or illogic) to justify your personal opinions, rather than taking a look at the situation impartially. Why do you care if the taxes are paid out of different pockets anyway? Is it because you want the one "tax" number on the federal return to be high so you can make others mad about it? If so, go whine somewhere else. This is about corporate taxes, not that you think taxes are theft. Higher corporate taxes lower the individual tax burden.
  • Re:Not a tax scam (Score:3, Interesting)

    by Alan R Light ( 1277886 ) on Monday May 04, 2009 @08:55PM (#27824695)

    These multinationals do pay substantial amounts of tax, on their American operations. Obama wants to increase the tax they pay on their operations outside the U.S.

    Of course, these companies pay taxes on their foreign operations in the foreign jurisdictions, so this amounts to double taxation on their profits. No wonder they try to reduce what they owe by legally changing their headquarters to a nation like Bermuda that does not tax them twice.

    Of course, a U.S. investor in a U.S. multinational ends up getting taxed three times for the same profits, so no wonder that U.S. citizens are leaving too - and they tend to be in the same 5% that pays 80% of U.S. taxes.

    The United States government is attempting to commit suicide, and eventually they will succeed.

  • by nhtshot ( 198470 ) on Monday May 04, 2009 @09:13PM (#27824887) Homepage

    Can you people possibly be this naive?

    Funny, I was going to ask you the same question.

    You act like corporations have no profit margins at all. As if every dollar they spend goes directly to labor and expenses.

    It's quite simple. Profits from a corporation become the property of the shareholders. Either as retained earnings or dividends. Now, dividends are taxed at a flat 15%. Compare that to what you pay in taxes. If you owned the company, and could receive your pay in dividends, your total tax bill would be 15%.

    The other option is to leave the money in the business as retained earnings or to spend it on assets. Want a new 20M aircraft? Instead of taking the money yourself and paying taxes on it before buying the plane, let the company buy the plane and book it as an asset. They get to depreciate it (150% right now thanks to bonus depreciation on aircraft) and not pay any tax on the money used to purchase it. (Simplification, but you get the general idea)

    Corporate income tax exists as some kind of a counterbalance to this sort of behavior. It's intended to discourage principals from leaving most of what is really their profits in the company to avoid paying income tax on them. Now if the company is retaining earnings for a legitimate business purpose (saving for assets, rainy day, etc..) then they'll get the taxes back when they actually spend that money. (If they spend a lot, they can even back claim a net operating loss and get back money from previous years)

    At the end of the day, this is all about making them accountable for the money they should pay tax on.

    It also has NOTHING to do with employees or their ability to hire more. Employees are an expense. Money spent on employees is deductible. If anything, hiring more people would be a good way to AVOID paying the additional tax.

    Again, for those of you that are really dense, or have drunk a lot of red koolaid:


    Don't let the pundits convince you that it's going to reduce employment. What it will do is force the super-high income bracket that derives most of their income from dividends to pay their fair share.

    My effective tax rate was 38% last year, since my company doesn't make enough to pay me mostly through dividends. Most of my customers effective tax rates were less then 20%. On twice or more income, they pay about 5% total tax more then I did.

    The usual slashdot meme is RTFA. In this case, read a fscking accounting book, or the 1041 instructions before you start spouting off about corporate income tax and what it does.

  • by Anonymous Coward on Monday May 04, 2009 @09:30PM (#27825055)

    Corporate taxes tax profit not revenue.

    If the companies spend money on employing people it's a deductible expense they do not pay tax on.

    Company will to tempted to spend in order to keep their tax burden low instead of having profits that flow into savings accounts of the investors in the form of dividends.

  • Re:Corporations (Score:2, Interesting)

    by RunsWithMatches ( 1352655 ) on Monday May 04, 2009 @09:35PM (#27825105)
    If you think Obama is center right then perhaps you are viewing his policies from a far left perspective. As to your other point on eliminating income tax deductions and credits, that would be a good start, but it still falls far short of basic fairness as long as the rates are progressive.
  • by rossz ( 67331 ) <`ogre' `at' `'> on Monday May 04, 2009 @10:23PM (#27825557) Homepage Journal

    It seems the Obama administration has been making a lot of noise about tax avoidance. Let's make one thing perfectly. Tax avoidance is perfectly legal. There is absolutely nothing wrong with minimizing the amount of taxes you owe. Tax evasion, however, is highly illegal. Stashing your profits in a secret off-shore bank account is tax evasion. Finding as many business write-offs as possible is tax avoidance. If a company is using legal loopholes, they have done nothing wrong. If you don't like the loopholes, change the damn law.

    I do not like this trend. The Obama administration is purposely trying to make the term "tax avoidance" unpopular. A few years from now it could be conceivable that you will avoid telling anyone that Turbo Tax Ultra-Deduction Edition saved you an extra thousand bucks through business expense deductions you didn't know about, all because you don't want your friends and associates treating you like a leper.

    IANAL, but I play one on the internet

  • Progressivism's scam (Score:3, Interesting)

    by Orne ( 144925 ) on Monday May 04, 2009 @11:13PM (#27825891) Homepage

    Here's some -isms for you...

    I fear progressive authoritarianism operating under the guise of a liberal democracy. I fear those who would tear down our current society to enforce a raw democracy, guided by the "enlightened" elite, using propaganda via the media to steer the masses, creating a perception of "have-nots" so they can hate those that don't like where the system is taking us. Those that don't follow are run over; it's not a new concept, after all, these tactics have been around since "Philip Dru: Administrator []", 1917.

    We're being steered away from the republic, because a republic represents the freedom to get away from bad decisions made by others. "Why do we need an electoral congress when we can just let the people decide?" No... we have a democracy where you only need a majority to decide that someone else should pay for what you want, a fear that the Founding Fathers [] voiced often. There's a reason why they call it a progressive tax code, such that today 90% of the public pays 30% of the federal tax []. Our "closing the loophoole" will end up chasing away the 10% that actually generates the cash for our society.

    We have the media in league with the POTUS, in 100 days reporting favorable stories in a 2:1 ratio over the last president [], yes 42% vs 20% favorably biased stories. And it's just not NBC or CNN... They steer the national conversations, and under the guise of entertainment (ComedyCentral, of Viacom, which lest we forget owned CBS up until 2006), they ridicule those that don't fall in line with their political ideology. John Stewart rips apart Cramer thanks to his NYSE executive brother [], then falls back on "I'm just an entertainer" when his beliefs are cornered...

    It's not socialism, no, because at least there they told you up front that the system was being run by the elite to forcefully equate the masses, except for those at the top of course. It's not fascism this time around either, because under fascism the corporations run the government, when today the government is itching to run the corporations [] (another $4.5 billion 1 hour ago). It's authoritarianism [], chipping away our freedoms, our options, our future. Spending money they don't have today, telling us what we can't believe, then using the 1920's progressive tactics of criticising and ridiculing the non-believers.

  • Re:Totally man! (Score:3, Interesting)

    by copponex ( 13876 ) on Tuesday May 05, 2009 @12:11AM (#27826335) Homepage

    The point is not to punish wealthy people. The point is to institute policies that lead to a more equitable society.

    But, you are right, in that people who lead lives of privilege view any move towards equality as an assault on their lifestyle.

  • Re:Not a tax scam (Score:4, Interesting)

    by tftp ( 111690 ) on Tuesday May 05, 2009 @12:17AM (#27826375) Homepage

    How about almost no, or VERY little corporate taxes, with breaks and incentives to employ US citizens

    That may be good for the country, but it will be very bad for the government. The government's power comes from the money that taxpayers give to the government. Remove that, and politicians of all sorts suddenly switch from "Irreplaceable Guardians of Treasury" to "Generic Advisers on Public Policy." Which is, actually, what they were supposed to be.

    As it stands, the big government can only demand more money at each turn of the wheel; since this chokes the economy, higher taxes are required, which of course further choke the economy, and so on. Ultimately the remnants of the economy will be only sufficient to keep workers alive, with the rest of the money (not much in total anyway) being sent to the government. Oh, by the way, that's exactly how USSR operated.

  • Re:Not a tax scam (Score:5, Interesting)

    by Monsuco ( 998964 ) on Tuesday May 05, 2009 @12:30AM (#27826463) Homepage

    Anyway, what's so hard about filling out a tax form correctly? How much "careful investigation" does it take?

    Quite a bit actually. A couple years back, CNN's Money Magazine did a famous study. They took a regular family's tax information to 49 different firms. Of the 49 not one of them got the same result. According to Money's tax lawyers, all 49 were at least somewhat incorrect. Money then took it to the IRS. About half the time the IRS couldn't even give them accurate advice.

  • by StrategicIrony ( 1183007 ) on Tuesday May 05, 2009 @02:14AM (#27827173)

    The United States currently has the lowest overall tax rates in the world, by a small margin.

    However, the cost of living in the United States (even including taxes) is MUCH higher than most countries.

    For example, health care quality in Canada is generally regarded as equal to a US based HMO. You can argue all you want about specialists and whatever... I'm talking about an HMO like Kaiser.

    However, in Canada, the cost-per-person of providing that health care is barely half in Canada...

    So they have 5% higher taxes to pay for it, but are able to avoid spending 8-10% of their income to provide health care for their family.

    In addition to the lower overall costs for healthcare, they have the added benefit of universal coverage, which means that people like homeless children are also covered.

    If anyone could point out, numerically, how a privatized health care system is better, I'm interested to hear. I don't particularly care for polemic or euphemism about slavery. Almost everyone in the world pays more taxes than you do and you DO NOT want to live in countries where you would not (Zimbabwe and Somalia come to mind).

    Back when raising an army consisted of feeding and clothing a bunch of already-armed farmers, taxes could be lower, but 10% tax rates don't buy F22s, National Guard disaster relief Blackhawks and advanced CDC laboratories to isolate and analyze nationwide virus outbreaks.

  • Re:Not a tax scam (Score:3, Interesting)

    by toQDuj ( 806112 ) on Tuesday May 05, 2009 @03:07AM (#27827451) Homepage Journal

    The BBC disagrees with you there: []

    your tax code is completely unintelligible.

  • by marco.antonio.costa ( 937534 ) on Tuesday May 05, 2009 @05:52AM (#27828115)

    All these services you talk about except federal highways are paid by local, not federal taxes. So think a little deeper before having a knee-jerk favorable reaction to a government that spends 36% of people's production, overall.

    And ALL these things you said could be done better and more cheaply by the private sector. I mean, somehow plumbing only comes easy to bureaucrats?

    Taxes DO serve a purpose. They make people poorer and dependent on the government, therefore guaranteeing it's survival.

    This isn't 'mindless anti-establishment', its quite mindful Liberalism actually.

  • Re:Not a tax scam (Score:3, Interesting)

    by theolein ( 316044 ) on Tuesday May 05, 2009 @06:48AM (#27828347) Journal

    Good post. I was really getting tired of everyone on here posting crap about how people without jobs are lazy bums who don't want to work and how poor people don't deserve anything. The whole "socialist obama" crap story.

    I've been unemployed before and it isn't pleasant having to worry about whether I'll have something to eat tomorrow or not.

  • by LynnwoodRooster ( 966895 ) on Tuesday May 05, 2009 @08:46AM (#27829085) Journal
    Apparently you don't understand what tax is being deferred... Let's say I am a US company. I have a Hong Kong subsidiary (where foreign corporate income tax is zero). That HK subsidiary makes a sale of product from our Singapore operations to London, and makes a $1M profit.

    According to the current Administration, that $1M profit should be taxed inside the US at a 39.6% tax rate. A product made in Singapore, sold from HK, and delivered to London should have its profits taxed in the US because the owner is in the US. Even if the profits are never repatriated into the US (for example, I keep those profits in HK to further expand my overseas operation). And regardless of the tax I pay on that profit overseas.

    I find it astounding that people believe that is a legitimate and proper application of tax law...

  • Re:Corporations (Score:3, Interesting)

    by commodore64_love ( 1445365 ) on Tuesday May 05, 2009 @10:51AM (#27830889) Journal

    Well that's not what fascism meant in the late 1800s and early 1900s. Originally it was simply a central government that runs the economy, and yet the corporations/businesses still remain private. It was the halfway point between the U.S. free market economy and the USSR communist economy. Winston Churchill himself thought fascism might be a good idea to pursue, or at least experiment with.

    Also some have said fascism and communism are friendly. Not true. The National Socialists/fascists despised the Soviet Union, because they felt government ownership of all businesses and all land was going too far. They felt all holdings should remain private even if the government was pulling the strings.

    That's the problem with history - it's written by the victors, and the victors like to lie. So now we're forced to invent a new word "Corporatism" to describe what the word fascism originally meant.

  • by marco.antonio.costa ( 937534 ) on Tuesday May 05, 2009 @12:36PM (#27832745)

    On the other hand there are plenty of examples of how the private sector can really screw individuals, mainly because they're only concerned with making a profit.

    You talk of facts and logic. This statement is a non sequitur.

    Companies certainly are just interested in making a profit. The point is, they can only make a profit if you BUY STUFF from them. You only BUY STUFF from them if you WANT, so its in their best interests to provide what you want to get a profit.

    It is when government becomes the middleman that companies get a thug to beat up people to make them buy something. I say this because I'm sure that health care is one of the things you think the private sector can't do better and cheaply.

    Example, the US does NOT have private health care, they have MANAGED care. Before government got involved the poor could resort to charity hospitals, middle-class people dealt directly with doctors and hospitals, so they could negotiate a price they could afford and the rich, well, the rich don't care in either scenario.

    I'll give you a couple of freebees; even leaving out Defense and Security (which allow us to even have this conversation in the safety of our own homes without worrying about someone coming in and killing us)

    If you think a country must spend 5% of its GDP in defense so that people can have conversations without constantly fending off brigands, well, its only a miracle that any of us are alive.

    Good thing the US Constitution has that 2nd Amendment clause too, eh?

    Your first statement invalidates anything you might be trying to say in the second. You can say it's not mindless all you want, but until you back up your statements with some facts and logic your arguments don't hold any water.

    Taxes don't make people poorer? _I_ am not being logical? You suppose you are richer when I swindle you for a fourth of what you earn?

Thus spake the master programmer: "Time for you to leave." -- Geoffrey James, "The Tao of Programming"