8 ms·

According to this Bloomberg article, companies have $2.1 trillion sitting offshore for tax reasons [1]. They're probably waiting for Congress to let them bring

• ju-st 11y ago
  As far as I know the US taxes the income of its citizens even when they live outside the US. So why can't the US just tax the offshore income of the companies?
  • jerf 11y ago
    "So why can't the US just tax the offshore income of the companies?" There's 2.1 trillion reasons....
  • ryanlol 11y ago
    Because the US needs the businesses, not the other way around.
    • bsder 11y ago
      That's quite funny. If the US blocked a company from it's market, that company would collapse practically overnight. The US is the most profitable market in the world with the EU running not too far behind. Think about Alibaba--it's profit is about connecting Chinese sellers to the profitable markets in the US and EU--not about connecting to other Chinese suppliers.
      • ryanlol 11y ago
        But the US can't just block offshore companies from its market without absolutely destroying its economy. What do you think would happen if the US suddenly decided that no company can do business in the US without paying taxes to the US for their offshore profits?
        • littletimmy 11y ago
          They'll pay the taxes. Also grumble for a month maybe, then go quiet.
          • ryanlol 11y ago
            I don't think you realise just how much money that'd be.
        • bsder 11y ago
          You only have to injunct one. After a couple million in losses, they'll pay up. At that point, the threat of injunction would simply get the other ones to pay. Or, you start seizing domestic property to pay taxes on the foreign assets. Do NOT assume the government is ever powerless. It is always bigger than you.
          • ryanlol 11y ago
            The government might not be powerless, but exercising such power would be disastrous. Also, >After a couple million in losses Leads me to believe you don't really understand the numbers we're talking about here. That's missing at least a couple of zeros.
            • bsder 11y ago
              Not at all. Shareholders would begin screaming at the management to pay the taxes almost immediately. Losses wouldn't even make it to $100 million before management was replaced.
    • crdoconnor 11y ago
      Nope. Lobbying dollars.
      • ryanlol 11y ago
        Not really, creating a hostile environment for businesses will obviously drive them away. Lobbying has nothing to do with preventing a completely unrealistic scenario from happening.
      • deleted 11y ago
        [deleted]
    • littletimmy 11y ago
      Are you serious? Where could Apple establish itself if not for the US? Or Google? Or Facebook? The government comes first, as a guarantor of civilization. Everything else comes later.
      • ryanlol 11y ago
        There's this whole continent of pretty civilised countries just to the east of US.
        • littletimmy 11y ago
          And in those countries too, businesses need the government.
          • ryanlol 11y ago
            And? I think you're missing the point here, US double taxing foreign income would put everyone else at an insane competitive advantage.
            • littletimmy 11y ago
              Really? Other countries don't have taxes?
              • ryanlol 11y ago
                I'm not sure you follow, we're discussing double taxing here.
  • frogpelt 11y ago
    They would have to change the tax code.
  • Wingman4l7 11y ago
    It depends; if you are paying taxes to the government of the country you reside in (say, Australia), the US has a reciprocal agreement with them, and you are not charged tax two different times on your income. On a company level, this seems to translate into "we have super low local tax rates, build companies and campuses here to boost our local economy!" (see: Ireland).
    • jsn117 11y ago
      to a point, then double taxation kicks in (on income)
• jonnathanson 11y ago
  It may be sitting offshore for tax reasons, but even if it were sitting here (with higher taxes), it'd be sitting. Parked. Hoarded. Illiquid. Whatever you want to call it. Tax rates are the proximate cause here; what we really need to look at is the cost of capital, and why companies deem there to be no productive investment use for that excess cash.