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What a company owes in taxes on a given year is going to be greatly influenced by their profit/loss...
When the company does shitty the country gets less money... thats the only reason obama gives a shit about the economy... so he can collect taxes... to give money away free to the people that vote for him.
Then why is he doing everything that makes the economy worse?Quote:
Originally Posted by Sec24Row7
for example:Quote:
Originally Posted by coyotes_geek
http://www.theguardian.com/business/...-senate-reportQuote:
One of the world's biggest manufacturing companies diverted more than $8bn in profits to Switzerland in order to avoid US taxes, according to investigators working for the Senate.
Caterpillar, the world's largest maker of construction and mining equipment, allegedly avoided paying more than $2.4bn in US taxes over a decade by striking a deal with Swiss tax authorities to pay as little as 4% on the profits from its lucrative international spare parts business through a Geneva-based subsidiary.
Though the practice of basing such subsidiaries offshore is widespread among multinationals, and Senate investigators refused to say whether they believe the company broke US tax law, the elaborate accounting strategy appears to take so-called 'transfer pricing' practices to new extremes.
The report, which was produced by the Senate subcommittee on investigations under chairman Carl Levin, a Michigan Democrat, claims that 85% of Caterpillar’s international profits from selling parts – its most profitable activity – were routed through its Swiss subsidiary, even though the vast majority of associated manufacturing, research and employment remained in the US.
"$8bn in profits to Switzerland in order to avoid US taxes"
avoiding taxes isn't illegal, it's how the tax code is rigged by the evaders. Avoiders, eg Caterpillar and its bankers/accountants, don't a give a shit about such publicity. They've got their $Bs.
evading taxes is illegal, but somehow the NSA's prying snoops are not snooping personal/corporate tax evaders.
My guess is that there are plenty of NSA snoops who know so much about networks, etc that they are tax avoiders/evaders themselves.
Defending the company’s use of the Swiss tax strategy, Julie Legacy, who oversees Caterpillar’s tax operations, argued that “we cannot remain competitive, we cannot create jobs, and we cannot increase exports by incurring unnecessary expenses.”
She added, “And as an American company, we pay the taxes we owe, not more.”
http://www.nationalmemo.com/senate-d...tax-avoidance/
I'm sure the Repugs adore Caterpillar for being one hardass, vindictive, punitive Warrior on Employees
http://www.jsonline.com/business/caterpillars-tough-labor-negotiation-reaches-milwaukee-qo9q5h5-206221231.html
http://billmoyers.com/2014/04/03/an-...te-tax-breaks/Quote:
An army of corporate lobbyists is trying to push a huge package of tax cuts through Congress without drawing public attention.
The 55 cuts, known on Capitol Hill as “extenders,” expired at the end of 2013 but in the past have been renewed retroactively on a bipartisan basis with little fanfare. Altogether, according to the Congressional Budget Office, they could cost the federal government $46 billion in revenues in 2014 and as much as $700 billion over the next 10 years. While some of the breaks would help working people, 90 percent of them would benefit the bottom lines of large, US-based multinationals.
A report released on Monday by Americans for Tax Fairness and Public Campaign calculates that, “1,359 individual lobbyists swarmed Capitol Hill to press members of Congress on the issue between January 2011 and September 2013.” Lobbyists appeared “12,378 times in quarterly lobbying reports in the period studied – each report representing from one to dozens of contacts with members of Congress and their staffs during the quarter it was filed.”
Arguably the most controversial of these tax breaks is known as the Active Financing Exception loophole (AFE), which allows companies to avoid paying taxes on interest and dividends earned on overseas cash. Lobbying for the AFE has been especially intense.
Dubbed the “GE loophole” by critics, the report says that General Electric “employed 48 lobbyists to work on tax extenders and… the AFE” — more than any other corporation. The authors note that while ”it is not possible to know how much the AFE saves GE,” the loophole played a significant role in the company paying “less federal income taxes than an average American family pays in one year” on profits of $27.5 billion earned between 2008 and 2012.
According to the report, “58 percent of the lobbyists who worked on tax extenders have passed through the revolving door – they have worked for Congress or the executive branch.” They include former Sen. John Breaux (D-LA) — who sat on the Senate Finance Committee — and former Senate Majority Leader Trent Lott (R-MS).
the report:http://www.americansfortaxfairness.o...Loophole-3.pdf.
http://www.americansfortaxfairness.o...Loophole-3.pdf. .Quote:
The intensity of lobbying on tax extenders is startling.These lobbyists appeared12,378 times in quarterly lobbying reports in the period studied – each report representing from oneto dozens of contacts with members of Congress and their staffs during the quarter it was filed
lobbyists as proxies "voting" for their employers in the "voting booths" of Congressional offices, where their "votes" count 100s of times more than Human-Americans' votes.Quote:
Originally Posted by Winehole23
Blantant quid pro quo corruption.
btw, America is more fucked today than yesterday, and therefore much more unfuckable.
http://gabriel-zucman.eu/files/Zucman2013QJE.pdfQuote:
THE MISSING WEALTH OF NATIONS: ARE EUROPE AND
THE U.S. NET DEBTORS OR NET CREDITORS?*
Gabriel Zucman
This article shows that official statistics substantially underestimate the
net foreign asset positions of rich countries because they fail to capture most of
the assets held by households in offshore tax havens. Drawing on a unique
Swiss data set and exploiting systematic anomalies in countries’ portfolio
investment positions, I find that around 8% of the global financial wealth of
households is held in tax havens, three-quarters of which goes unrecorded. On
the basis of plausible assumptions, accounting for unrecorded assets turns the
eurozone, officially the world’s second largest net debtor, into a net creditor. It
also reduces the U.S. net debt significantly. The results shed new light on
global imbalances and challenge the widespread view that after a decade of
poor-to-rich capital flows, external assets are now in poor countries and debts
in rich countries. I provide concrete proposals to improve international statis-
tics.
JEL
Codes: F32, H26, H87.
I. Introduction
There are two puzzles in international investment statistics.
The first is a set of statistical anomalies. At the global level,
liabilities tend to exceed assets: the world as a whole is a net
debtor (Lane and Milesi-Ferretti 2007). Similarly, the global bal-
ance of payments shows that more investment income is paid
than received each year. Since the problem was identified in
the 1970s, the International Monetary Fund (IMF) has commis-
sioned a number of reports to investigate its causes, and national
statistical agencies have put considerable resources into improv-
ing their data. Yet despite a great deal of progress, large anoma-
lies remain; many European securities, in particular, have no
identifiable owner (Milesi-Ferretti, Strobbe, and Tamirisa 2010).
The second puzzle is a theoretical challenge. Since the latter
half of the 1990s, capital has been flowing from poor to rich
*countries. As a result, the rich world now appears to be a sizable
net debtor in the official data, dragged down by the United States
and Europe. Although the literature has put forward possible
explanations for the U.S. net debt and the rise in China’s
assets,
1
the negative net positions of Europe and the overall
rich world remain largely unexplained. Despite this, many obser-
vers have grown accustomed to the view that external assets are
now in poor countries and debts in rich countries. In the public
debate, the view that ‘‘China owns the world’’ has become parti-
cularly popular. Should it be correct, the implications for policy
making and open-economy modeling would be far-reaching.
My article challenges this view. The negative net foreign
asset position of the rich world, I argue, is an illusion caused by
tax havens. International statistics fail to capture most of the
assets held by households through tax havens: they overlook
the portfolios of equities, bonds, and mutual fund shares that
households own via banks in Switzerland and other countries
with strict bank secrecy rules. This coverage gap explains many
of the long-standing anomalies in global data. My computations
find that around 8% of households’ financial wealth is held
through tax havens, three-quarters of which goes unrecorded.
This stock of unrecorded assets is double the recorded net debt
of the rich world (Figure I). Because a body of evidence suggests
that most of the wealth in tax havens belongs to residents of rich
countries, accounting for it turns the rich world into a net cred-
itor.
http://www.nytimes.com/2014/06/16/op...f=opinion&_r=0Quote:
GABRIEL ZUCMAN is a 27-year-old French economist who decided to solve a puzzle: Why do international balance sheets each year show more liabilities than assets, as if the world is in debt to itself?
Over the last couple of decades, the few international economists who have addressed this question have offered a simple explanation: tax evasion. Money that, say, leaves the United States for an offshore tax shelter is recorded as a liability here, but it is listed nowhere as an asset — its mission, after all, is disappearance. But until now the economists lacked hard numbers to confirm their suspicions. By analyzing data released in recent years by central banks in Switzerland and Luxembourg on foreigners’ bank holdings, then extrapolating to other tax havens, Mr. Zucman has put creditable numbers on tax evasion, showing that it’s rampant — and a major driver of wealth inequality.
Mr. Zucman estimates — conservatively, in his view — that $7.6 trillion — 8 percent of the world’s personal financial wealth — is stashed in tax havens. If all of this illegally hidden money were properly recorded and taxed, global tax revenues would grow by more than $200 billion a year, he believes. And these numbers do not include much larger corporate tax avoidance, which usually follows the letter but hardly the spirit of the law. According to Mr. Zucman’s calculations, 20 percent of all corporate profits in the United States are shifted offshore, and tax avoidance deprives the government of a third of corporate tax revenues. Corporate tax avoidance has become so widespread that from the late 1980s until now, the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent, Mr. Zucman found, even though the tax rate hasn’t changed.
Mr. Zucman, an assistant economics professor at the London School of Economics, is part of a wave of data-focused economists led by his mentor, Thomas Piketty, of the Paris School of Economics. Mr. Zucman’s short book on tax evasion, “The Missing Wealth of Nations,” was a best seller in France last year.
Mr. Zucman’s tax evasion numbers are big enough to upend common assumptions, like the notion that China has become the world’s “owner” while Europe and America have become large debtors. The idea of the rich world’s indebtedness is “an illusion caused by tax havens,” Mr. Zucman wrote in a paper published last year. In fact, if offshore assets were properly measured, Europe would be a net creditor, and American indebtedness would fall from 18 percent of gross domestic product to 9 percent.
from the WSJ:
http://blogs.wsj.com/economics/2015/...hor-thinks-so/Quote:
The economist Gabriel Zucman, a protégé and co-author of the French economist Thomas Piketty, has published a new book that attempts to document money hiding out in tax havens. Mr. Zucman’s book, “The Hidden Wealth of Nations,” documents just how dramatic the recent rise has been.
To estimate the amount of hidden money, Mr. Zucman begins with a simple trick. If you add up all the financial liabilities and all the assets in the world, they ought to balance. One person’s liability ought to be another’s asset. (Or one company’s, one country’s, etc.) But if you add up all the world’s reported liabilities, the figure is about $6 trillion higher than the reported assets—a sum that’s been growing. The likeliest explanation: around $6 trillion in assets are being hidden.
Mr. Zucman has delved into the world’s byzantine financial accounts data and unveiled a wealth of information (much of it available on his website) that documents the extent of this rise. For example, he finds a rapidly growing share of U.S. equities are being managed offshore.
The U.S. Treasury did not conduct a regular survey on foreign portfolio liabilities until 1984. But a one-off survey in 1974 showed little rise compared with a survey in 1941. Beginning in the 1990s, however, the share began to rise, accelerating in the 2000s.
Tax inversions allow firms to avoid state taxes
http://www.usatoday.com/story/money/...axes/12941521/
Facebook paid £4,327 corporation tax in 2014
Its most recent Companies House filing shows the company as making a pre-tax loss of £28.5m last year, but the firm also paid its 362 UK staff a total of £35.4m in share bonuses.
The share bonuses amount to £96,000 on average per UK Facebook employee.
It means Facebook's UK corporation tax bill was less than the tax the average UK employee paid on their salary.
The average UK salary is £26,500 on which employees pay a total of £5,392.80 in income tax and national insurance contributions.
In January, Facebook reported global fourth-quarter profits of $701m (£462m), a 34% increase on the same period a year earlier.
Total profits for the year were $2.9bn, almost double its profit for 2013.
Facebook said at the time that advertising revenue grew by 53% to $3.59bn, with nearly 70% of that coming from mobile ad sales.
EU probe
The latest revelations will reignite the debate about how much UK corporation tax companies pay at a time when several multinational corporations are being investigated by the European Commission over the tax arrangements they have with European Union member states.
Google, Amazon, a division of the Fiat motor company and Starbucks are all subject to the investigation and the European Commission has said it could widen its probe further.
The investigation came after Starbucks was revealed to have paid just £8.6m in UK corporation tax in the 14 years between 1998 and 2012, despite making more than £3bn in UK sales in the same period.
Last week, EU finance ministers agreed to boost information sharing in response to the so-called LuxLeaks scandal that emerged last year. The scandal showed Luxembourg had issued hundreds of tax rulings allowing companies to lower their tax bill by funnelling their profits through the country.
http://www.bbc.com/news/business-34504474
http://www.bbc.com/news/business-34504474
Ireland, Accused of Giving Tax Breaks to Multinationals, Plans an Even Lower Rate
The Irish government, long criticized by other European countries and the United States for its friendly tax treatment of multinational giants like Apple and Google, on Tuesday announced a move that seemed likely to further incense its critics.
Ireland, whose corporate tax rate of 12.5 percent is already one of the lowest in the developed world, said it would cut that rate in half for a new tax category — one covering revenue pegged to companies’ patents and other intellectual property.
Companies that could be poised to benefit include Apple, Google, Facebook and Microsoft — all of which have significant operations in Ireland and have troves of intellectual property that might be eligible for the new tax treatment.
Google and Facebook declined to comment on Tuesday, and Apple and Microsoft did not immediately respond to requests for comment.
The new 6.25 percent rate would apply to a tax category that Ireland announced last year, which it calls a “knowledge development box,” and would be put into effect early next year. The category is meant to provide tax breaks for revenue and royalties derived from intellectual property held in a specific country.
Other countries, including Britain, Luxembourg and the Netherlands, have created similar tax categories for intellectual property, often in the hope of enticing overseas companies to set up shop in their territories.
But critics contend that the royalties paid on intellectual property under such arrangements often do not adequately reflect where the inventions were made or where the innovations generate the most revenue.
http://www.nytimes.com/2015/10/14/bu...eaks.html?_r=0
New Studies: Do ‘Competitive’ Corporate Tax Cuts Boost Growth?
Nicholas Shaxson summarizes a very important study, which finds that corporate tax cuts lead to cash hoarding, which lower growth. Moreover, this cash hoarding started in the 1990s, which is just before the famed Bernanke “saving glut”.
We’ve disputed his claim that it played the role he suggested in the global financial crisis (the best debunking of that idea is in a paper by Claudio Borio and Petit Disyatat of the Bank of International Settlements, Global imbalances and the financial crisis: Link or no link?” (see Andrew Dittmer’s translation for laypeople here).
However, we’ve been calling attention to corporate dis-saving, as in liquidation rather than investing, since 2005, and cash hoarding and stock buybacks are part of this pattern.
that ‘competitive’ corporate tax cuts are likely to be equivalent to pushing on a string. They will tend to feed corporate cash hoarding (what Mark Carney has called ‘dead money’) instead of business investment – while sucking revenue and investment and spending power out of the government sector, depressing demand and investment. The likely result is slower growth.
http://www.nakedcapitalism.com/2015/...+capitalism%29
It was the Repug/St Ronnie tax act of 1986 that got the BigCorp tax-haven/tax-avoidance rolling.Quote:
Originally Posted by Winehole23
Repugs, not radical Muslims, are the biggest threat to America
as of 2011, at least 54% of US corporate income isn't subject to corporate income tax:
http://www.nber.org/digest/jan16/w21651.htmlQuote:
Pass-through entities — partnerships, tax code subchapter S corporations, and sole proprietorships — are not subject to corporate income tax. Their income passes directly to their owners and is taxed under whatever tax rules those owners face. In contrast, the income of traditional corporations, more specifically subchapter C corporations, is subject to corporate income taxes, and after-tax income distributed from the corporation to its owners is also taxable.
In 1980, pass-through entities accounted for 20.7 percent of U.S. business income; by 2011, they represented 54.2 percent. Over roughly the same period, the income share of the top 1 percent of income earners doubled. Previous research has shown that the two phenomena are linked: The growth of income from pass-through entities accounted for 41 percent of the rise in the income of the top 1 percent. By linking 2011 partnership and S corporation tax returns with federal individual income tax returns, in particular Form 1065 and Form 1120S K-1 returns, the researchers find that over 66 percent of pass-through business income received by individuals goes to the top 1 percent. The concentration of partnership and S corporation income is much greater than the concentration of dividend income (45 percent to the top 1 percent) which proxies for income from C corporations (traditional corporations). While taxpayers in the top 1 percent are eight times as likely to receive dividends as taxpayers in the bottom 50 percent, the ratio for partnerships is more than 50 to 1.
Many partnerships are opaque. A fifth of partnership income was earned by partners that the study's authors were not able to classify into one of several categories, such as a domestic individual or a foreign corporation. In addition, some partnerships are circular, in the sense that they are owned by other partnerships, which could in turn be owned by yet other partnerships.
http://www.nber.org/digest/jan16/business_bar.jpg Pass-through business income faces lower tax rates than traditional corporate income. The tax rate on the income earned by pass-through partnerships is a relatively low 15.9 percent, excluding interest payments and unrepatriated foreign income. That compares with a 31.6 percent rate for C corporations and a 24.9 percent rate for S corporations. Only sole proprietorships have a lower average rate, 13.6 percent. Combining both taxes on corporations and taxes on investors, the researchers calculate that the U.S. business sector as a whole pays an average tax rate of 24.3 percent.
iow, America is fucked and unfuckable. The 1% and BigCorp continue to amass unknown $Ts and political power to buy enough govt to keep that shitball rolling over the 99%.Quote:
Originally Posted by Winehole23
any suggestions how to unfuck America? :lol
http://www.americansfortaxfairness.o...axes-they-owe/Quote:
In short, deferral provides a mammoth incentive for multinational corporations to disguise their U.S. profits as profits earned in tax havens. And they have responded to this incentive: 82 percent of the U.S. tax revenue loss from income shifting is due to profit shifting to just seven tax-haven countries.
Firms have also become increasingly adept at manipulating the rules here in the United States to avoid taxation. Lower tax rates on “pass-through” business entities and poor regulatory responses have given firms the chance to reorganize as “S-corporations” or opaque partnerships in order to avoid paying any corporate income tax at all.
This intentional erosion of the U.S. corporate income tax base has real consequences. Rich multinational corporations avoiding their fair share of U.S. taxes means that domestic firms and American workers have to foot the bill. It also means that corporations are not paying their fair share for our infrastructure, schools, public safety, and legal systems, despite depending on all of these services for their profitability.
Quote:
Corporate profits are way up, and corporate taxes are way down. In 1952, corporate profits were 5.5 percent of the economy, and corporate taxes were 5.9 percent. Today, corporate profits are 8.5 percent of the economy, and corporate taxes are just 1.9 percent of GDP.
http://www.taxjustice.net/2016/09/20...rrative-taxes/Quote:
- Corporations used to contribute $1 out of every $3 in federal revenue. Today, despite very high corporate profitability, it is $1 out of every $9.
- As of 2015, U.S. corporations had $2.4 trillion in untaxed profits offshore. Another study, looking at S&P 500 companies, found they held $2.1 trillion as of 2014. This roughly five-fold increase from $434 billion in 2005 stems largely from anticipation of a tax holiday.
- Just two industries—high-tech and pharmaceutical/health care—hold half the untaxed offshore profits.
Kinda hard to argue with that.Quote:
Originally Posted by Winehole23
Corporations somehow are overtaxed today, when their share of the national income is up, and their overall paid tax percentage is down?
smh
So go after the "Top" or "Big" companies. I have a corporation, and I pay a ton of taxes. Converting to an LLC from a C right now as we restructure ownership. I want to build cash reserves, but if I don't spend the money, it gets jacked at 35%! So I deplete reserves at the end of the year by advance paying bills, or taking/giving bonuses. BUT, once a downturn hits, and we lose a few clients...don't have as big a cushion as I'd like to ride it out. Hasn't happened, but I could see it doing so. The tax structure specifically encourages us to be more cavalier than I am comfortable with. 25% over 50K & 34% for everything over 75K profit is just Bullshit.
Meanwhile the enormous companies shelter billions, that make the "effective" rate in aggregate low, giving people not paying attention reason to believe that were all skating without paying taxes. Fuck you all.
X2Quote:
Originally Posted by 101A
i have to gut the corporation every year with bonuses to avoid double taxation (35% on the C corp and then 35%+ on the personal when I finally take it out) Fortunately my corporate tax year is grandfathered and starts March 1 instead of January 1 so I can do better crossover tax planning.
"Meanwhile the enormous companies shelter billions"
The economy, the tax system, voting, lawmakers, etc are all rigged, corrupted by BigCorp / 1% / VRWC.
But there's NOTHING to be done, legislatively (there's nowhere else), because the Fed, state legislatures are corrupted, owned by BigCorp / 1% / VRWC.
America is fucked and unfuckable.
btw, BigCorp creates bogus "small business" to suck up $Bs in contracts from the Feds, $Bs intended exclusively for "truly" small business.
Lower the corporate tax rate and legislate so that companies are no longer able to accumulate profits in other lower tax international jurisdictions. Change the laws relating to transfer pricing. That would help.