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Keep in mind, their headquarters is located in Ireland but they can still do operations in the United States. This is a strategic move to avoid U.S. taxes on pr
by um_ya 11y ago
Keep in mind, their headquarters is located in Ireland but they can still do operations in the United States. This is a strategic move to avoid U.S. taxes on profits made outside the country. The United States is one of the only countries in the world that taxes outside its boarders. They will save on foreign profits, but they will still pay taxes on their U.S. income... I find it ironic that our politicians promise jobs, but aren't willing to reduce taxes and regulation on businesses. Then, they get upset when businesses want to leave. What's their solution to fix this? "tax them more for trying to leave" -__-
- vkou 11y agoAny amount of taxes is too high for these businesses. Lowering taxes, because of taxation arbitrage is a quick race to the bottom.
- hibikir 11y agoBut corporate US taxes are on profits, so if the US only taxed inside the country, you can lower your US taxes by engineering your organization such that you can claim US operations pay your business unit that resides in a different country amounts that are similar to your US profits. So imagine a company that sell 500m of a product in the US and today has costs of $400, with $100m in profit. If they have to pay the business unit in Ireland $90m for their voodoo design expertise, then the company still has 100m in profit, but now only 10m will be taxed in the US. It's not as if consumption taxes lack loopholes themselves: In my own case, I spend about 20% of my earnings, with the rest going to taxes and savings (I am aiming for early retirement). So why would I spend my retirement years at a place wth a high consumption tax? The one way around that would be to start taxing money transfers across borders, and we all know that isn't happening.