Note that those big multinational corporations can't move money made outside the country to back home in the USA without incurring an absurd ~30% tax on top of whatever other taxes they paid whoever already. Word is Apple has been pushing for an amnesty so they _can_ bring their money home; until then, that money earned outside the US stays outside the US.
Last time we had an amnesty, all the money that flooded back in to the USA wasn't reinvested the companies or used to grow the economy, it just want straight into bonuses and dividends.
I'm not sure I follow. Distributing profits to employees (bonuses) or to investors (dividends) is bad? The employees and investors now have more money to buy things or to re-invest.
I'm not an economist, but I think that when money flows from A to B, the economy does grow. It doesn't matter if that flow is to employees as bonuses, investors as dividends, or to vendors as business expesnses.
> I'm not an economist, but I think that when money flows from A to B, the economy does grow.
Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. When you consider that under normal circumstances 30% of that money would flow into the federal government to fund programs, it's pretty clear that less money flows into the economy in cases of tax amnesty.
"private accounts of executives" is an interesting phrase when you cold have said "checking accounts of employees". It conjures up the image of Scrooge McDuck sitting on a pile of gold.
But that money is in the economy. If these "Executives" put it into stocks, then it funds company growth. If they put it into municipal bonds then it funds cities. If they put it into a checking account, then it funds home loans. IF they were to turn it into cash and put it under their mattress-- then it still funds government spending (via inflation.)
The only possible way I can think of to take that money out of the economy-- and granted this is even if your assertion that "all the money" goes to these fat cat "executives" were true, and I'm not buying it--- the only way they can take the money out of the economy would be to buy actual physical gold bullion coins and put it in a basement.
So, if these guys really were like Scrooge McDuck and literally had a basement full of gold coins then it would be out of the economy. But that is pretty much nobody.
You're ignoring the part where we were discussing a tax holiday. When executives hoard money overseas for a decade and then bring it back tax-free, they are basically depriving the government of the tax revenue that money transfer should have brought in.
Beyond that, there's not a lot of evidence for the notion that execs making more money is a net gain for the economy. It seems intuitive that more money in the hands of the wealthy would result in more investments and growth, but to the best of my knowledge there's not much evidence for that.
The real question is not whether handing the wealthy extra money is bad, but whether it's as good as doing something else. Sure, giving a wealthy man another million might get him investing more. Giving that million to the economy at large might do more, though. After all, those same investments you say the wealthy will make could be made by average joes.
depriving the government of the tax revenue that money transfer should have brought in.
I'm not sure about the "should have" part here. That money was earned in another country. It has already had tax paid on it, in another country.
It's silly for the US to try to double-tax companies, it just puts US-based companies at a competitive disadvantage against local companies when competing for foreign business. For instance, suppose US Sprocket International sells a million sprockets at a $10 profit each, in Germany. Meanwhile, Deutsche Sprocket Gmbh is also selling a million sprockets at $10 profit each in Germany. Both US Sprocket and Deutsche Sprocket have to pay, say, $3 million in taxes to the German government for doing business in their country, and that's fine. But while Deutsche Sprocket is done with their tax obligations, US Sprocket then goes and finds that the US Government also wants a cut out of their profit. This makes doing business in Germany significantly less worthwhile for US-based companies.
Besides, let's not forget that company profits are already double taxed anyway. Tax is paid when the company makes a profit, and then again when by the shareholders when they receive their dividends. So we're really talking triple taxation here.
I don't think you really understand how the offshored profits work. It's not just that money isn't brought back from overseas, but that money made in the US can be sent overseas. You create a wholly-owned overseas company that gets paid to do some kind of work for you. Then you way overpay them for that work. As a wholly-owned subsidiary, all the extra money they hold is actually owned by you, but you don't pay taxes on any money you send them because you call it an operating expense. So you effectively send a bunch of money overseas untaxed. Your German division does the same thing, and now all your money is sitting in the Cayman Islands waiting for a tax holiday so you can bring it home.
Your German company scenario is incorrect as well. Firstly, because they don't have to make any significant profit in Germany. US Sprocket GmbH could buy the sprockets from US Sprocket Inc at nearly the same price they sell them for, transferring the money to the US corp while paying almost no taxes in Germany (high revenue with equally high costs means no profit). Secondly, Deutsche Sprocket GmbH is dealing with the same "double taxation" in the US, so it's not an economic disadvantage.
That's not true. Companies aren't free to set transfer prices. The IRS has many rules on how much a company can charge a foreign unit for a product (and vice verse). That method of tax avoidance was closed a long time ago.
It was not closed, it was reduced. Companies are still doing it. They wouldn't continue if it wasn't beneficial to do so.
US regulations also don't do anything to transfer prices in other countries. Google apparently pays something like 2.4% tax on their foreign profits because they funnel them all to the Bahamas.
I won't argue that companies are still trying to reduce taxes through transfer prices. However, any company that tries to avoid US taxes through transfer price schemes is not going to get very far. I have no doubt that Google is funneling a lot of revenue through the Bahamas, but they must have setup the off-shore corporation in such a way as to fall outside the jurisdiction of the IRS. To say that they are only paying 2.4% on "foreign profits" means nothing. If that's what they are supposed to pay, then nothing is wrong right? Google is an international corporation.
I think the policy dilemma is that you are both right to some degree. If it wasn't such an ideologically charged issue, the solution would be quite simple. Tax repatriated profits but reduce the amount payable by the taxes paid overseas. Or enter into a double taxation agreement with the countries involved.
I think it would be reasonable to reduce the tax by the amount of foreign tax paid, but I don't think it would fix the problem. Most of the money in offshore havens was barely taxed. So instead of 35%, Apple can pay maybe 30% bringing it home. That's not enough of a drop to motivate them. It would probably open some more loopholes, too, but I can't be sure about that.
The real issue is that some countries want to allow this stuff. They want these shell companies because it brings them some revenue they wouldn't otherwise have. And who can blame them, really. So as long as we have international companies, we'll have tax havens. I'm not sure if there really is a fix.
Companies already get to reduce their US tax by the amount of tax they paid a foreign government. The issue here is that that they've moved the profits to places where little or no taxes are paid at all. This is not about double taxation.
If you distribute a million dollars across the entire US economy, that's roughly 30 cents per person, and it's likely to be spent on some chewing gum or a very small amount of food. It dissipates before it has a chance to grow. If concentrated, the million dollars can be applied to things that are only possible when money is concentrated, like doing research and development, investing in large construction projects, etc. Instead of spending the money directly on basic resource acquisition, when concentrated, it can amplify resource production, which lowers prices and provides a greater benefit to the average Joe than having another 30 cents in his wallet.
Money doesn't "dissipate" because it's spent. Money changing hands is what fuels the economy.
There's also no reason to assume that tax money goes from wealthy pockets to poor ones directly. The government can build infrastructure (which they do a lot more of than private industry), fund R&D, etc. Individuals could also invest their money into funds that fuel R&D, fund startups, etc. It's incorrect to claim that only the wealthy invest.
"There's also no reason to assume that tax money goes from wealthy pockets to poor ones directly. The government can build infrastructure (which they do a lot more of than private industry), fund R&D, etc. Individuals could also invest their money into funds that fuel R&D, fund startups, etc. It's incorrect to claim that only the wealthy invest."
And there are some project that only the government can take on due to how long cost recoup would be or the risk levels (Space, Internet...) but those things fund high paying jobs.
You make the assumption that tax money goes into the population's pockets instead of government-funded projects.
Your argument is easily reversible to raise taxes across the board in order to concentrate the money into government projects rather than having it spread around.
That's not entirely true. The effect you describe depends on loan growth. Money sitting in bank accounts isn't automatically funding anything. There has to be demand for loans and the banks have to be willing to lend, otherwise nothing happens.
In other words, there's a difference between capital being available and capital being put to use. Velocity of money is important.
Also, if I buy Apple stock today, Apple doesn't see a cent of it. Whether or not that money goes on to fund anything at all depends on what the person who sold me the stock does with the money.
Sure, but that in itself does not make the economy grow. It could potentially make the economy grow if the person I buy the stock from uses it to buy other shares in an IPO and that company spends the money to fund actual work. Or if that person just puts the money into consumption.
I'm just saying that boosting some share price does not in itself fund any labor. That's important, because the difficulty of getting the economy growing again after a balance sheet recession like the one we just saw, is to get money moving, not just sitting somwhere with a nominal price tag on it.
> Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy.
Can you give an example of how this would hurt the economy?
EDIT - those that down voted, mind giving a reason?
Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it somewhere more optimal.
I think it's pretty obvious that taking money away from the rich giving it to the poor, maybe even in the form of food stamps, has a very direct and immediate effect on GDP. So it is clearly optimal in the short run in terms of GDP and also for helping those who really need it in times like these.
But in the longer run, some of the money needs to go into investment or society will stagnate. Some of that investment can be done by governments, but central planning isn't very good at exploring new ideas. Transparent, democratic governments can be pretty efficient in doing things that are already well known and institutionalized. For instance, European health care systems are hugely more efficient than the US one.
On the other hand, the Googles and Apples of this world are difficult to imagine as creatures of some government.
I don't know what optimal is, but the evidence is that giving more to the wealthy doesn't help much. My family is decidedly upper-upper-middle class, and I won't pretend that cutting my taxes will stimulate the economy. Extra money is going into loan repayment or savings. If my taxes went away entirely, I'd spend more, but not enough to offset the loss of revenue to the government.
I fully agree that there must be private investments, and indeed there must be wealthy people. Whenever I hear someone say "No one needs more than X dollars", I immediately know that I'm talking to an extremely naive person. However, I do think that the pendulum has swung too far in favor of the wealthy, not just in terms of taxes.
Edit: Just to be clear, dumping money into the pockets of average Joes isn't necessarily going to do anything to stimulate the economy either. The tax rebates showed that.
I didn't downvote your question. I don't believe HN lets you downvote someone who replies to you, and I don't have the karma to downvote anyway.
I don't think you would accept a concrete answer. Do you believe that every dollar in every place (federal tax revenue, corp coffers, billionaire's money market account, average joe's mortgage, food stamp, etc.) has the same value to the economy? If not, then you must agree that some of these are better places to send a dollar than others. Whether choosing a suboptimal flow "hurts" the economy is semantics.
If you think that putting another dollar in a wealthy man's account is the best use of the dollar, then I would say that history disagrees with you, as there's little evidence that "trickle down" economics work. Something like 80% of economists say it doesn't work.
As long as those money are flowing, it helps the economy.
The only instance where it wouldn't is if it disappeared from the market.
This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them.
> As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market.
This is naive. In what sense does it help the economy if I take $1000 from my account and give it to my friend who puts it into his account? There's no extra money in circulation, no projects funded, no growth, nothing. Money moved and it did nothing.
> This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them.
I'm not clear how that proves that money flowing always helps the economy. What the VAT indicates is that the EU believes in taxing at all points along the chain of production.
if I take $1000 from my account and give it to my
friend who puts it into his account?
I am not really familiar with the U.S. but here's what happens in Europe, regardless of the legality of that transfer (in my country you cannot give 1000 USD as a gift and not pay taxes, unless you're using some kind of offshore account or other means of tax-evasion):
As soon as your friend spends it, in my country 240 USD will go to VAT. Out of the remaining sum, the company receiving the payment may have to pay salaries. Not even Google can get away with not paying taxes on salaries and taxes on salaries are somewhere north of 40%.
So lets say something like 450 USD (out of that 1000 USD) will end up in the pocket of some employee. Then that employee spends it on something -- another 100 USD will go to VAT, and ~ 340 USD going to the company receiving the payment. Some part of that 340 USD will go to salaries, which are taxed and then employees are buying stuff, so they get taxed again.
Companies also pay taxes on investments or sunken costs, not only salaries. So if Apple brings home some of those billions, but acquires some U.S. company, than a lot of money will still go as taxes.
It really goes round and round.
Also, here's an anecdote -- I live in Romania. We are not like Greece, we are not currently in danger of defaulting. Do you know the main reason for that? It's not because we pay our taxes -- in fact, I think we do more tax evasion than Greece is.
The reason has to do with money getting in. We've got more than 4 million people with foreign jobs and residences that are sending money home to their families. Those money are not getting taxed, but it has been enough for our economy to not completely go downhill, and I know this little fact from good sources.
You've changed the scenario. You're now talking about spending the money, which is wholly different from the scenario I described. In my scenario, money flowed but did not help the economy. In your scenario, you're assuming the $1000 was spent and then following the trail of its expenditure. But if the money is never spent, none of that revenue will ever get to the government.
I also think you might be wrong about the legality of a tax-free wealth transfer. According to this site, Romania has no gift tax.
And if we are extending the metaphor to wealthy individuals and corporations, they have plenty of people on staff to help avoid or minimize taxes. Ironically, I also read that Banks are specifically excluded from the VAT in Romania.
> Companies also pay taxes on investments or sunken costs, not only salaries. So if Apple brings home some of those billions, but acquires some U.S. company, than a lot of money will still go as taxes.
I'm pretty sure that's not the case. If Apple brings home those billions, they'll pay whatever taxes are owed for that profit. They won't pay extra if they then use the remaining money to buy up another company.
As for why Romania is doing better than Greece, I think it has a lot to do with the fact that Greece's debt is about 144% of its GDP while Romania's is about 34%.
Romania's revenue/expense ratio is also better than Greece's. There are probably a lot of reasons why Romania is doing better than Greece. It's not just because Romanians send money home to their families.
Money going to the government to "fund programs" doesn't go into the economy either. There's a possibility it will go to salaries and things, but that's hardly a guarantee. The government doesn't create the economy, private sector growth does. When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere).
> Money going to the government to "fund programs" doesn't go into the economy either.
It most certainly does. The government doesn't hold any significant amount of money in reserve. Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.)
> When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere).
This is a lovely dream with little evidence to support it. The idea that rich people getting richer helps the economy is not founded on fact. There's been a tax holiday before. It didn't grow the economy. Tax cuts for the wealthy did not grow the economy. Even if wealthy people invest more when they get wealthier, the real issue is whether that is more valuable to the economy than more dollars flowing through the hands of most people, more dollars flowing into infrastructure investments, etc.
"Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.)"
Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that government uses to get the money in the first place inhibits economic growth. Both actions reduce the "bottom line" for consumers and companies and thus reduce the funds they have available when deciding to make capital purchases- whether it is a house or a car or sending kids to college or building a plant to create more jobs. All of the money government takes prevents those things from happening.
The second is that you're ignoring that much of that "investment" is actually spent on activities that are themselves net-harmful to the economy. Such as the overzealous regulators that shut businesses down, the agencies that spend their time inhibiting efficient running of businesses, or even make it impossible to operate your plant safely because government regulations don't allow the use of the latest safety equipment (only what was on the market at the time the regulation was created) or FDA examiners that drive costs thru the roof, and prevent access to drugs for dying people because the drugs are "experimental" and might kill them in 20 years (though their disease will get them a lot sooner) etc. Much of the money government spends is on programs that make people less safe and more on topic, undermine economic growth with no real benefit other than providing good political jobs to hand out.
"This is a lovely dream with little evidence to support it."
The entire history of the USA supports it.
"The idea that rich people getting richer helps the economy is not founded on fact."
The error you're making here is that you think that letting people keep their money only helps the rich. IF you take all of the incomes of the bottom %50 of the populace and you compare it to the incomes of the tope %50 of the populace, there are a lot more people in the lower half and they make a lot more money. Not squandering that money benefits them a whole lot more than it does the rich.
Frankly, the economics are not really up for debate. They don't support your side. The slogans about "rich people getting rich" are just rationalizations for theft.
That theft, actually, hurts poor people more than it does rich people. Rich people are insulated, the poor are not.
Bush's original Tax cut proposed reducing taxes for poor people by %50, IIRC, and the reduction for the richest was around %2. After the democrats managed to "compromise" it, what got passed reduced taxes for the poorest by %20. Why weren't the democrats in favor of the large tax cut for the poor?
And even still, even though every way you measure it-- dollar terms or percentage terms-- these tax cuts helped the poor more than the rich, ever since they've been passed, democrats have been calling them "tax cuts for the rich".
Frankly, from an economics perspective, lower regulation, lower taxes, lower inflation, no matter how unevenly applied, helps the poor. It always does, it always will, and in fact it has to-- the primary way you get rich is by improving the lives of the poor.
I don't understand why democrats constantly support policies that hurt the poor, are constantly trying to raise their taxes (While always, of course, claiming to only want to tax the rich) but they do.
I'm not a republican, so, put down that assumption I've just studied economics. What the politicians tell you about economics is designed to serve their interests, not yours.
> Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that government uses to get the money in the first place inhibits economic growth. Both actions reduce the "bottom line" for consumers and companies and thus reduce the funds they have available when deciding to make capital purchases- whether it is a house or a car or sending kids to college or building a plant to create more jobs. All of the money government takes prevents those things from happening.
This is ignoring the fact that government spending results in a ton of net-positives. The government might tax your bottom line, making it harder for you to buy a Lexus (and send an extra $10K overseas), but those taxes build roads, provide social security and medicare, fund our military, etc.
Obviously government spending must ultimately come from the pocketbooks of the people, but the fact is that government spending is a necessity. Giving 100% of everyone's money to the government would be a very bad thing, but giving no money to the government would be at least as bad. So somewhere in the middle is an appropriate amount of taxation. Claiming that taxation and inflation "inhibits economic growth" as a blanket fact is patently untrue.
> The second is that you're ignoring that much of that "investment" is actually spent on activities that are themselves net-harmful to the economy. Such as the overzealous regulators that shut businesses down, the agencies that spend their time inhibiting efficient running of businesses, or even make it impossible to operate your plant safely because government regulations don't allow the use of the latest safety equipment (only what was on the market at the time the regulation was created) or FDA examiners that drive costs thru the roof, and prevent access to drugs for dying people because the drugs are "experimental" and might kill them in 20 years (though their disease will get them a lot sooner) etc. Much of the money government spends is on programs that make people less safe and more on topic, undermine economic growth with no real benefit other than providing good political jobs to hand out.
So if we get rid of regulations the economy will improve? Some regulations are obviously a net negative, but most of our regulations were put in place to address known problems. Why would deregulating drugs help us? Clearly the drug companies are making plenty of money, and yet they are the ones arguing in favor of deregulation. If they are in favor of deregulation, surely they expect to make more money in the absence of regulation. Do you think that implies a drop in costs? Perhaps it implies a decrease in safety testing instead? We did a lot of deregulating banks, and that worked out really well. Please tell me why you think businesses would bother to be safer if OSHA was eliminated. There was a time when we didn't regulate workplace safety. We enacted laws specifically because in the absence of regulation, workplaces are less safe. When workplace safety is not required, more people die. When fire codes are not required, building burn down more often. The libertarian ideal ignores the fact that regulations were largely enacted to fix very real problems.
> The entire history of the USA supports it.
It most certainly does not. The wealth gap at its present is far larger than it historically has been in the US. Yet we don't see a sailing economy. On the other hand, after WWII taxes were obscene, yet the economy boomed.
> The error you're making here is that you think that letting people keep their money only helps the rich. IF you take all of the incomes of the bottom %50 of the populace and you compare it to the incomes of the tope %50 of the populace, there are a lot more people in the lower half and they make a lot more money. Not squandering that money benefits them a whole lot more than it does the rich.
This doesn't even make sense. There are not more people in the bottom 50% than in the top 50%. There are equal amounts in both halves. And the bottom half certainly doesn't make more money. That's why it's the bottom half.
> Frankly, the economics are not really up for debate. They don't support your side. The slogans about "rich people getting rich" are just rationalizations for theft.
Strangely, something like 80% of economists disagree with you.
> That theft, actually, hurts poor people more than it does rich people. Rich people are insulated, the poor are not.
Not at all true. Poor people pay no or nearly no tax. Middle-class people pay less tax. With respect to corporate tax holidays, not a lot of poor or middle class people see any income from that.
> Bush's original Tax cut proposed reducing taxes for poor people by %50, IIRC, and the reduction for the richest was around %2. After the democrats managed to "compromise" it, what got passed reduced taxes for the poorest by %20. Why weren't the democrats in favor of the large tax cut for the poor?
Probably because the poor don't actually pay any significant federal income tax. Many of them actually get tax credits.
Also because your information is incorrect. Bush's tax cuts brought the top tax bracket down by about 5%.
> And even still, even though every way you measure it-- dollar terms or percentage terms-- these tax cuts helped the poor more than the rich, ever since they've been passed, democrats have been calling them "tax cuts for the rich".
The tax cuts were moronic regardless of who they helped the most.
> Frankly, from an economics perspective, lower regulation, lower taxes, lower inflation, no matter how unevenly applied, helps the poor. It always does, it always will, and in fact it has to-- the primary way you get rich is by improving the lives of the poor.
This is delusional. You don't get rich by improving the lives of the poor. You get rich by getting a lot of money. You can do that by starting a profitable company, inheriting a lot of money, trafficking drugs, stealing money from others, and any number of other ways. Some ways that you could get rich will help the poor. Other ways will not.
> I don't understand why democrats constantly support policies that hurt the poor, are constantly trying to raise their taxes (While always, of course, claiming to only want to tax the rich) but they do.
I'm not a republican, so, put down that assumption I've just studied economics. What the politicians tell you about economics is designed to serve their interests, not yours.
I don't understand how anyone, Republican or otherwise, can look at what's happened in our country over the past decade and come to the conclusion that deregulation and lower taxes are beneficial. Look at the unemployment rate. Look at the federal deficit and debt. Exactly how have Bush's tax cuts helped most people?
Distributing profits via bonuses and dividends in the US without US taxes being collected on that money is bad, yes. It's not like corporations pay a very high tax rate, even on the rare occasions that they do actually pay their full tax obligation, after all.
And the other point, of course, is that money that goes directly into the savings accounts of the already-rich does not tend to stimulate the economy very well. This is a rather well-demonstrated fact: if the money doesn't get spent, there's no economic impact there.
There are plenty of ways to set things up so that dividends are not taxed in the US, the most obvious being stocks owned by charitable organizations or resident of another country. As to bonuses the AMT was specifically created because of people paying zero taxes despite significant income. However, you can have situations where a bonus results in minimal, zero, or even negative additional taxes for a given year. EX: Putting the full value of a bonus into a 401k while over the SS cap.
In order to grow GDP, you must increase the production of goods and services domestically.
Sure, more money for investors/employees is not bad. But an amnesty is no different than the government directly giving money to them. It's never bad to give employees a tax credit, but when we're in such dire straits there are more urgent uses for the money. It's never about "Is giving money to X wasteful?" but more about "Is that the best I can do?"
And those don't get income taxed at around the higher income brackets of over 30%? Wont a corporation just be able to write off bonuses as employee compensation expenses anyway?
Again, this is not because of ordinary sales outside of the US. This is a purposeful effort to reduce the amount owed in US taxes on activity in the US (and other "high" tax countries).
1. They get credit for all the taxes they paid in other countries. They are essentially supposed to pay the difference between the US rate and the various foreign rates.
2. If you read some of the links, you'll discover that they are minimizing the taxes they pay on US revenue -- sales made right here at your corner Apple store -- by use of clever licensing agreements with their own foreign subsidiaries. Look at the interactive graphic on the Bloomberg story about Google, for example http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
Why should they pay tax on that money? It was generated in a foreign country by a foreign corporation and already subjected to foreign taxes.
The US didn't expend resources helping them make that money, therefore it doesn't deserve any of it. If anything, we should be encouraging them to bring it back here.
Also, I know people who live and work in foreign countries and haven't stepped foot in the US for decades who still pay tens if not hundreds of thousands of dollars to the US each year in taxes. So yeah, it's unfair that large, American corporations are somehow exempt.
I'm as tax-phobic as any red-blooded yank, but if we are going to demand ever increasing government services and entitlements (including corporate welfare), we better be willing to pay for it.
Apple and Google are not foreign corporations, but they own foreign subsidiaries which are responsible for doing business in their respective countries.
That is not correct. Did you actually read any of the links above? Apple, Google, Microsoft and others shift billions of dollars a year in profits ON SALES IN THE UNITED STATES out of the US and to low tax or no tax countries using clever internal sales agreements with their own subsidiaries over intellectual property licensing. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
I just meant in the general sense. Google needs to pay their taxes too, but tech companies aren't the only ones evading taxes and getting away with it. Specifically this tax? Maybe not. But that wasn't the point.
Why would you source Apple's effective tax rate at http://www.advfn.com/ and not point out that on the same website, Google's effective tax rate is 21.4% and not 2.4%?
Why, other than for fairness? I have far more confidence that Apple will spend the money in a way that benefits me than that the government will. They certainly have so far.
