11 ms·

You are right, really if we want companies to bring money back we just need lower taxes. The games companies play to eek out an additional 5% and overcome taxes

• toomuchtodo 10y ago
  We don't have to lower taxes. We just change the tax law to tax that money whether they bring it back to the US or not.
  • vnchr 10y ago
    Technically, that would require taxing a foreign company for foreign business activity. It's out of the US's jurisdiction.
    • Animats 10y ago
      Nah. Apple's "foreign business activity" in Ireland is a tax dodge.
      • valuearb 10y ago
        What is Samsung's foreign business activity? Cause it doesn't pay US income taxes on it, ever.
      • mcphage 10y ago
        It is, but it's a dodge based on money from products manufactured and sold outside of the US, owned by a company not in the US, so it's still not clear how the US could legally insert themselves into there.
        • icebraining 10y ago
          Isn't Apple Ireland owned by the US company?
    • seanmcdirmid 10y ago
      It might work if we use our military to make all companies pay USA taxes no matter if the money is earned abroad and/or by a foreign company. /s No, this isn't workable.
      • toomuchtodo 10y ago
        Pay your taxes or don't sell your products in the country. Don't say something can't be done when it can easily be done. We'll embargo your goods at container ports and land borders if necessary. If you're a digital company, we will drop your ASN traffic at the border. Donald Trump becoming president is fairly indicative that nothing is off the table.
        • seanmcdirmid 10y ago
          Hey, there are two companies, IBM and SAP. They both do a lot of business abroad, pay taxes abroad, and whatever. Now which one do you want to pay all their taxes on all their international income? IBM? SAP? Pick carefully: why should SAP have a competitive advantage over IBM? Digital companies ALREADY pay taxes for everything that happens INSIDE of the USA. What we are arguing about is stuff that occurs OUTSIDE of the USA. Donald Trump becoming president simply means crazy idiotic proposals are now on the table. But then again he is realizing "gosh, this is really hard, not as easy as I thought" like health care, wall building, labelling china a currency manipulator, tax reform, etc...
  • drawkbox 10y ago
    You could do that but it would create more games with headquarters being outside the US and even small businesses/medium businesses would start doing that. There would be a million loopholes around it. I say corporations won the war, they have the legal teams to keep winning. As a response let small/medium sized businesses compete better by just lowing business taxes to really low levels, or progressive taxing as you grow. Right now the high tax rate only really affects our engine small/medium businesses who provide 50% of GDP, 65+% of jobs and 33% of exports. The only companies paying taxes are small/medium businesses, the tax system here almost is a competitive advantage to large companies over small/medium. If larger companies aren't going to invest here, get competitive help to the small/medium companies and entrepreneurs that are to challenge them.
    • sharun 10y ago
      I don't know about corporations having all this wrapped up. There is a lot of pressure on them since 2008 plus one leak after another - Lichtenstein, Luxembourg, Panama, Switzerland etc hasn't made it easy to be tax haven. If they had "won the war" we wouldn't be discussing it here.
      • drawkbox 10y ago
        Many of those were personal income tax dodging, corporate tax dodging is usually island tax havens or Ireland recently (Apple/Facebook). Personal income tax dodging is bad as that is where most tax revenue comes from. Taxes should probably be lower on income as well though to discourage tax games and retaining more tax whales (wealthy tax payers). People of all brackets need more money in their pocket for this consumer economy that hasn't really rebounded.
        • toomuchtodo 10y ago
          "Bloomberg: Sorry America, Your Taxes Aren’t High" https://www.bloomberg.com/news/articles/2017-04-11/sorry-america-your-taxes-aren-t-high https://www.bloomberg.com/news/articles/2017-04-11/sorry-ame... How low is low enough? Pay your damn taxes.
  • valuearb 10y ago
    So you are saying that you want Samsung to be able to build phones tax free in China, but Apple should pay 40%+ income taxes (CA+US) for doing so? Please let me move all my retirement savings into foreign stocks before you pass this law, please.
    • toomuchtodo 10y ago
      Feel free. Enjoy your already bond-level returns that asset class enjoys.
    • MarkMc 10y ago
      California has enormous advantages in intellectual capital that outweigh a high tax rate. Imagine it is 2007 and you can choose to invest in Apple and receive 60% of profits, or Samsung and receive 100% of profits. What's the better investment?
      • opo 10y ago
        >...Imagine it is 2007 and you can choose to invest in Apple and receive 60% of profits, or Samsung and receive 100% of profits. What's the better investment? Imagine it is 2007 and you can choose to invest in Yahoo and receive 60% of profits, or Samsung and receive 100% of profits. What's the better investment?
        • MarkMc 10y ago
          That's a good point. But surely you accept that California has some inherant advantage? If the effective tax rate is 15% in South Korea and 20% in California, investors will still pour money into Silicon Valley won't they?
          • opo 10y ago
            >...But surely you accept that California has some inherant advantage? For now at least, it does seem to have an advantage and draws capital. (For example, Samsung has a huge R&D center in silicon valley.) Of course for every successful IPO in the valley, there are many others who don't make it near that far. The original poster was saying "...We just change the tax law to tax that money whether they bring it back to the US or not.". This would mean for example, that when selling in China, Apple would have to pay Chinese AND US/CA taxes on the profits made there and Samsung wouldn't - this would put US corporations at a huge disadvantage to their competitors. While I can see the goal is to get more tax money from corporations, it is obvious to see there would be a number of unintended consequences.
  • lsadam0 10y ago
    I hope you never hold public office. Please, if you plan to run, let me know so that I can adjust my investments accordingly.
    • toomuchtodo 10y ago
      I don't care about your investments, I care about entities paying their taxes.
      • IncRnd 10y ago
        Why do you think a foreign company should pay US taxes?
        • intended 10y ago
          Is the point not about tax evasion?
          • IncRnd 10y ago
            No. It is not even clear this is tax avoidance, let alone evasion. No country on Earth taxes companies that are foreign to it, unless they do business inside the borders.
        • Frondo 10y ago
          Apple isn't a foreign company.
          • IncRnd 10y ago
            Except that the foreign company which profited by 246B is foreign. If it weren't foreign, then taxes would have been paid to the US on the monies as they were made, and there wouldn't be close to that amount of money offshore. As the article says, "Repatriation is front and center. That is good for the country and Apple." That is different from envious theft. There is more than one company called Apple. Which one do you mean?
  • sigzero 10y ago
    You would have to radically change tax laws and likely it would not stand up to the courts.
  • briandear 10y ago
    Why? It was earned outside the US so how does the US have any moral claim to it?
    • bonaldi 10y ago
      The US lays claim to income tax on its citizens' earnings outside the US, even when they're wholly resident in other countries, so ...
  • IncRnd 10y ago
    That doesn't make much sense in this case. You can't arbitrarily tax foreign corporations that aren't on US soil.
  • opo 10y ago
    So are you recommending that a foreign company should only pay taxes on what they earn in the US, but a US company should pay taxes on everything it earns everywhere? (i.e. the US government should get 36% of the profits even if something is built/sold in another country, just because the company has its headquarters in the US?) You do realize this would put US corporations at a huge disadvantage to corporations in any other country, right? You can imagine some of the unintended consequences. I think only Eritrea and the US taxes corporations when brining back money into the country. For obvious reasons other countries realized this was not a good approach and don't do that.
  • simonh 10y ago
    That would massively disadvantage US companies operating abroad, compared to foreign companies. E.g. Ford builds a car in Spain, ships it to France and sells it. They pay a US tax to do so. VW does the same, but pays no US tax, therefore the VW car will be cheaper. It would kill US companies global competitiveness.
• stefantalpalaru 10y ago
  > if we want companies to bring money back we just need lower taxes Do you really want to compete with tax havens?
• dageshi 10y ago
  If you lower taxes to encourage overseas profits to come home then won't you drive what you already consider to be a strong dollar even higher. Tax policy is typically used in the opposite way, if the dollar drops and the US government wants to shore it up, it will alter tax policy to encourage repatriation. The Bush administration did it in the early 2000's if I recall correctly to help strengthen the dollar.
  • drawkbox 10y ago
    The policies to drive down the dollar are probably less likely to happen long-term (reserve currency, oil pricing, military purchasing, manufacturing offshore cheaper and to get around labor/environment/healthcare issues, Bush doing it also raised the cost of oil during war which benefits some people), lower taxes has wide support. If more money/investment is back in the US then it may actually help wage stagnation and get people raises. It will at least happen in the small/medium business arena which would also love to have healthcare removed from employment. To help small/medium business, lower taxes and remove benefits from employment. They will have more to pay employees.
  • valuearb 10y ago
    Better to have a strong dollar with lots of capital and high productivity, than the inverse.
    • dageshi 10y ago
      Forgive me but the dollar is already relatively strong, interest rates are the lowest they've been in centuries, there is no lack of capital floating around the US economy for those who can use it. I am questioning what the point of encouraging overseas profits to come back under such a situation? You drive the value of the dollar even higher which at a certain point forces companies to offshore faster.
      • valuearb 10y ago
        You are using the word "relative". I'd say the US has gradually become capital starved, our tax system is eating our seed corn. Our growth rates have been pathetic the last 40 years. More capital is always better. It lowers the bar for investment. It increases productivity, allowing us to get more of the best jobs. The strong dollar is a sign of success. And don't forget that reprinted profits aren't always revinested, lots of it is paid out to shareholders who consume some of them, creating demand.
• Bombthecat 10y ago
  How close to zero do you want to get?
• clairity 10y ago
  yes, monetary velocity is the lifeblood of an economy, but no, lowering corporate taxes would only increase velocity at the top, and velocity in the upper echolons of the economy is not good for the economy overall. instead, you want to create incentives that create velocity in the middle and lower strata of the economy, where it will do the most good. one option is to tax the money regardless of accounting technicalities that assign revenue to international subsidiaries. then it doesn't matter where the money resides accounting-wise, since there would be no special treatment of overseas cash. another tax-advantaged option that's entirely within apple's control is to distribute more of its income to its employees (especially retail employees who generate above average returns on investment for the retail industry), who in turn would spend the money rather than hoarding it, thereby increasing overall economic velocity (particularly in the lower tiers of the economy). we should hold the IRS (and government economic policy overall) to the singular task of making sure tax law is applied evenly and fairly across all economic strata, so that we all have an even playing field. we should not tolerate corporate welfare in any form. corporations are not babies.
  • valuearb 10y ago
    "another tax-advantaged option that's entirely within apple's control is to distribute more of its income to its employees " You mean "shareholders's income". It's not Apples income to run social programs with. Lowering (or preferably eliminating) corporate income taxes benefits investment at every level, from Apple all the way down to startups. If your business plan shows that if you hit plan you will generate $1M in profit your first year, and will reinvest $600k in the business, the rest going to CA and US taxes. Now contrast that to the reinvesting the full $1M in the business. In the second case the business will be able to grow faster and increase company asset/equity value faster, of course it will be more valuable. And this means it's more likely to get funded.
    • jliptzin 10y ago
      Wouldn't you be able to write off those investments against the $1 million in income? In that case it shouldn't matter what the tax rate is.
    • deleted 10y ago
• eru 10y ago
  What could America possibly ever need dollars for? They can print them at will.. (And yes, individuals might want to work for dollars. But the American domestic economy as a whole only needs to accepts dollars in order to make other people accept them in return for their useful goods and services.) Also, a strong dollar is useful for all consumers---not just rich people.. (The limits to dollar strength are not in export, but in making monetary policy too tight for the domestic economy.)
• jellicle 10y ago
  Alternately, just crack down on Apple's tax evasion.
• rodgerd 10y ago
  So just to be clear, you think the government should provide Apple employees in the United States with healthcare, but you don't think Apple should contribute to the cost of that?