Tech Firms Keep Piles of 'Foreign Cash' In US

[ElNono]

"There's a funny thing about the estimated $1.7 trillion that American companies say they have indefinitely invested overseas (http://online.wsj.com/article/SB10001424127887323301104578255663224471212.html), ' reports the WSJ's Kate Linebaugh (reg. or the old Google trick (http://searchengineland.com/wsj-pulls-back-on-what-google-searchers-can-read-for-free-112922)). 'A lot of it is actually sitting right here at home.' And if tech companies like Google and Microsoft want to keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, Linebaugh explains, this money is still overseas in the eyes of the IRS and isn't taxed as long as it doesn't flow back to the U.S. parent company. Helping corporations avoid the need to tap their foreign-held cash are low interest rates at home, which have allowed U.S. companies to borrow cheaply. Oracle, for instance, raised $5 billion last year, paying an interest rate roughly two-thirds of a percentage point above the low post-crash Treasury yield (http://www.forbes.com/sites/steveschaefer/2013/01/15/fitch-renews-warning-to-u-s-raise-debt-ceiling-or-risk-rating-cut/), about 2.5% at the time (by contrast, grad students and parents pay 6.8%-7.9% for Federal student loans (http://www.direct.ed.gov/calc.html)). Were the funds it manages to keep in the hands of its foreign subsidiaries brought home and subjected to U.S. income tax, Oracle estimated it could owe Uncle Sam about $6.3 billion."

[Wild Cobra]

How much might it help our employment situation if corporations didn't pay taxes?

[boutons_deux]

How much might it help our employment situation if corporations didn't pay taxes?

they're sitting on $Ts in cash, and official unemployment is still very high.

[boutons_deux]

4 Key Things To Know As Republicans Prepare To Unveil Their Corporate Tax Reform Plan (http://thinkprogress.org/economy/2013/01/24/1489521/4-things-republicans-corporate-tax-reform/)


– Corporate profits are at record highs, while corporate taxes are at record lows. While the U.S. has a 35 percent corporate tax rate on paper, few corporations actually pay that, due to a proliferation of loopholes, deductions, and the widespread use of tax havens. In 2011, the last year for which data is available, the effective corporate tax rate fell to 12.1 percent (http://thinkprogress.org/economy/2012/02/03/418171/corporate-taxes-40-year-low/), a forty-year low. The corporate tax used to track resonably well with corporate profits, but the two have become decoupled (http://thinkprogress.org/economy/2012/12/10/1308981/chart-corporate-profits-skyrocket-while-corporate-taxes-plummet/) in recent years, with profits shooting up while corporate taxes as a share of the economy plummeted.

– Many of the biggest corporations pay no corporate income tax at all. As Citizens for Tax Justice has found, many of the biggest corporations have effective tax rates near zero. 26 major corporations paid no corporate income tax between 2008 and 2011, while making a collective $205 billion in profits (http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/).

– The GOP’s favorite corporate tax idea helps outsource jobs. Republicans love to (http://thinkprogress.org/economy/2012/02/24/431897/dave-camp-offshore-taxes/) promote (http://www.reuters.com/article/2013/01/24/us-usa-tax-financialinstruments-idUSBRE90M1MV20130124) a “territorial” corporate tax system, under which offshore profits made by U.S. companies are never taxed. (Currently, those profits are taxed when they are brought back to the U.S.) The Congressional Budget Office recently reported that such a plan results in “increasing incentives to shift business operations (http://thinkprogress.org/economy/2013/01/09/1424841/gop-overseas-jobs/) and reported income to countries with lower tax rates.”

– Corporate tax reform should raise revenue. Corporate taxes used to make up about one-third of federal revenue; now it makes up less than 9 percent (http://thinkprogress.org/economy/2012/12/10/1308981/chart-corporate-profits-skyrocket-while-corporate-taxes-plummet/). The U.S. used to raise about 5 percent of GDP in corporate tax revenue; now it raises below 2 percent (http://www.whitehouse.gov/omb/budget/Historicals). As former White House economist Jared Bernstein noted, “locking in these historically low revenue levels, either as a share of GDP, total receipts, or profits, would be yet another self-inflected wound (http://jaredbernsteinblog.com/corporate-tax-reform-should-be-revenue-positive/).”

http://thinkprogress.org/economy/2013/01/24/1489521/4-things-republicans-corporate-tax-reform/

[boutons_deux]

then there's TAX EXPENDITURES to the worlds' most profitable industry

Fossil Fuel Subsidies to Cost US 113,000,000,000 in Next 10 Years (Not Including Climate & Health Damage) without Change (http://cleantechnica.com/2012/05/21/fossil-fuel-subsidies-to-cost-us-113000000000-in-next-10-years-not-including-climate-health-damage-without-change/)

Sen. Bernie Sanders and Rep. Keith Ellison launched a new piece of legislation that would repeal $113 billion of tax-breaks, handouts, and subsidies for the fossil fuel industry over the next 10 years.

Not only is fossil fuel the richest industry on earth, but any of us who pay taxes write it a hefty check each year. It’s as if we’re paying them a performance bonus for wrecking the climate. We’ll never get to renewable energy if we keep handing gobs of money to oil and coal and gas.

The bill would strip away these outrageous subsidies. As you can imagine, the fossil fuel industry is going to fight back hard, so we need to come out as strong as possible.

http://cleantechnica.com/2012/05/21/fossil-fuel-subsidies-to-cost-us-113000000000-in-next-10-years-not-including-climate-health-damage-without-change/

[DMC]

Interesting article.

There's such a complex set of variables regarding taxation that it's hard to decipher, however there's the possibility that the 6 billion in instant revenue would be lost in other areas. More money in the hands of private businesses means more employees which means more taxable incomes.

All in all, I prefer that money remain in the private sectors. The feds don't do anything but redistribute it anyhow and quite often to people and countries who don't pay into it.

To answer WC: It's not our employment situation that's the problem, it's how much money we can keep and what that money is worth. Your proposal has the employees paying a greater share, which would bring everyone down except corporations. There's a balance that has to be achieved and right now small start up businesses are struggling because of taxation. There needs to be an adjustment to the number of employees a small business can have, making it exempt from additional taxation.

[coyotes_geek]

Okay thinkprogress, if you believe this.......


– The GOP’s favorite corporate tax idea helps outsource jobs. Republicans love to (http://thinkprogress.org/economy/2012/02/24/431897/dave-camp-offshore-taxes/) promote (http://www.reuters.com/article/2013/01/24/us-usa-tax-financialinstruments-idUSBRE90M1MV20130124) a “territorial” corporate tax system, under which offshore profits made by U.S. companies are never taxed. (Currently, those profits are taxed when they are brought back to the U.S.) The Congressional Budget Office recently reported that such a plan results in “increasing incentives to shift business operations (http://thinkprogress.org/economy/2013/01/09/1424841/gop-overseas-jobs/) and reported income to countries with lower tax rates.”

......what should we expect to happen if we do this............


– Corporate tax reform should raise revenue. Corporate taxes used to make up about one-third of federal revenue; now it makes up less than 9 percent (http://thinkprogress.org/economy/2012/12/10/1308981/chart-corporate-profits-skyrocket-while-corporate-taxes-plummet/). The U.S. used to raise about 5 percent of GDP in corporate tax revenue; now it raises below 2 percent (http://www.whitehouse.gov/omb/budget/Historicals). As former White House economist Jared Bernstein noted, “locking in these historically low revenue levels, either as a share of GDP, total receipts, or profits, would be yet another self-inflected wound (http://jaredbernsteinblog.com/corporate-tax-reform-should-be-revenue-positive/).”

[/INDENT]

...........?

lol thinkprogress.

[Wild Cobra]

they're sitting on $Ts in cash, and official unemployment is still very high.
Yes, but didn't I read that once they move it to the US they have to pay taxes on it? What if those taxes were gone?

Maybe I misread it. I did scan the article fast.

[Wild Cobra]

To answer WC: It's not our employment situation that's the problem, it's how much money we can keep and what that money is worth. Your proposal has the employees paying a greater share, which would bring everyone down except corporations. There's a balance that has to be achieved and right now small start up businesses are struggling because of taxation. There needs to be an adjustment to the number of employees a small business can have, making it exempt from additional taxation.
Tax revenue is not static, and I forget how much it is, but isn't corporate taxation only about 20% of tax revenue? I have yet to see that no matter what we do with the tax code, that federal income tax revenue changes outside of a small range at 18.3% of GNP. The revenue problem, I contend, is not a tax rate problem, but a economic health problem. We need more tax payers, not a larger tax rate.

[DMC]

Tax revenue is not static, and I forget how much it is, but isn't corporate taxation only about 20% of tax revenue? I have yet to see that no matter what we do with the tax code, that federal income tax revenue changes outside of a small range at 18.3% of GNP. The revenue problem, I contend, is not a tax rate problem, but a economic health problem. We need more tax payers, not a larger tax rate.

Which is why I disagreed with corporations not paying any taxes. The taxes need to be reasonable to spur growth, not at punitive levels. Some corporations will not hire Americans even if they paid no taxes. They operate on the bottom line, no taxes just means more subsidiaries abroad.

[ElNono]

The con job is that they keep these 'technically foreign' dollars in the US under the protection of the US banking system. If you or I try to pull something like that, we gotta bring the money in and pay taxes on it. It's bullshit and more corporate welfare. If they don't want to bring the money in and pay what they owe, then have them keep the money in the bank of china/france/spain/venezuela/etc...

[boutons_deux]

PROGRESSIVE site with the 60-year history of US tax rates and revenues

http://www.americanprogress.org/wp-content/uploads/issues/2011/06/pdf/low_tax_graphs.pdf

[Wild Cobra]

Which is why I disagreed with corporations not paying any taxes. The taxes need to be reasonable to spur growth, not at punitive levels. Some corporations will not hire Americans even if they paid no taxes. They operate on the bottom line, no taxes just means more subsidiaries abroad.
True, but taxes are part of what reduces the bottom line. Less taxation and a corporation can be more competitive globally. Not saying it's the fix for all things, but6 it would make the difference for some corporations to manufacture again here, and would keep some from leaving and shutting down.

[The Reckoning]

i pay 7.9% interest in federal student loans and im studying outside the country. gotta love irony.

[DMC]

True, but taxes are part of what reduces the bottom line. Less taxation and a corporation can be more competitive globally. Not saying it's the fix for all things, but6 it would make the difference for some corporations to manufacture again here, and would keep some from leaving and shutting down.

I addressed that too. "Competitive globally" just means hiring more workers overseas and moving American jobs there.

[boutons_deux]

True, but taxes are part of what reduces the bottom line. Less taxation and a corporation can be more competitive globally. Not saying it's the fix for all things, but6 it would make the difference for some corporations to manufacture again here, and would keep some from leaving and shutting down.

You are arguing for lowering corporate taxes while they are sitting on $Ts in cash and NOT hiring enough to fill the 8M+ missing jobs.

You are arguing for lowering corporate taxes below their lowest tax payments in 60 years.

You are arguing for lowering corporate taxes so US can "compete" with shitty countries like India and China, bringing their shitty conditions for employees and environment back to USA.

[coyotes_geek]

You are arguing for lowering corporate taxes while they are sitting on $Ts in cash and NOT hiring enough to fill the 8M+ missing jobs.

You are arguing for lowering corporate taxes below their lowest tax payments in 60 years.

You are arguing for lowering corporate taxes so US can "compete" with shitty countries like India and China, bringing their shitty conditions for employees and environment back to USA.

How would higher corporate taxes affect each of these three situations?

[ElNono]

How would higher corporate taxes affect each of these three situations?

Well, for one it would help pay for the ever-extending unemployment checks...

[coyotes_geek]

You are arguing for lowering corporate taxes while they are sitting on $Ts in cash and NOT hiring enough to fill the 8M+ missing jobs.

You are arguing for lowering corporate taxes below their lowest tax payments in 60 years.

You are arguing for lowering corporate taxes so US can "compete" with shitty countries like India and China, bringing their shitty conditions for employees and environment back to USA.
How would higher corporate taxes affect each of these three situations?

:wakeup

[boutons_deux]

:wakeup

I'll bitch-slap you later today. Wait for it.

[TeyshaBlue]

I'll bitch-slap you later today. Wait for it.

What? thinkprogress hasn't told you how to answer CG yet?:lmao:lmao:lmao:lmao:lmao:lmao:lmao:lmao:lmao

[coyotes_geek]

You are arguing for lowering corporate taxes while they are sitting on $Ts in cash and NOT hiring enough to fill the 8M+ missing jobs.

You are arguing for lowering corporate taxes below their lowest tax payments in 60 years.

You are arguing for lowering corporate taxes so US can "compete" with shitty countries like India and China, bringing their shitty conditions for employees and environment back to USA.How would higher corporate taxes affect each of these three situations?:wakeupI'll bitch-slap you later today. Wait for it.

:wakeup

[boutons_deux]

"You are arguing for lowering corporate taxes while they are sitting on $Ts in cash and NOT hiring enough to fill the 8M+ missing jobs.

You are arguing for lowering corporate taxes below their lowest tax payments in 60 years.

You are arguing for lowering corporate taxes so US can "compete" with shitty countries like India and China, bringing their shitty conditions for employees and environment back to USA."

higher corporate taxes encourage investment (to avoid paying the taxes) which the 99% benefits from while lower taxes encourage management and investors to pocket the profits (which benefits only the accumulation/concentration of wealth by the 1%).

Germany is high-tax, high-cost, unionized (unions sit in corporate boards), "socialized" county that lives off its booming export market, even in the face of Asian competition.

[coyotes_geek]

If higher corporate taxes encouraged domestic investment, then corporations wouldn't be stashing all their money overseas in lower tax countries. All raising corporate taxes would do in this country is give multinationals even more incentive to outsource and/or invest elsewhere.

BTW, Germany has a lower corporate tax rate than the U.S. does.

[boutons_deux]

"corporations wouldn't be stashing all their money overseas in lower tax countries"

they're at best avoiding already low taxes, and in many cases, criminally evading taxes.

Almost NO large corporations pay 35% tax, and some even get paid by the IRS.

[coyotes_geek]

Right. They're successfully avoiding the taxes. Raising those taxes further only provides additional incentive to keep avoiding them. Ergo, raising corporate taxes doesn't accomplish anything.

[boutons_deux]

Right. They're successfully avoiding the taxes. Raising those taxes further only provides additional incentive to keep avoiding them. Ergo, raising corporate taxes doesn't accomplish anything.

35% is a good number, but CLOSING THE LOOPHOLES and stopping gaming of the tax system is how to increase revenue without going beyond 35%.

[coyotes_geek]

I like Germany's 15% corporate flat tax rate better. Better to be the country foreign multinationals want to stash their money in instead of the country domestic multinationals want to avoid.

[boutons_deux]

I like Germany's 15% corporate flat tax rate better. Better to be the country foreign multinationals want to stash their money in instead of the country domestic multinationals want to avoid.

Do you know anything about German tax loopholes for corporations? or about MANDATORY German corporate contributions to employee health and retirement plans?

[coyotes_geek]

What about 'em?

[boutons_deux]

What about 'em?

Typically in Europe, employers have to make much higher health insurance/pension contribution than in the US. So looking exclusively at Euro corporate income tax vs US is not the entire picture you wish it were.

[coyotes_geek]

Sure it is. Pension & benefits =/= taxes.