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[Fenderputty]

They are a free country entitled to set up their own tax system unfortunately. They are geographically dis advantaged so they have to provide financial incentives to attract investment.

Companies will pay more tax to be based in the UK for instance as it is the proverbial chronological centre of the world. Even then that is a limited advantage.

They've already been taxed on the money elsewhere hence it stays where it is

It's our loophole that provides the environment for these places to set up their tax policy.

 

[Loki]

That's trifling next to the $21 trillion the super rich hide offshore . Let that number sink in.

 

[Mammoth Jones]

But welfare queens though!

This is what kills me. People bitch about the single black mother in coded language all day but always conveniently forget about corporate welfare via tax laws that allow shit like this.

 

[Funky Papa]

Incoming "don't blame the gamers, blame the game" comments.


*willfully ignoring that those gamers are gaming the game in the first place.

 

[CloudyTuba]

$620 billion dollars in tax money not collected due to business loopholes and greed, but they want to tell us it's social programs and minimum wage eating up too much money.

And certain people want to argue that corporations need more tax breaks and more loopholes and more freedom because this is America and if you suggest otherwise you must be a communist.

 

[Aureon]

That 620 billion figure is if the money got taxed at 35%. But the effective corporate tax rate is only something like 12.8% so really the money earned from having the money brought back over would be much lower. Like only 250 billion ish.

There's income tax when it gets distributed to shareholders, or paid as stipend to someone.

 

[kitch9]

It's our loophole that provides the environment for these places to set up their tax policy.

It's a "loophole" that can't be closed every country wrestles with it and gets no where.

There's a strong argument to do away with corporation tax altogether and focus more on the personal level. Thinking being shareholders will pay themselves more or companies would invest more. Tax that instead.

 

[Black Mamba]

Remember, we tried repatriation in 2004 and is was a massive failure.

WASHINGTON -- The 15 companies that benefited the most from a 2004 tax break for the return of their overseas profits cut more than 20,000 net jobs and decreased the pace of their research spending, according to report from the Democratic staff of the Senate Permanent Subcommittee on Investigations released Monday night.

The report warned against repeating the tax break, calling the 2004 effort "a failed tax policy" that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshore. U.S.-based multinationals often defer bringing back profits earned abroad to avoid paying U.S. taxes on them.

The 15 companies that repatriated the most after the 2004 tax break on the return of overseas profits later cut a net 20,931 jobs between 2004 and 2007 and slightly decreased the pace of their spending on research and development, found the report surveying 19 companies' activity.

Meanwhile, the top 15 repatriating companies also accelerated their spending on stock buybacks and executive compensation after the tax break. The top five executives at those 15 companies saw their compensation rise 27% from 2004 to 2005 and then another 30% between 2005 to 2006.

The 2004 repatriation tax holiday further motivated companies to keep even more of their earnings overseas, the report found. With the exception of Pfizer, the 10 companies that repatriated the most money after the 2004 tax break have stashed increasing funds offshore every year since the 2004 tax break, the survey noted.

For example, Coca-Cola Co. brought back "nearly all" of its qualified earnings from a unit in the Cayman Islands that had no Cayman employees and functioned to provide "legal insulation" for its U.S. assets, the company answered in the survey.

A 2009 study by tax experts Lee Sheppard and Martin Sullivan found that, between 2003 and 2007, firms that had participated in the tax holidaydoubled the average annual increase in the amount of cash they held overseas, from $60 billion to $122 billion. [13] Their data, "show multinationals are loading up on unrepatriated earnings at a far greater rate than before the tax holiday legislated in 2004," Sheppard and Sullivan concluded.

 

[redmetal86]

Oh crap.

 

[cdyhybrid]

JOB CREATORS

 

[egruntz]

Corporations are people, my friend.

I don't think anyone here knew who you were quoting lol. I laughed though.

 

[Davey Cakes]

wow this is depressing. we can probably thank Republicans for this.

You can thank greedy people. They come in all forms.

 

[dionysus]

Math in OP is wrong.The way repatriated overseas profits are taxed is on the difference between what they would have paid in the US vs. what they paid overseas. So lets say after all deductions are accounted for a corporation would pay 25% tax rate in the US but paid 20% in Germany. When they repatriate the money, they would pay only 5% to the US.

Also the US is one of the few countries that even taxes overseas profits. Why would you want to discourage repatriation that will get used in the local economy? (Capital investment, dividents and taxes on dividends, salaries, etc.) Taxes on overseas earnings is fucking dumb.

 

[d00d3n]

US companies should not be suckers. EU will gladly sell IP for a part of that $2.1tn to nullify any taxes. Win-win situation for the US companies and EU

Spoiler

Sorry US government

 

[Walpurgis]

Because the system is designed for people at the top to get all the profits.

600 billion dollar yearly Defense Budget baby. Don't worry - Everybody is born with bootstraps and if they work hard they will get to the top. It's how the fathers of America did it. can't unexplain that. mooching socialists want to turn the country into Russia because they are lazy and dont want to put in effort.

Exactly. So don't feel bad about all of this missing money. You'd never see it anyway.

 

[Black Mamba]

Math in OP is wrong.The way repatriated overseas profits are taxed is on the difference between what they would have paid in the US vs. what they paid overseas. So lets say after all deductions are accounted for a corporation would pay 25% tax rate in the US but paid 20% in Germany. When they repatriate the money, they would pay only 5% to the US.

Also the US is one of the few countries that even taxes overseas profits. Why would you want to discourage repatriation that will get used in the local economy? (Capital investment, dividents and taxes on dividends, salaries, etc.) Taxes on overseas earnings is fucking dumb.

We already repatriated once and it did nothing to stimulate the economy. It just led to companies holding more money overseas hoping for more.

 

[Bronx-Man]

I don't think anyone here knew who you were quoting lol. I laughed though.

Really? It's like one of Romney's most famous quotes.

 

[Giant Panda]

So the smart thing to do would be to end worldwide taxation so these companies would bring most of that $2.1 trillion home. But nope, instead our tax code will remain shit and the money will stay overseas.

 

[Stinkles]

Most of it goes to the military and Medicaid and Medicare anyway.

I'm not saying this is not egregious, but wake me up when our federal spending priorities radically change, especially military spending, which is insane.

And some of those military companies hold their profits offshore. And megachurches who make paupers of the ignorant do so tax free.

 

[Earthstrike]

What incentive do they have to keep the money in the US or bring it back over here?

The opposite of the incentive they had to stow it away in the first place. The governmental outlook on what repatriation tax rates will be.

 

[Orbis Tabula]

I don't think anyone here knew who you were quoting lol. I laughed though.

I think they know, they're just responding to the notion anyway.

 

[CharlieDigital]

They enjoy a number of benefits afforded to them by operating in the U.S., mainly the court system. You can't use all the benefits of being in the United States, sell a product overseas, and then claim the US benefits had no part in your ability to do that.

Came to post this.

They benefit from government enforcement of IP rights both through the judicial system and through law enforcement.

They gain government protection through the FBI, for example, when there are hacks or attacks on their networks.

They gain from government treaties and government negotiated international agreements that enable better business environments for them and open new markets.

They gain from government grants for basic research and scholarships and loans to university students.

They gain from government enforcement of securities laws and ensure a stable, trusted market environment for capitalism to flourish.

They want all of the benefits of a strong federal government, but don't want to contribute to supporting these services.

 

[CassidyIzABeast]

That's a whole lot of Swiss bank accounts.

 

[badb0y]

Stuff happens

 

[Incarmine]

Here's an interesting thing I've noticed about people who cry about illegal immigrants taking tax dollars but don't say a peep about corporations storing money overseas. They all have a middle/high school boys clique sort of mentality. I'm talking about the kind of group that centers around the one cool dude or the guy who wins the most fistfights and talks the toughest. It dawned on me that these people are quick to idolize people who they perceive as stronger than them and embody traits of dominating over others.

Essentially they complain about illegal immigrants cause they're considered weaker than them, but praise big business and capitalism cause those elements are stronger and "tougher" than them.

In a sense, they're the combination of a gang mentality that picks on the weak, and of a sheep mentality that is easily lead by the strong. What the hell.

 

[Ziltoidia 9]

That's trifling next to the $21 trillion the super rich hide offshore . Let that number sink in.

Good god, I have no idea.

I've always detested the Right for saying the US debt is due to poor people. They say everyone born in the US right now is automatically 50-60k in debt because of the national debt. Bullshit. They love to call the left's calling for higher wages as socialism but when it comes to the national debt, it has to be shared equally? No, it doesn't. As far as I'm concerned the people with the most money owe the most to the national debt.

 

[DontBeThatGuy]

...But, but, food stamps.

 

[Ayt]

We should drug test these welfare recipients.

 

[GK86]

Poor corporations, barely making enough to stay alive.

 

[Pryce]

That's where the universal healthcare and free college tuition went.

 

[PhoenixDark]

Remember, we tried repatriation in 2004 and is was a massive failure.

Came in to say this. Stories like this always lead to calls for repatriation, especially during an election year. Pure bullshit.

 

[MidgarBlowedUp]

I wonder how, or if, the new TPP deal that just passed will affect this?

It's just sickening these companies can't just at least take a small portion of that money and give it to their own workers.

 

[PantherLotus]

What's funny is that $6.2B is such a tiny, tiny number compared to $2.1T.

 

[CharlieDigital]

What's funny is that $6.2B is such a tiny, tiny number compared to $2.1T.

$620B, yo.

Six hundred and twenty.

 

[Minus_Me]

My father was constantly pressured by his accountants to move money offshore. I'm happy that he never did.

Always said we didn't need more.

 

[Zultan]

What incentive do they have to keep the money in the US or bring it back over here?

A lot of it would go towards share buybacks or dividends. Which would help anyone with stock or a 401k.

This is where the US government is stupid. They could slash the rate, and make a good portion of the "potential" money lost back in dividend and capital gains taxes.

I say potential because the US government will not get the 35% rate because the money will never come over voluntarily at a 35% tax rate.

The question comes down to does the US government want a few hundred billion in taxes. Or do they want nothing? Apparently they want nothing.

 

[Troy]

But wait, I thought Tim Cook despised opportunists?

 

[Wuthering_Heights]

Those taxes are ridiculous.

No wonder they keep their money offshore.

 

[CharlieDigital]

Those taxes are ridiculous.

No wonder they keep their money offshore.

They never pay that rate.

That is a marginal tax rate. Then there is their effective tax rate after whatever deductions and write offs they can manage (usually, quite a lot).

 

[kitch9]

Hopefully no one falls for that personal level tax BS. Besides, shareholders get capital gains tax treatment, and if you got rid of that lol. If you keep it in place under the no corp tax system lol. The thought that companies will invest more for no reason except profit lol.

The moment it goes to personal level only and not corporation, everyone else's taxes goes up (like, everyone), and the rich continue to hide their money overseas, and the average American pays more in taxes yay~

That's the thing, how most tax systems work is that although Apple has a lot of billions in a bank somewhere it doesn't actually belong to anyone other than Apple in the eyes of the law as a company. The only time that money belongs to someone personally is when it is paid as a wage or a dividend to a shareholder. Some here seem to be implying that the billions in Apples name belong to someone and for tax purposes they don't it is Apple PLC's alone.

As a shareholder of a company I can't think I'm just going to give myself a few billion out of the Apple bank account today as its my money, because it isn't my money. The reason its sitting off shore is because as a company its more cost effective to keep the money in operating territories so you don't have to deal with exchange rates which can effectively make money disappear and fall foul to numerous potential tax hits from taking money from one place to another, and yes its tempting to utilise lower taxing countries more than the higher tax countries for certain things.

Its not as simple as bringing the money back just because a company was founded in America it is an American company, it will be potentially now dozens or hundreds of different companies set up in different counties with each following that specific countries tax laws.

A lot of it would go towards share buybacks or dividends. Which would help anyone with stock or a 401k.

This is where the US government is stupid. They could slash the rate, and make a good portion of the "potential" money lost back in dividend and capital gains taxes.

I say potential because the US government will not get the 35% rate because the money will never come over voluntarily at a 35% tax rate.

The question comes down to does the US government want a few hundred billion in taxes. Or do they want nothing? Apparently they want nothing.

This is a strong argument, what you are effectively saying is the US should become Bermuda. Maybe it should, its hugely complex in a worldwide economy, corporation tax is pretty much incompatible.

 

[ReAxion]

That's where the universal healthcare and free college tuition went.

No, it's all right here

And it sucks shit. http://foxtrotalpha.jalopnik.com/tag/f-35-saga

Merica

 

[Stinkles]

My father was constantly pressured by his accountants to move money offshore. I'm happy that he never did.

Always said we didn't need more.

Tell him thanks. Seriously. He's a patriot and a good person.

 

[titiklabingapat]

That's 7 to 10 high speed rail lines right there.

 

[Trail Guide]

Tell him thanks. Seriously. He's a patriot and a good person.

A patriot for paying taxes? No way. America was founded by rich men not wanting to pay taxes.

 

[Stinkles]

A patriot for paying taxes? No way. America was founded by rich men not wanting to pay taxes.

Twice, if the current crop has its way.

 

[CharlieDigital]

A patriot for paying taxes? No way. America was founded by rich men not wanting to pay taxes.

No, that's not quite accurate.

America was founded by rich men who were opposed to taxation without representation.

 

[Blader]

Damn, think of all the tanks we could buy with that!

 

[Bubba T]

My father was constantly pressured by his accountants to move money offshore. I'm happy that he never did.

Always said we didn't need more.

How can an accountant pressure their client to do anything? Strongly suggest, yes, but pressure? Nah.

 

[Minus_Me]

We're Canadian actually lol

Pressured might have been a wrong choice of words, my apologies.

 

[30yearsofhurt]

$2.1trillion?

I sincerely doubt it's that small.