
Hundreds of Companies Seen Cutting Tax Bills by Sending Money Through Luxembourg - hokkos
http://www.nytimes.com/2014/11/06/business/international/hundreds-of-companies-seen-cutting-tax-bills-by-sending-money-through-luxembourg.html
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none_for_me_thx
In principle, the more people and companies avoid taxes the better: less
revenue for states to use as collateral for their various wars and illegal
projects.

In practice, Luxembourg appears to have given preferential treatment to larger
corporations---more specifically, cronies. Low-tax jurisdictions where every
kind of person or business can get in on the benefits of tax avoidance would
be best.

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jasonwilk
Instead of having my company pay 50% of our profits each year to the US
government, I should get a massive rebate if I can offset those profits by
hiring new employees over the following 12 months. I would hire 50% more
people if this were the case. It's a major incentive and one that should be
put in place.

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tn13
This is a healthy trend. Also a good lesson to US government that the current
levels of taxation are not viable. US government might end up earning more tax
revenue with lower tax rates.

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rbcgerard
Absolutely shocking!

What's funny is we have our own internal tax haven's in the U.S., say Delaware
and Puerto Rico to name two...

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gamblor956
Delaware is not a tax haven; it's popular for its legal environment highly
favorable to management of large corporations.

Puerto Rico is currently a tax haven, but only due to a temporary (but very
generous) tax incentive that requires people to permanently and physically
move themselves and their companies to Puerto Rico.

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jhulla
As long as no laws are violated, tax arbitrage is responsible corporate
behaviour. These companies aren't "cutting tax bills", so much as they are
arbitraging between different tax regimes across borders. It is their
responsibility to their shareholders to do so. Market forces will dictate that
if they don't, a more nimble competitor will and will subsequently take market
share.

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edejong
True, from a first order perspective (short-term). But it's not the only
perspective. It's also in the shareholders best interest when crime rates in
the vicinity of their production and R&D facilities are low, education levels
are high, transport systems are functional and well maintained, etc. etc. We
can all agree on that.

However, cooperation would require negotiations of laws on a global scale. The
existing systems in our old nation states are just not suitable for that.

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jhulla
Sure - but addressing social & public needs is the responsibility of
government, not private corporations.

Tax arbitrage strategies can be shutdown by governments. Transparency would be
a good start. Require every listed corporation to diagram all of their
corporate/llc vehicles worldwide and their interdependencies. Require balance
sheets and cash flow statements for each of these entities.

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dba7dba
Govt needs fund (aka tax) to pay for carrying out the responsibility of govt.
And yet these powerful new elites of the society now actively resist paying
taxes. They obviously care for their own pockets only but they drag other
wannabe riches into the same camp too. In the end the govt loses more and more
tax revenue.

A little historical digression. Kings often had trouble keeping merchants and
rich nobles in their places. Often the kings lost out, either completely as
losing their heads or losing the power and become figure heads. And these
kings often seemed to have absolute power and yet they couldn't keep the
powerful in the society in check.

And nowadays these corporations lobby the govt and influence the high
officials from early on with promise of cushy jobs for them or their kids.

Govts shutting down tax arbitrage? Yes, sounds so easy but it's near
impossible because the powerful forces in society are resisting it.

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mikeyouse
A notable quote from Jean-Claude Juncker, the former Prime Minister of
Luxembourg:

> No one has ever been able to make a convincing and thorough case to me that
> Luxembourg is a tax haven. Luxembourg employs tax rules that are in full
> accordance with European law. [1]

I wonder how such blatant tax evasion becomes legalized?

Oh right:

> The new European Commission formally takes office on Saturday under [new
> President] Jean-Claude Juncker ... [2]

[1] -
[https://twitter.com/dimits_/status/530105602312515584/photo/...](https://twitter.com/dimits_/status/530105602312515584/photo/1)

[2] - [http://www.channelnewsasia.com/news/world/juncker-s-eu-
commi...](http://www.channelnewsasia.com/news/world/juncker-s-eu-
commission/1445918.html)

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tn13
There is no virtue in paying tax. Why do people think that paying taxes is a
good thing tax evasion through legal means is bad ?

It is government's responsibility to run the state by stealing as little as
possible. At the current rate US government is stealing our money to provide
welfare to mostly irresponsible and lazy people.

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yequalsx
Given that you use the word "stealing" to refer to a govrernment's collection
of taxes we probably won't agree on this issue. Taxes in the U.S. are at mult-
decade lows. At least as of 2012. Taxation was around 15 - 16% GDP. The vast
majority of federal taxation is not used to provide welfare to irresponsible
and lazy people. Note that Social Security and Medicare are not entitlement
programs.

Do you believe the U.S. is overtaxed? What percent of GDP should be taxed in
order to fund government operations? Do you have specific programs in mind
and, most importantly, do you know what percent of the budget is used for
these programs you'd like to cut?

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f3llowtraveler
In Zug, Switzerland they have an excellent health care system with universal
coverage. They also have very nice roads and a high standard of living, and
low unemployment. They also have a strong defense based on armed neutrality,
which kept them out of both world wars.

The income tax is 2%.

So if you are paying more than that, you are probably getting ripped off.

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mikeyouse
Zug? Really? The town that has more companies than citizens? Something tells
me that their city isn't run via personal income tax, something else tells me
that their tax policies won't scale globally...

[http://www.theguardian.com/business/2008/may/31/taxavoidance...](http://www.theguardian.com/business/2008/may/31/taxavoidance.tax)

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f3llowtraveler
You think 60% in taxes scales better than 2%?

