61–70 of 80 posts
Earlier quoted context omitted.
Do you have a source on this? I'd love to read more about this.
I wish I did. I heard about it because I used to work with someone who had worked there some years previous.
Earlier quoted context omitted.
I wish I did. I heard about it because I used to work with someone who had worked there some years previous.
I'm vaguely aware of Citi's tax plan, but I'd have to look into it. If I can learn the details, I'll start a series of case studies that break down the tax strategies of different fortune 500 companies.
Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".) Another handy related idea would be to have a maximum income multiplier. Something like "the highest paid employee cannot make more than 20x the lowest paid in total compensation", so if you want to make one million…
Earlier quoted context omitted.
The problem goes far beyond Google Ireland and Google Netherlands. What about Tata, Reliance, Baidu and Guinness? None of them pay their fair share to the US government. Something must be done about these evil corporations which exist outside the US, don't bring money into the US, do no business in the US, and pay no taxes in the US!
Would google exist if not for investments in education and r&d made by US taxpayers over the past 50 years?
Just searching "Double Irish" should explain it well enough. http://www.google.com/search?q=double+irish
However, it is not the case that Google only pays 2.4% of their US operating profit to the IRS, as a look at Note 15 of their 10K shows. There are lots of reasons that a corporation's effective tax rate will differ from the statutory tax rate of 40% (35% federal + ~5% state). To name a couple of common ones:
1. Prior net operating losses (net of valuation allowances)
2. Stock option exercises by employees (see 1999-2000 when over 50% of major tech companies' cash flows were from option exercise, and lots of them--entirely legally--paid zero or "negative" tax, or so it appeared; in reality, the taxes were just paid out of a different pocket). There is a bill in Congress to remove this deduction.
3. Adjustments for overseas taxes paid
4. Use of NOLs, impairment charges, changes in valuation allowances, lots of technical items.
Some of the entries in Note 15 of GOOG's latest 10K that lowered its provision for US income taxes (effective rate) in the current period include:
- Foreign rate differential (due to tax treaties with foreign countries, income taxed overseas is often not taxed again in the US)
- Federal research credit
- Tax exempt interest (interest from tax exempt bonds)
(Search for "Note 15" here: http://edgar.sec.gov/Archives/edgar/data/1288776/00011931251...)
The rest of Note 15 elaborates on their capital losses from investments, impairments of acquired goodwill, etc. Tax disclosures are some of the most complicated areas of financial statements, and they're very easy to misread. However, they can be very informative, as tax info can provide a window into the difference between accrual-based earnings and cash inflow/outflow.
Just for future reference, NOTHING in a financial statement is what it seems until you read the notes, period. That is the first thing they teach you in financial accounting.
Think of it as the equivalent of a typical developer's reaction to a blog post claiming "X outperforms Y"--usually, the first comment is "did you take into account setting Z?" The footnotes contain "setting Z."
The presence of ambiguities in the system breeds mistrust among the citizenry. This cannot be healthy for society.
Back when Commodore was a company I had the opportunity to get a look at its tax structure (I was interviewing for a VP position with the parent company). It was pretty impressive how effectively one could exploit nominal loop-holes in various jurisdiction tax codes to achieve near zero taxation. One of the more dubious strategies was having a company in the Cayman Islands that owned the cars that people drove and pa…
Lol. It sounds like I worked with your friend. I'd like to note that the US is also a noted tax haven for foreign countries. We aggressively allow our country act as a tax shield for European and Asian companies so we should be throw rocks either when we live in a glass house
Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".) Another handy related idea would be to have a maximum income multiplier. Something like "the highest paid employee cannot make more than 20x the lowest paid in total compensation", so if you want to make one million…
Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".) If corporations don't pay taxes, then won't everybody who can afford to just do all their business (income and all) through shell corporations? Sort of the way that currently wealthy people skirt the estate tax by ha…
If you also eliminate income taxes and shift completely to consumption-based taxes, it gets a lot harder for wealthy people to avoid taxes; in fact, the only way to avoid consumption taxes is to live the lifestyle of a less-wealthy person. Even illegal sources of income get taxed when you switch to a consumption-based tax system: you can't tax the income of a gangster with no declared income, but you can tax all of the shiny stuff he buys. Regardless of the source of income, the same truth applies: if you want to enjoy your wealth, you will end up paying taxes on it.
Of course, some wealthy people will choose to live more frugal lifestyles in order to avoid taxes (many wealthy people already do so, for a variety of reasons). The reduced consumption might hurt the economy some, but they have to put their money somewhere, and that somewhere is generally some sort of investment, which helps the economy.
The biggest problem with consumption-based taxes is that they tend to be highly regressive because there is generally an inverse relationship between income and the percent of income spent on consumption. However, there are ways to correct for this. You can target specific categories of goods which only the wealthy can afford (the aforementioned "yacht tax,"), but this tends to be very destructive to those industries and can cause big distortions throughout the rest of the economy. You can exempt certain categories of goods, such as groceries and other basic necessities, but this also creates huge distortions, and also creates a situation where industries buy politicians in order to get their products exempted. Another approach is to offer rebates equal to the consumption taxes paid by a typical low-income family, so that such families will pay zero net tax, but that's complex and expensive to administer.
Actually, no company _really_ pays taxes. Taxes are another cost of doing business which is passed on to the consumer