Google, Apple and Others Push For Tax Holiday

[engine]

Google, Apple and Others Push For Tax Holiday [bloomberg.com]

As a coalition led by Apple Inc. (AAPL), Google Inc. (GOOG), and Cisco Systems Inc. (CSCO) presses for a tax holiday on more than $1 trillion in offshore profits, it is turning to a well-positioned lobbyist: Jeffrey Forbes, once chief of staff to Max Baucus, chairman of the tax-writing Senate Finance Committee.

Data compiled by Bloomberg News show that Forbes is part of an army of more than 160 lobbyists, including at least 60 who once worked for a sitting member of the House or Senate, pushing for the repatriation holiday. Their job is to persuade Congress to establish a tax break estimated to cost the U.S. government $78.7 billion over the next decade.

“This is an issue that involves a whole lot of people hired by corporations that are pushing for those corporate interests rather than the public interest,” said James A. Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington.

[wheel]

You shouldn't pay a penny more in taxes than necessary - but you should pay every penny owed.

Google's bullcrap manouevering around taxes by pushing money around internationally IMO is basically screwing the US and other countries out of taxes that are rightfully theirs.

I don't like paying taxes any more than anyone else, but when a large corp basically screws my country out of a large share of taxes that I perceived to be 'owed', well, frankly it's offensive. (not that they're doing it in my country to the best of my knowledge - but they're doing it to other countries, and it speaks to Google's ethics).

[incrediBILL]

Don't forget, corporations don't pay taxes, customers do.

If the government dips into their profits, they just raise prices.

Therefore, when you rag about these companies paying their due, it's really you paying reflected in higher prices.

[graeme_p]

@incrediBILL, depends on the circumstances. Increasing prices leads to lost sales, so it cannot be done that easily. If the market is not competitive the cost can be split with customers, if it is really competitive the it may not be possible to raise prices at all.

(not that they're doing it in my country to the best of my knowledge - but they're doing it to other countries, and it speaks to Google's ethics).

The problem is that everyone does it. At the very least MS even uses the same major tax haven (Ireland) as Google. Its a lot easier for them to do it than those who have physical products on which fair transfer prices can be established.

[johnhh]

What they mean is - they have evaded UK tax, a big market for these guys, and other countries taxes, , and all the cash , via Ireland and the Netherlands, is sitting in tax havens.

If they bring the money into the US they pay tax, if it stays where it is all they can do is
1. keep it there, or
2. use it to buy companies abroad. What they want to do is use the cash in the US.

If they pay US tax , well sorry guys, thats the deal, if they get exemption why not every one else, e.g Boeing and all American companies that sell overseas.

As I sell to the US, can I get exemption on that - think not.

By the way Twitter is also setting up in Ireland...

[graeme_p]

If they pay US tax , well sorry guys, thats the deal, if they get exemption why not every one else, e.g Boeing and all American companies that sell overseas.

As far as I know Boeing makes its plans in the US. If they sold the planes to an of-shore subsidiary cheap, and then resold at full price to customers they would probably be taxed on the full price. I am assuming that the US, like most countries, has tax rules about transfer pricing.

The problem is that it is much harder to apply these rules when no physical product in involved. Ireland is particularly attractive because EU rules mean that other EU members are restricted from taking action to prevent Ireland doing this (otherwise countries like the UK could just extend transfer pricing laws to cover this).

Its even easier for software companies. They can just license the EU copyright to an Irish subsidiary cheap, and then either sell from their, or sub-license to other EU subsidiaries at the higher rate.

[graeme_p]

The US does have another way of encouraging repatriation of these profits. Start taxing the profits of subsidiaries in low tax countries (the rate could be US rate minus local rate). Then there would be no incentive to keep the money offshore in the first place.

[jecasc]

If the government dips into their profits, they just raise prices.
Therefore, when you rag about these companies paying their due, it's really you paying reflected in higher prices.

Or it is your business paying more taxes, because those big companies evade taxes in a way you can not.

If a company comes forward and tells the government - hey we got a few billion offshore and want to bring it home without paying taxes - what lawmakers should do IMHO is say: Thank you for the information, we are going to tax you if you bring that money home or not and then pass a bill towards this end.

[johnhh]

@graeme_p You are correct - as I used to work for an airline, and was heavily involved in buying from Boeing, I can assure you all funds went straight to Seattle. It was my job to make sure the financed cash got there on time.

Oddly when you sit at Renton field and sign over the cash, you get a set of keys to a plane that has one hour on the clock !

They also gave you a life raft, in a wooden box with no way of opening it. All on a sale or return basis !

If you get the chance - the tour is great - the 747 assembly building is amazing.

[graeme_p]

Do you literal get keys to a plane handed over? Sounds very cool. Definitely better than a new car.

My point is that Boeing cannot get away with selling their planes at below cost to an Irish subsidiary, and then reselling to customers from there, so they sell from the US. Services (e.g. Google) and software (e.g. MS) companies can get away with it.

[johnhh]

I guess they could sell planes below cost - then just charge more for all the spares ( and some of those are very expensive), you can't get most of them from anyone else.

I think Rolls Royce engines already do that, as over the life span of an engine you are going to need spares, specialist inspections, rebuilds etc and thats where the real money is..

[lexipixel]

I'm a guy who was born in and lives in the USA.

Lately I've been thinking that I should move to another country for a couple years...

The plan is to give up my citizenship, get gender reassigned -- ala Chas(tity) NoBoneOh... then come back to the US and move to California, go to college as an illegal immigrant, (of course I'll get food stamps, a welfare apartment and free medical care while I'm in school).

With my new found status, I will claim all the benefits I can as a disabled, minority woman.

Next I'll start a company in New Hampshire or another state with no personal state income tax but register it as a Delaware Corporation.

I will get women owned business "set-aside" government contracts to produce my products, (which will include prevailing wage labor costs even though I'm going run a union-free shop).

I'll have my products' components manufactured in Mexico under NAFTA, then assembled just over the border using Privatized Texas Prison Labor, (so I can "legally" slap "Made in USA" stickers on the stuff).

Since everyone in the US really doesn't care about "Made In USA", maybe I'll just have the stuff made in China, then shipped to the US -- but I'll buy my own ship and get it a Liberian registration so I don't have to follow most international shipping laws.

I plan to sell everything online and tax free and have the payment processing done in the Cayman Islands.

I'll have my Cayman banker send my profits to a Swiss Bank account, (and have the Swiss bank send payments to purchase Costa Rica or Argentina ranch).

After I'm rich I am going to run for President of the USA on a "pro-business self made minority woman" platform.

Anyone want to invest in the business or donate to my campaign? I'll guarantee it will all be a write-off.