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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

#61

Post by jusssi »

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

An alternative to attempting to tax companies, is to tax people.

There is no company that would just exist to forever eat money away from the public. Eventually they intend to pay the profits to a real person (either in money, or other benefits). Taxing that dividend or salary transaction might be simple enough to just work. And you have a real person to put to jail when the taxes were avoided.

Re: The public has a right to know how companies that pay no taxes pull it off

#62

Post by gnicholas »

wolco2 wrote: post #58
closeparen wrote: post #47

Earlier quoted context omitted.

If it's a real loophole, the government is out of luck; best it can do is remove it next year. When the money flowing through a corporation actually makes someone rich, it becomes his personal income. It's not clear that corporations paying their own taxes is even a good idea vs. collecting the same revenue through higher marginal tax rates on the beneficial owners.

Expensives can be hidden at the corporate level but used personally. The company plane can be used for both personal/business and those are hard to separate.

There are actually very detailed rules about how personal use of corporate planes needs to be reported for both tax purposes and shareholder reporting purposes.

Even if a plane is already going from City A to City B for business purposes, if the CEO brings a spouse along for personal reasons, there can be reporting consequences. Of course, this only matters if the company is under sufficient scrutiny to actually report such details.

Re: The public has a right to know how companies that pay no taxes pull it off

#63

Post by chii »

cblconfederate wrote: post #30

> The public has a right to know how companies that pay no taxes pull it off Not just that, they need cheap access to the same infrastructure.

unfortunately, it doesn't exist. Otherwise, if it does, then there's a way to arbitrage the extra money savings into a service that you can pay for (in lieu of tax).

The fact that such a service doesn't exist for the pleb individual means that this can't be done.

Re: The public has a right to know how companies that pay no taxes pull it off

#64

Post by wiz21c »

gnicholas wrote: post #32
ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

This is a case of economies of scale. A fairly wealthy person could save maybe $50,000 per year with the advice of the smartest tax lawyers and accountants in the world. But it would cost them $500,000 per year to pay for the structure to be created/updated. When I worked as a tax lawyer, we created structures and defended cases that saved our clients hundreds of millions of dollars. At this scale, paying for our ser…

Maybe it's a little too much to ask, but are why are you "not saying any of this is right or good".

Part of my brain wishes that law would actually mean justice but somehow, if I trust only what I know, I cleary cannot judge, as you do, if finance engineering is good or bad.

I'd like to know what prevents you to choose if it's good or right (as person who have worked inside the business)

thx

Re: The public has a right to know how companies that pay no taxes pull it off

#65

Post by wolco2 »

demadog wrote: post #34
redis_mlc wrote: post #9

Earlier quoted context omitted.

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,…

Which states are those?

Delaware to incorporate and East Texas to file patents?

Re: The public has a right to know how companies that pay no taxes pull it off

#66

Post by refurb »

chii wrote: post #52
juskrey wrote: post #45

Why no one ever mentions how much companies effectively contribute to various salary and employees income taxes? Corporate tax is practically nothing.

> employees income taxes? that's the employee's contribution, not the company's.

Right, but if the company didn't create the job, the income tax collected would be zero.

I'm not saying the income tax collected is purely coming from the company, but take Amazon for example - their economic activity creates jobs which pay salaries that are taxed.

Re: The public has a right to know how companies that pay no taxes pull it off

#67

Post by loosetypes »

vkou wrote: post #39
RhodoYolo wrote: post #24

Earlier quoted context omitted.

Why does US tax money coming back into the country and at what rate? Wouldn't you want to encourage money to be made elsewhere and brought back to the states for investment? or am i fundamentally misunderstanding economics?

US citizens are taxed on global income regardless of whether they live in the US, or whether any of their money will ever enter the US. It's only right for US corporations to be taxed the same way. Most of these insane financial contortions are done because they aren't taxed on foreign, non-repatriated earnings - creating an incentive to convert domestic earnings into 'foreign' ones, that get repatriated the next tim…

“The only major nation that taxes its citizens (and green card holders) regardless of where they live is the United States.”

“Some lists of countries that tax citizens and legal residents on their worldwide income include Libya, North Korea, Eritrea and the Philippines.”

Both from the first search result, https://premieroffshore.com/which-countries-tax-worldwide-in....

At least we’re in good company?

Re: The public has a right to know how companies that pay no taxes pull it off

#68

Post by gscott »

demadog wrote: post #34
redis_mlc wrote: post #9

Earlier quoted context omitted.

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,…

Which states are those?

South Dakota is one

Re: The public has a right to know how companies that pay no taxes pull it off

#69

Post by shadowmore »

supernova87a wrote: post #51

I'm not sure I understand (or agree with) his assumption that the full tax returns of corporations are private matters and always must be. That's a choice that Congress can make. If corporations are the way for entities to achieve individual profits without individual liabilities, then surely privacy is not the same concern as for individuals' tax returns. Why are corporations (whose structure is granted by law to re…

But our leaders aren't incentivized to do it, because our leaders are incentivized only by the very corporations in question.

As in, the corporations, through lobbying, quite literally write the legislation, not the people we actually elect to office.

So uprooting corporate tax info transparency rules is something that will never come to pass until other existing systems are demolished, but how do you get the legislators to legislate against their own self-interest?

Re: The public has a right to know how companies that pay no taxes pull it off

#70

Post by Cthulhu_ »

ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

> My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some loophole, I would go to prison. Why isn't the same standard applied to rich companies?

I know of one "gotcha" that works in my country at least: work for low / no wage but instead have loads of assets like stocks; dividend taxes are much lower than income taxes.

I could be wrong. I'm just reminded of people like the Google founders who humblebragged about only earning $1 / year in salary. They still became multi-billionaires off of stocks.

In my country, assets are taxed by a percentage of a percentage (they tax estimated return on investment, which is ridiculous if you only have a savings account that nowadays has either no interest or even negative interest). I think there should be an additional tax on any money or assets moving out of said investment account.

Because that's how rich people do it; they hardly pay any taxes because they have hardly any taxable income or assets. They put their house into a corporation or foundation, funnel any cash they need through various shell organizations and tax havens, etc.

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