11–20 of 215 posts
It's somewhat interesting (or just entertaining) that things large corporations have been doing for ages are gaining new attention because we can throw Apple's name into the mix.
They do this by following the tax laws; laws which we as a society have created in order to induce businesses to behave in certain ways.
So innovating the double Irish with a Dutch sandwich is "following" the law? It's more akin to hacking or circumventing them while still staying legal. Just because something is legal does not mean that it was the spirit of the law or the intention of society. That's why you see laws being changed to frequently to adapt to new scenarios and "innovations". Not to mention that society hasn't much of a say these days, C…
No matter the tax rate or how diligently one tries to fix loopholes, in a global world big corporations are going to dodge taxes (not always a bad thing). It's just that this is much harder for small companies who don't have armies of lawyers at their disposal, so it essentially creates an unfair advantage for bigger corporations (leverage) over startups and skews the economy towards the BigCo. This is why big corpor…
Our laws, and not just tax laws, were not created for a digital environment. Throw in multinational corporations spanning the globe and many laws fall apart. I honestly have no idea how that can be fixed nor have I read a realistic proposal to do so. Everyone says "close the loopholes" but I've never seen a list of proposed loophole changes that was viable.
Would a corporate "buffet rule" solve this? Let companies do whatever shenanigans they want, but if they operate in the US and earn > $1 billion they can't owe less than 15%?
The biggest problem with our tax laws is that they have moved from a way to raise income to being used to control behavior which results in "rule lawyering" to get the best deal. Simple rules mean actual income, complex rules means a lot of employment for accounts and lawyers to get a lower bill.
Earlier quoted context omitted.
So innovating the double Irish with a Dutch sandwich is "following" the law? It's more akin to hacking or circumventing them while still staying legal. Just because something is legal does not mean that it was the spirit of the law or the intention of society. That's why you see laws being changed to frequently to adapt to new scenarios and "innovations". Not to mention that society hasn't much of a say these days, C…
And yet, we are the ones who have voted for these people who have created this system. It's not like the voters are without agency; I can still vote for the nominee with $100 in her bank account even if her opponent has $1 trillion in his.
The fact that California has no tax jurisdiction in Nevada, and that the US has no tax jurisdiction in Ireland, is an unassailable fact of life. Tax laws are subject to regulatory competition like many other things, and ignoring that -- insisting that this is an issue of morality or fairness -- is silly.
If the US had a globally competitive corporate tax rate (say 15%), it would make most of these tactics irrelevant. There's no need to shelter income in Ireland if they have the same tax rates. Because of the reduced sheltering, such a reform would probably raise revenue on net. But even if it didn't, it would have many ancillary benefits, such as repatriating many billions of dollars in corporate profits and increasing the degree to which they are deployed in the US, which would far exceed the costs.
Even better would be to reduce corporate income tax to 0% and increase dividend and capital gains rates to personal-income-tax levels to make up for it. The main reason dividend income is treated preferentially in the US is that corporate profits are already being taxed (in theory). Those multi-level nature of the US tax code creates unnecessary loopholes, as well as costs and confusion. Counter-intuitively, eliminating the corporate income tax would make it much easier to tax corporate income, because those profits necessarily flow back to investors either in the form of dividends or capital gains. If you are a resident of the US (and california) and you own 1 apple share, you pay taxes on your share of Apple's income. Even better, it would be progressive. Rich people pay more, poorer people pay less.
Simple, right?
Would a corporate "buffet rule" solve this? Let companies do whatever shenanigans they want, but if they operate in the US and earn > $1 billion they can't owe less than 15%?
The "Buffet Rule" is a pretty good acknowledgement that our tax system is way too complicated, will end up like the problems the AMT is causing, and shows how broken the the discussion is on the news of "amount" and "rate".