The public has a right to know how companies that pay no taxes pull it off
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Re: The public has a right to know how companies that pay no taxes pull it off
#2tldr; "If corporations are, in effect, U.S. citizens, surely their country is a stakeholder to whom they owe an obligation.... Based on public reporting, we calculate that in 2019, nearly 20 percent of large corporations that reported profits to shareholders of $100 million (or more) paid zero (or even negative) federal income taxes....
"there is no requirement for corporations to make public their taxable profits, or the ways in which they are avoided.... the IRS ... has since 2004 required the annual filing of Schedule M-3 .... this road map is available to the IRS alone, not to the public, who can hold companies accountable, nor to policymakers ...."
Re: The public has a right to know how companies that pay no taxes pull it off
#3I wonder how feasible it is for individuals (or groups of individuals?) in the US, to also incorporate themselves and, through the same or similar loopholes, also pay no tax...
How would the IRS respond in those instances.
Has that been tried? Is anyone aware of anything like that? Is the cost of such a scheme prohibitive for an individual vs. a large Corp? I'd be curious what the challenges and outcome of such an experiment would be.
Re: The public has a right to know how companies that pay no taxes pull it off
#4I wonder how feasible it is for individuals (or groups of individuals?) in the US, to also incorporate themselves and, through the same or similar loopholes, also pay no tax... How would the IRS respond in those instances. Has that been tried? Is anyone aware of anything like that? Is the cost of such a scheme prohibitive for an individual vs. a large Corp? I'd be curious what the challenges and outcome of such an ex…
It’s not expensive to incorporate, but full time employment can’t really be paid to an EIN. You need to be a contractor or a vendor.
Lots of people do it. Self employment comes with some risks, but if you own it, and convert your employment towards it, it can have benefits.
Its how landscapers drive F250s, for example.
Re: The public has a right to know how companies that pay no taxes pull it off
#5I wonder how feasible it is for individuals (or groups of individuals?) in the US, to also incorporate themselves and, through the same or similar loopholes, also pay no tax... How would the IRS respond in those instances. Has that been tried? Is anyone aware of anything like that? Is the cost of such a scheme prohibitive for an individual vs. a large Corp? I'd be curious what the challenges and outcome of such an ex…
LOL this is primarily why many self employed people eventually incorporate. Tax reduction.
You should try it some time.
Re: The public has a right to know how companies that pay no taxes pull it off
#6i am not in the US but "many" countries around the world use something called "MAT" or minimum alternate tax, wherein if you calculate taxes which is like zero or even a percentage lower than the limits mentioned, you are forced to pay MAT instead.
forced as in, you can claim a loss and all but you still pay MAT taxes which usually are around 18%.
Re: The public has a right to know how companies that pay no taxes pull it off
#7I wonder how feasible it is for individuals (or groups of individuals?) in the US, to also incorporate themselves and, through the same or similar loopholes, also pay no tax... How would the IRS respond in those instances. Has that been tried? Is anyone aware of anything like that? Is the cost of such a scheme prohibitive for an individual vs. a large Corp? I'd be curious what the challenges and outcome of such an ex…
People have tried and the problem is when you want to bring the money back to use it on something. Say you setup a licensing company on an island nation that use to then charge yourself $10,000 a month to license the software you wrote... that you transferred there. Now lets say you want to buy a house and you bring back a certain amount of money. That money is taxable and that is where people mess up they don't report it.
Big companies like Apple instead of bringing the money back they borrow billions of dollars at low interest rates. This lets them keep their money offshore where they invest it to make a bigger return then their interest rate on borrowing in the US.
Apple also has a routine for money in the US. You will find in Nevada Apple has an investment corporation. They will do the same thing, send the ownership of software to Nevada, charge their company in some xyz state (CA) and then they use that money in Nevada to invest it for more money then it costs them to borrow. So apple is covered both ways.
https://en.wikipedia.org/wiki/Braeburn_Capital#:~:text=Braeb....
https://www.businessinsider.com/how-apple-dodges-billions-in...
Re: The public has a right to know how companies that pay no taxes pull it off
#8[deleted]
Re: The public has a right to know how companies that pay no taxes pull it off
#9I wonder how feasible it is for individuals (or groups of individuals?) in the US, to also incorporate themselves and, through the same or similar loopholes, also pay no tax... How would the IRS respond in those instances. Has that been tried? Is anyone aware of anything like that? Is the cost of such a scheme prohibitive for an individual vs. a large Corp? I'd be curious what the challenges and outcome of such an ex…
People have tried and the problem is when you want to bring the money back to use it on something. Say you setup a licensing company on an island nation that use to then charge yourself $10,000 a month to license the software you wrote... that you transferred there. Now lets say you want to buy a house and you bring back a certain amount of money. That money is taxable and that is where people mess up they don't repo…
You're partly correct but here's an overview of what's really going on.
The money is "brought back" (if it even left) into segregated accounts in the US. Most of that US off-shore money is in New York to avoid currency risks, etc. Then those accounts are used as collateral (if needed. I doubt if anybody says to Apple, "Where's your collateral?") for loans.
Also, the biggest money havens in the world are 2 US states, with special privacy laws. All those guys playing games in Panama, etc. were better off just using US state tax shelters.
Re: The public has a right to know how companies that pay no taxes pull it off
#10i am not in the US but "many" countries around the world use something called "MAT" or minimum alternate tax, wherein if you calculate taxes which is like zero or even a percentage lower than the limits mentioned, you are forced to pay MAT instead. forced as in, you can claim a loss and all but you still pay MAT taxes which usually are around 18%.
If you claim a loss what are they taxing, revenue?