Big Tech $100 Billion Foreign-Profit Hoard Targeted by Tax Plan (bloomberg.com) 64
Technology giants led by Apple and Microsoft disclosed more than $100 billion in profit outside the U.S. in their last fiscal years, making them prime targets of President Joe Biden's proposals to boost taxes on earnings stashed overseas. From a report: The tax proposals, unveiled this month to help foot the bill for massive infrastructure plans, target common tactics used by U.S. multinationals such as stashing income-generating assets in low-tax offshore jurisdictions. The tech industry is particularly adept at shifting profits to tax-friendly locales because its main assets -- software code, patents and other intellectual property -- are relatively easy to move around compared to factories and other physical assets.
Former President Donald Trump's 2017 Tax Cuts and Jobs Act was supposed to crack down on offshore tax maneuvering, but Republicans neutered the rules by adding extra deductions and other benefits, according to Andrew Silverman, a tax policy analyst at Bloomberg Intelligence. Big Tech will find it harder to dodge Biden's plan because, if turned into law, it would close most of the loopholes left by Trump's 2017 legislation. The move threatens to leave the industry further at odds with Washington, where lawmakers are already scrutinizing the spread of misinformation on online platforms and regulators are embarking on antitrust investigations into large tech companies.
Former President Donald Trump's 2017 Tax Cuts and Jobs Act was supposed to crack down on offshore tax maneuvering, but Republicans neutered the rules by adding extra deductions and other benefits, according to Andrew Silverman, a tax policy analyst at Bloomberg Intelligence. Big Tech will find it harder to dodge Biden's plan because, if turned into law, it would close most of the loopholes left by Trump's 2017 legislation. The move threatens to leave the industry further at odds with Washington, where lawmakers are already scrutinizing the spread of misinformation on online platforms and regulators are embarking on antitrust investigations into large tech companies.
If I work overseas, I still have to pay US taxes (Score:2, Insightful)
Everything I earn, doesn't matter from where, is taxed, with local taxes deducted, sometimes. Are these people somehow special? This is too bad. Our labor is shipped overseas due to tax incentives, not just cheap labor. We need to stop reelecting these people that are so deep in corporate pockets and roll back all the tax rules made since the late 70s.
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Given that Apple and the other tech giants have essentially pissed on the shoes of the party willing to defend that principle, I'm not exactly going to get on my high horse and rail against The Injustice Of It All. They made their own bed. Let them sleep in it.
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-- H.L. Mencken
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Well, sort of, the first $108,700 is exempt from taxes .. ehh .. see I saved you money. Thanks, send me a check.
Reference: https://www.irs.gov/individual... [irs.gov]
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But you still have to file US taxes, and you get fined if you don't.
The bureaucracy of the whole setup is a nightmare.
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Everything I earn, doesn't matter from where, is taxed
Your first $108k of personal income earned overseas is exempt from US taxes.
Are these people somehow special?
On the contrary, only the US taxes corporations on income earned abroad. American companies are asking for normal treatment rather than special double taxation.
Why should America tax a product made in China and sold in Germany?
Our labor is shipped overseas due to tax incentives, not just cheap labor.
The problem is that this tax provides yet another reason to shift operations to non-American entities.
Biden even admits the incentive to move away by including increased penalties to make leaving more costly.
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I also don't understand the rationale of taxing citizens who are living and working overseas completely outside US jurisdiction. Requiring overseas spouses of citizens to provide tax info to the US Feds, even if they've never set foot there, seems even weirder.
That said, for US-owned corporations, what's the ethical argument against taxing income ea
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Aww.. (Score:2)
It couldn't have happened to a nicer group of companies. :~(
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That said, I would need the specifics. A lot of people's retirement investments are in these companies whether they know it or not.
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Yes, please consider our poor retired rich people with lots of assets in the stock market (and don't forget the children).
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Yes, please consider our poor retired rich people with lots of assets in the stock market (and don't forget the children).
Yes, or you could consider the actual victims. You know, the now-poor people who helplessly watch a company gamble the corporate pension fund away.
Like anyone gives a fuck about rich retired people.
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I thought we were whinging about taxes, not corrupt corporate managers.
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You don't think poor and middle-class people own stocks? 401K plans etc.?
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You don't think poor and middle-class people own stocks? 401K plans etc.?
Middle class people? Yes.
Poor people? Not unless we fail to understand the definition. When you're poor, you struggle to afford food and survive the month. Not exactly a lifestyle rife with the money required to gamble with investing.
Re: Aww.. (Score:2)
Top 10% own 90% of stocks.
Not the poor; not the middle class.
Amend the copyright act (Score:5, Insightful)
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America relies on intellectual property rights far more than any other country.
If American courts set a precedent of ignoring international IP rights, the world will laugh at our folly.
Re:Amend the copyright act (Score:5, Interesting)
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Someone hasn't studied US history.
The industrial revolution in the US started by stealing factory plans from Britain and duplicating them in the United States [smithsonianmag.com].
Slater bailed on the English and came to America in 1789, sailing on a ship to New York in response to the bounties offered by the American government for workers who knew how to manufacture cotton. The technologies involved in manufacturing cotton fabrics were held by the British, who kept them from the Americans by the fairly simple expedient of forbidding skilled textile workers from emigrating and not allowing technical drawings of the machinery to leave Britain.
...
However, Slater was able to sneak out of Britain. He wasn’t carrying any documents with him, but he had memorized everything he could about Arkwright’s machines and process. In America, he found the support of a Rhode Island merchant, Moses Brown, and constructed the first water-powered cotton spinning mill in that state. It opened on this day in 1790.
Industry in the US literally started due to IP theft.
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In his “Report on Manufactures,” published in 1791, Secretary of the Treasury Alexander Hamilton recommended rewards for those who brought “improvements and secrets of extraordinary value” to America.
Spies were dispatched, agents recruited, funds made available. Samuel Slater, an apprentice in England, stole textile machinery designs and took them to the US, where he became a successful businessman, establishing more than a dozen textile mills with their own farms and company towns.
A
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Deck chairs on the Titanic (Score:3, Insightful)
The federal deficit is forecast to exceed $3 trillion (with a T) this year alone, and they are obsessing about getting -- if they are fantastically successful -- less than a third of this $100B? That's a grand total of 1% of one year's deficit in a one-time move. What do they think will pay for the rest of their extravagant spending? What will be next year's encore?
Re:Deck chairs on the Titanic (Score:5, Interesting)
The federal deficit is forecast to exceed $3 trillion (with a T) this year alone, and they are obsessing about getting -- if they are fantastically successful -- less than a third of this $100B? That's a grand total of 1% of one year's deficit in a one-time move. What do they think will pay for the rest of their extravagant spending? What will be next year's encore?
A fiat currency emitted by a central bank that's (for all intents and purposes) owned by the government does not work like that. As I posted before under a different article [slashdot.org]:
* These governments no longer actually finance anything with taxes. They borrow as much as they need from a central bank to finance things (creating money), and then destroy money when they collect taxes and pay those loans back.
* There is no need to keep the borrowing and paying back side in balance just for principle's sake, or because "the debt will get too high" (since the government is basically borrowing from itself, it can destroy that debt again as well if absolutely necessary). See "How can the government get rid of base money" [taxresearch.org.uk] and following paragraphs in another article about what the options and consequences are of actually insisting on the government reducing the debt (although there is no real reason for that at this point)
* Government-issued bonds are no longer "the government borrowing money", but "the government offering an investment opportunity/savings facility"
* This does not mean a government can just spend as much as it likes. A balance between borrowing and taxes is required to keep inflation/deflation in check, but that is pretty the only reason, and the main thing you should look at. One of the most important factors here is what the created money is being spent on, and what money gets taxed/destroyed again.
Debt itself [taxresearch.org.uk] also has a different nature at the government level (compared to private debt) in this case:
* all money in the economy exists because it was created (or in case of loans from commercial banks, is eventually backed) by the government
* "This debt is just money that the government has created that it has decided not to tax back because it is still of use in the economy"
The St. Louis Fed agrees [taxresearch.org.uk] with this point of view, fwiw.
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How did that approach work out for Zimbabwe [wikipedia.org], which printed its own currency until 2009? Or the Weimar Republic [wikipedia.org] in 1922-1923? What about post-WW2 Hungary [www.ksh.hu], which (like here) tried to use government spending as a form of economic stimulus?
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"The Hungarian population practically lost all their money. Nevertheless this fact helped the stabilization process"
When the debt overhang in the private economy gets bad enough, even hyperinflation can be a good thing. That said, Zimbabwe was a corrupt hellhole with no economy to speak off and Weimar had to print to buy gold to pay off their debts. Japan meanwhile has stubbornly resisted to get the hyperinflation chicken littles keep predicting
The main problem is to force the money from the printing to go
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That's very much like "we had to destroy the village in order to save it", except for an economy rather than a village.
The problem is Gresham's law: bad money drives out good. When people believe that the dollar (or whatever) is bad, they will shift their savings to other forms of investment, like real estate or bitcoin or tulip bulbs. You can't just stick your finger in the dike -- by whatever means you think you can "force" consumption using inflated currency -- and hope to stop bad money from driving o
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Consumption drives the economy, savings and debt are a means to a cause ... and sometimes they can cause more trouble than they are worth for a long long time. Used to be that war was the standard solution to over-indebtedness in an economy, I prefer inflation.
You can ban bitcoin, you can tax real estate investment beyond primary residence. People will try to avoid taxation by inflation in other ways than plain consumption, but government has enough power to cut them off at the pass.
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Or watch John Oliver explain it nicely - https://www.youtube.com/watch?... [youtube.com]
The total debt has hit the 100% GDP mark in 2020, when Trump was president. Despite this, and the fact that the debt has been rising since Dubya, the US has been paying less interest on the growing debt. Despite all the doom and gloom pundits (probably because it happened during a Republican's watch), the economy, while it sucks, is still going along and mass rioting as seen in Greece hasn't broken out.
As for China, they own a lot of
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Fundamentally, productivity must be conserved - everything that's consumed must first be produced. Nobody can violate this - not even the government. When you try to consume more than you're producing (by racking up debt), you're setting up an imbalance which must be paid for at some point. That's why things like forgiving student loan debt isn't really eliminating student
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Soak 'em. (Score:2)
Technology giants led by Apple and Microsoft disclosed more than $100 billion in profit outside the U.S. in their last fiscal years, making them prime targets of President Joe Biden's proposals to boost taxes on earnings stashed overseas.
Aka soak the rich, which is both popular (sure beats, beating it out of the poor and middle class) and as old as government. After that we just need to make certain none of that windfall gets wasted on bridges too far.
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Eat the rich
Confusing for the Woke (Score:3, Interesting)
This will create some cognitive dissonance for big tech who hate on republicans for being conservative, but who give them tax breaks, vs Democrats and their left cohorts whom they align with on their politics now taking their lunch money.
How conflicted they must be.
Btw, as a business owner who just paid $1M in tax because I’m not big enough to offshore my tax, I really disclaimer they an unfair tax advantage over me and other small companies.
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I'm curious. What was left out of " I really disclaimer they an unfair tax advantage over me and other small companies"?
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Corporations aren't woke.
They are legal fictions.
Republicans and democrats alike usually fellate corporate donors.
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Corporations aren't woke.
They are legal fictions.
Republicans and democrats alike usually fellate corporate donors.
Fellate?
When Republican lawmakers were chewing out social media CEOs on the Congressional carpet, it sure as hell wasn't their dicks they were gnawing to the bone.
Not woke? OK. Let's see just how much money flows from social media to Republican coffers to confirm that theory. Something tells me that donations will become voraciously one-sided in our era of Woke-al Media.
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Unfortunately that's not true. Both sides are on the take: https://www.theverge.com/2018/... [theverge.com]
There are individual names and donations there. OpenSecrets has more. Literally every single person in Congress is taking bribes. The top PAGES of contributors for every single critter are a damning indictment of their illegal bribe-seeking behaviors and treason against the nation.
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Unfortunately that's not true. Both sides are on the take: https://www.theverge.com/2018/... [theverge.com]
Yes, I do understand how historically this has gone. I'm merely predicting a considerable shift in that given the events of the last year.
And while a bribe, is still a bribe, I find it rather shocking that these bribes are such pathetic amounts. Billionaire Big Tech is going to "buy" the Representative with a $2500 donation to their campaign? Seriously? Weird how that chump change buys influence. Yeah, it adds up, but it's still odd to me that the likes of Big Tech wouldn't be actually contributing far
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Right... Corps are "legal fictions" -- but that doesn't mean the leaders of the entities don't try to cater to particular sets of people they think will benefit them the most.
In the current climate, there's a pretty strong undercurrent of trying to politicize businesses. Most of the big ones are going for that appearance of being "woke", with internal campaigns supporting all the special interests involved, etc. A few hope to profit from going the opposite direction. I think reality is, they'd all be bett
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who hate on republicans for being conservative, but who give them tax breaks
Yes, but at the same time are also the ones who want incredibly tight regulations or paid lip service.
Democrats and their left cohorts whom they align with on their politics now taking their lunch money
But are also some of the same ones who'd yell "private business".
Ultimately it's one of those choices they make. Side with the folks that dictate how to run your business but won't tax you or side with the folks that don't care how you run your business so long as you are paying taxes. One could go with either group but the savvy always side with the group that'll benefit them enough to get the other team
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...I think the best way to put it is, it's like an economic black hole. At some point it only exists to suck up smaller businesses from the economy.
Dead accurate.
Now the question is, will the weak citizens of the world allow Greed N. Corruption to continue to collapse the global economy into the black hole of mega-corps?
Looking at Amazon, I'd say we're already at that point, but sadly we haven't even started with the corporate collapse.
My prediction? 20 years from now every human will be working for one of three dozen mega-corps, all lead by trillionaires that wield more abusive power than entire countries.
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Btw, as a business owner who just paid $1M in tax because I’m not big enough to offshore my tax
You can create an offshore corporation in the Cayman Islands for $200. Tax shelters are not just for "the rich". That is a myth. They are available to anyone willing to make an effort.
Assign your IP to the Cayman Corp and send your pre-tax profits overseas as "royalty payments".
For living expenses, borrow the money back from the Cayman Corp. The "interest payments" can be used to reduce your taxes even more.
You can go on an annual vacation to the Caribbean and write the trip off as a business expense.
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You can create an offshore corporation in the Cayman Islands for $200. .
[?]
Assign your IP to the Cayman Corp and send your pre-tax profits overseas as "royalty payments".
It's the bit in the middle that I don't quite get.
So, I've created a company in the Cayman Islands. It starts with ~zero assets. Firstly, how does this new entity pay for the IP that's transferred to it? After all, if it is valuable enough to license on an expensive and ongoing basis it must have a value, no? Secondly, what are the tax implications of this payment to the original company?
I realise this doesn't consider the case of ongoing 'invention', but I'm happy to admit my ignorance of how the loopholes
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You can create an offshore corporation in the Cayman Islands for $200. Tax shelters are not just for "the rich". That is a myth. They are available to anyone willing to make an effort.
You can create it, but you can't defend it. The rich can afford to go to court. Nobody else can.
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Can someone describe the plan to me? (Score:1)
It's going to be different this time (Score:2)
Republicans neutered the rules by adding extra deductions and other benefits, according to Andrew Silverman, a tax policy analyst at Bloomberg Intelligence
Because of what has happened since then, the same lawmakers are instead going to be gleefully adding more taxes to this year's bill. Watch for them to bargain for more tech taxes in return for less of a personal tax increase.
Makes sense (Score:1)
companies will relocate (Score:2)
Then the US will have less control and less jobs.
And revenues go down when taxes climb.
So thank Biden for all of that.
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I like that. "Revenue will go down as taxes go up."
Right. In '72, the top tax rate for individuals was SEVENTY PERCENT, and the US federal revenue stream was about TWENTY-FIVE PERCENT from corporate taxes. Then Raygun came in with his tax cutters.
Now, the 90% of us have less purchasing power than 50 years ago, while corporations are vastly more ROI to stockholders, and, oh, yes, CEOs.
Oh, and back then, the average CEO was paid 20 times the bottom worker; now it's 278 time.
Which revenues are you talking abou