07.14.14
Too bad we’re not big enough to reincorporate in Ireland or some other tax cheat economy
Evergreen. Should still be a hit single. Would be, too, if more people (those still thinking that maybe someday they’ll be wealthy, too, so don’t dare cause unrest) didn’t find the simple truth so uncomfortable.
From the wire:
David Cay Johnston, a Pulitzer prize-winning reporter, now lecturer at Syracuse University’s law school and business school, tells Yahoo Finance that these moves are nothing new. “A lot of that money overseas is being siphoned out of the U.S. through accounting devices … because of a 1986 law … that lets companies build up profits tax-free…. A lot of big companies like Apple (AAPL) literally turn a profit off their taxes.”
Bloomberg reported in March that U.S. companies added $206 billion to their overseas stockpiles last year and Microsoft (MSFT), along with Apple (AAPL) and IBM (IBM) accounted for 18% of that total. And the Congressional Research Service says 47 U.S. companies have “inverted” since 2003–almost double the number in the previous 20 years.
From Nobel laureate Joseph Stiglitz:
This white paper outlines concrete policy measures that can restore equitable and sustainable economic growth in the United States, in the context of the country’s recurring budgetary crises …
Reforms to corporate and personal income taxes will be essential in restoring economic vitality. Examples include implementing financial transaction taxes; increasing corporate tax rates while incentivizing investment in the U.S. and closing loopholes; increasing taxes on rent-seeking …
Tax arbitrage has become a major and highly profitable activity for firms — an activity with no social returns but high social costs.
Apple has become the prime example of how a clever firm can use its ingenuity to avoid paying its fair share of taxes by attributing profits to corporations that are essentially stateless, existing only in cyberspace, and which pay taxes to no jurisdiction. What makes these actions by our tech companies so galling is that these companies’ profits exist, in no small part, because of basic investments by government, for instance in developing the internet and the browser. These companies show a willingness to take from what the public has provided but not to give back commensurately.
In detail and what to do about it, here.
No article from the tech business wire would be complete without someone chosen to explain how this corporate thieving is actually proper, because contrary to what the Nobel-winning economist has explained, America is totally unfriendly to its big corporations:
But Mattie Duppler, director of budget and regulatory policy at Americans for Tax Reform, Grover Norquist’s organization, says companies are just “trying to decrease their [tax] liabilities and be able to keep revenues at a place where they can continue to hire workers and continue to invest in [their] products…. but they can’t do that if they’re living in an environment that makes them globally uncompetitive and that’s what the United States is right now.”