How Offshore Tax Havens Save Companies Billions
I'm posting this with no commentary, only as information. I was always curious how this worked and thought someone else might be.
I think it's safe to say, no matter how you feel about politics, that the loss of this revenue to our nation affects us all. Render unto Caesar..etc..
Disgusting. But lets defund NPR and Planned Parenthood to save 5% of that. When are they going to stop making cuts based on ideaolgy and make cuts/close loopholes that would actually help the budget?
I don't think I can use the Googles and still feel ethical now.
I do some work for a company that runs hospitals in the U.S. On paper - and through a circuitous route, the company is owned by a Hungarian trust - along with about 35 associated businesses like real estate (hospitals lease the land), medication purchasing, a company to administer 401k funds, an equipment leasing company, etc...
One thing the reporter got wrong - the companies have no interest in bringing the money back - wherever it gives them the best return is where it stays. The wealthy folks I've run across have allegiance to their wealth, not any particular country. Many are good business people - they work within the rules and are admired by people for the great work they do. They have no qualms about exploiting the rules to the fullest extent and have no qualms about influencing whomever to change the rules as needed. Paying $25k for dinner with the POTUS is a dawdle.
A few years ago the U.S. Virgin Islands wanted to promote investment and development - they offered a corp. tax rate of 7.5% if key shareholders established residency, opened a corp. office and hired at least 7 people. So the key shareholder owns a nice house overlooking megan's bay and has an empty office in St. Thomas. Seven people got lucky and get paid whether they show up or not. When that deal went south because all the companies that took advantage of the rule did the same thing, the money went to Switzerland then Liechtenstein and on to Romania and Hungary.
The big picture is that for a company that gets big enough - the world becomes a big market to shop for the best deals on where to keep your cash. If the U.S. isn't competitive, the money leaves. The people that get stuck with the tab are the ones that don't have enough cash to go find a better deal.
I am really not sure what you can do about it though. Companies will always look for the best deal (it's what they do). Even if you lower taxes in the US, there almost certainly will be someone lower.
I guess you can intact some sort of tariff on non-US based (tax paying) companies that sell in the US. Sort of a sales tax on companies? Probably a nightmare to calculate... more IRS agents....
It's almost to the point (sort of a Occam,s razor kind of thing) that you just eliminate tax on companies at a certain size (they aren't paying it anyway). Maybe that keeps more money in the US. Does that help? I don't know. Doesn't help the governments cash flow problem though.
oldtin wrote:One thing the reporter got wrong - the companies have no interest in bringing the money back - wherever it gives them the best return is where it stays. The wealthy folks I've run across have allegiance to their wealth, not any particular country. Many are good business people - they work within the rules and are admired by people for the great work they do. They have no qualms about exploiting the rules to the fullest extent and have no qualms about influencing whomever to change the rules as needed.
Change "wealth" to "lap times" and "country" to "car" - that becomes a fairly accurate description of racing. Nobody seems to have a problem when racers behave this way... yet it's Teh Evil Fat Cats when we're talking about money.
It's such a pity that government refuses to believe that the way out of this mess is to make simple, fair rules that are easy to apply. Instead we get more and more layers of arcane, byzantine regulations that are impossible to comply with and impossible to police.
Duke wrote: Change "wealth" to "lap times" and "country" to "car" - that becomes a fairly accurate description of racing. Nobody seems to have a problem when racers behave this way... yet it's Teh Evil Fat Cats when we're talking about money.Changing "country" to "car" changes the subject (object? Rules of grammar aren't my strong suit) from an interconnected group of people whose lives are affected by that allegiance to a pile of metal. Nobody owes allegiance to a car.
It's such a pity that government refuses to believe that the way out of this mess is to make simple, fair rules that are easy to apply.Ah, simple and fair. I like that... I'm not sure whether it's possible, or if possible whether we can get there in any direct path from here. But I like the idea.
Duke wrote:....It's such a pity that government refuses to believe that the way out of this mess is to make simple, fair rules that are easy to apply. Instead we get more and more layers of arcane, byzantine regulations that are impossible to comply with and impossible to police.
A noble idea, but the reason why many of these laws are convoluted is because people (companies) are constantly finding little holes and work arounds that need to be plugged.
The racing analogy is actually pretty good. You know how racing is always most interesting when it is just starting, before the teams have figured out the "best" solutions and found all the holes in the rules, causing more rules. Eventually you end up with NASCAR (the socialism of racing?).
Go the other way (lets say CanAm). All very interesting, until someone figures out you can just pour cubic money into the cars and dominate until there is no one left to complete (the robber barons of racing?)
As with many thing, the ideal lies somewhere in between. But I do agree... given no obvious solution, simpler is better.
Cone_Junky wrote:Disgusting. But lets defund NPR and Planned Parenthood to save 5% of that.
Taxing corporations is sneaky double taxation on income. Not a fan.
Osterkraut wrote:Taxing corporations is sneaky double taxation on income. Not a fan.
I would like to buy you the next round! I could never figure out why people don't understand this.
Dude...
That story is soooo Last Year.. Even Gawker had a story on it back then....
http://gawker.com/#!5670018/googles-3-billion-tax-dodge
The country really needs to decide on the level of services it wants, then fund them properly.. Not determine the level of funding and the level of services independently.... That's like trying to buy filet mignon on a PBJ budget. Ohh wait that's what the Mastercard is for.......
z31maniac wrote:Ive got the 2nd round...Osterkraut wrote:Taxing corporations is sneaky double taxation on income. Not a fan.
I would like to buy you the next round! I could never figure out why people don't understand this.
I've posted on here several times ... other threads .... that companies don't pay taxes... big companies, little companies, middle sized companies... they pass the cost of taxes on to us ... always have and always will... otherwise they eventually go out of business
since others are now pointing this out.. I'll buy the 3rd round 
