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Disagree. Apple is one among thousands of companies avoiding tax, while Mom-and-pop companies pay exorbitant rates. No one's working around laws - they're follo

Disagree. Apple is one among thousands of companies avoiding tax, while Mom-and-pop companies pay exorbitant rates. No one's working around laws - they're following it diligently while maintaining their fiduciary duty to investors. US corporate tax rates are among the highest in the world - even Canada - having a reputation for being socialist - has a lower rate. You're forcing companies to pay 0% tax in the US if they can get away paying only 5% in Ireland. And Ireland is benefiting disproportionately from American innovation - because of onerous tax rates

pjc50 9y ago
The US is the only country to apply a global income tax to its non-resident nationals. It should apply a global tax to its businesses as well.
- valuearb 9y ago
  That would drive US corporations to reincorporate overseas and cost the US most of its corporate tax revenue.
  - toomuchtodo 9y ago
    You install tariffs on the products and services of those corporations attempting to subvert the taxing authority, utilizing payment networks if necessary to capture the tariff.
    - matt_wulfeck 9y ago
      So person A sells an iPhone to person B in China. The phone was manufactured there and never left the country. Can you tell me the reasoning that our federal government owns 35% of that sale? There’s a reason other (more “progressive”) countries don’t tax overseas business. It’s stupid and anticompetitive.
      - toomuchtodo 9y ago
        The same reason I owe the government taxes when a non US company pays me directly when I work outside of the US. That’s what I owe the US government for their services I receive as a US citizen regardless of where my business activity took place. You think it’s stupid and anti competitive. I think that it’s a race to the bottom otherwise and fully support the current model (although 35% is a tad too high; 20-25% is more reasonable IMHO).
        wbl 9y ago
        There is only one other country that agrees with you: Eritria. Almost all other countries tax only residents.
        deleted 9y ago
        [deleted]
        toomuchtodo 9y ago
        To each country their own model. This works for us. Probably helps to be one of the largest economies in the world. You get to make your own rules at that scale.
        wbl 9y ago
        Remember Boris Johnson? Why should he have to pay taxes to a country he had no real connection to? What real purpose does that serve?
        toomuchtodo 9y ago
        There is a solution to that: renounce your citizenship and remove your country’s obligation to you, removing your liability as a citizen.
        wbl 9y ago
        Boris Johnson couldn't do that until he paid huge amounts in penalties for a citizenship hr was unaware of. He consumed no US services. Why should he be taxed?
    - valuearb 9y ago
      Tariffs are awesome. Smoot-Hawley helped trigger an American boom they called “The Great Depression”. You are describing a system that would give Samsung an even far lower tax rate than Apple. You can’t trap capital, it will flow overseas to where the best opportunities are. We are already making this happen with the highest corporate tax rates in the world. Adding foreign corporate taxes as a third layer on every dollar of profit would make our slide to uncompetitiveness go that much faster.
  - charlesdm 9y ago
    You describe the situation as it is. The current system indeed drives US corporations to reincorporate abroad by merging with a foreign companies, because they are able to immediately create huge tax synergies. It also makes US companies more prone to acquisitions from abroad, because those acquirers can save a ton more in tax than any company could with a US holding company at the top.
    - valuearb 9y ago
      You aren’t far away, but not exactly understanding what foreign subsidiaries are. They aren’t created out of mergers (not usually), and they defer taxes, not directly save them. If Apple directly sold in France it would first pay French corporate taxes, then on the remaining profits, pay another 40% or so as corporate taxes to US and California. They might have 40% left for reinvestment and dividends. Instead they create Apple France, which pays the French corporate taxes on its profits, but doesn’t send the rest to Apple USA. By holding those profits Apple can defer the day of taxation until a tax holiday (hopefully) so they can reinvest or pay shareholders as much as 50% of their French profits. This ignores other wrinkles such as moving the French after tax profits to Ireland so the interest earned while they hold it is only taxed at very tiny rates.
      - charlesdm 9y ago
        What I'm talking about is the process after the profit has been booked and is held in a foreign account. What you describe is how to profit ends up in one of those foreign accounts. There are certain rules for US controlled companies about what they can and cannot do with the money held in those tax deferred subsidiaries. But if a US company is not US controlled (e.g. a corporate group with a holding company not based in the US) these (anti avoidance) rules do not always apply or are applied differently. Second, if you have an EU company acquiring a US domestic entity, they will generally be able to save more on taxes due to the high corporate tax rate. In its simplest form: say an entity that is taxable at 20% acquires a business paying 35%, they'll be able to convert a significant portion of that 35% by legally stripping earnings in various ways (loans, consulting agreements, ip license agreements, etc). See https://en.wikipedia.org/wiki/Tax_inversion https://en.wikipedia.org/wiki/Tax_inversion
EliRivers 9y ago
while maintaining their fiduciary duty to investors. I'm not so convinced. That's a huge cash pile. If they brought some back and handed it out as dividends, I'd feel the benefit. I'm not inherently averse to them investing it instead of giving it to me straight away, but at some point I do want it.
ifhd 9y ago
Then lower them, but force Apple to actually pay the new rate. The problem is big companies can get around taxes.

pjc50 9y ago

The US is the only country to apply a global income tax to its non-resident nationals. It should apply a global tax to its businesses as well.

valuearb 9y ago
That would drive US corporations to reincorporate overseas and cost the US most of its corporate tax revenue.
- toomuchtodo 9y ago
  You install tariffs on the products and services of those corporations attempting to subvert the taxing authority, utilizing payment networks if necessary to capture the tariff.
  - matt_wulfeck 9y ago
    So person A sells an iPhone to person B in China. The phone was manufactured there and never left the country. Can you tell me the reasoning that our federal government owns 35% of that sale? There’s a reason other (more “progressive”) countries don’t tax overseas business. It’s stupid and anticompetitive.
    - toomuchtodo 9y ago
      The same reason I owe the government taxes when a non US company pays me directly when I work outside of the US. That’s what I owe the US government for their services I receive as a US citizen regardless of where my business activity took place. You think it’s stupid and anti competitive. I think that it’s a race to the bottom otherwise and fully support the current model (although 35% is a tad too high; 20-25% is more reasonable IMHO).
      - wbl 9y ago
        There is only one other country that agrees with you: Eritria. Almost all other countries tax only residents.
        deleted 9y ago
        [deleted]
        toomuchtodo 9y ago
        To each country their own model. This works for us. Probably helps to be one of the largest economies in the world. You get to make your own rules at that scale.
        wbl 9y ago
        Remember Boris Johnson? Why should he have to pay taxes to a country he had no real connection to? What real purpose does that serve?
        toomuchtodo 9y ago
        There is a solution to that: renounce your citizenship and remove your country’s obligation to you, removing your liability as a citizen.
        wbl 9y ago
        Boris Johnson couldn't do that until he paid huge amounts in penalties for a citizenship hr was unaware of. He consumed no US services. Why should he be taxed?
  - valuearb 9y ago
    Tariffs are awesome. Smoot-Hawley helped trigger an American boom they called “The Great Depression”. You are describing a system that would give Samsung an even far lower tax rate than Apple. You can’t trap capital, it will flow overseas to where the best opportunities are. We are already making this happen with the highest corporate tax rates in the world. Adding foreign corporate taxes as a third layer on every dollar of profit would make our slide to uncompetitiveness go that much faster.
- charlesdm 9y ago
  You describe the situation as it is. The current system indeed drives US corporations to reincorporate abroad by merging with a foreign companies, because they are able to immediately create huge tax synergies. It also makes US companies more prone to acquisitions from abroad, because those acquirers can save a ton more in tax than any company could with a US holding company at the top.
  - valuearb 9y ago
    You aren’t far away, but not exactly understanding what foreign subsidiaries are. They aren’t created out of mergers (not usually), and they defer taxes, not directly save them. If Apple directly sold in France it would first pay French corporate taxes, then on the remaining profits, pay another 40% or so as corporate taxes to US and California. They might have 40% left for reinvestment and dividends. Instead they create Apple France, which pays the French corporate taxes on its profits, but doesn’t send the rest to Apple USA. By holding those profits Apple can defer the day of taxation until a tax holiday (hopefully) so they can reinvest or pay shareholders as much as 50% of their French profits. This ignores other wrinkles such as moving the French after tax profits to Ireland so the interest earned while they hold it is only taxed at very tiny rates.
    - charlesdm 9y ago
      What I'm talking about is the process after the profit has been booked and is held in a foreign account. What you describe is how to profit ends up in one of those foreign accounts. There are certain rules for US controlled companies about what they can and cannot do with the money held in those tax deferred subsidiaries. But if a US company is not US controlled (e.g. a corporate group with a holding company not based in the US) these (anti avoidance) rules do not always apply or are applied differently. Second, if you have an EU company acquiring a US domestic entity, they will generally be able to save more on taxes due to the high corporate tax rate. In its simplest form: say an entity that is taxable at 20% acquires a business paying 35%, they'll be able to convert a significant portion of that 35% by legally stripping earnings in various ways (loans, consulting agreements, ip license agreements, etc). See https://en.wikipedia.org/wiki/Tax_inversion https://en.wikipedia.org/wiki/Tax_inversion

EliRivers 9y ago

while maintaining their fiduciary duty to investors. I'm not so convinced. That's a huge cash pile. If they brought some back and handed it out as dividends, I'd feel the benefit. I'm not inherently averse to them investing it instead of giving it to me straight away, but at some point I do want it.

ifhd 9y ago

Then lower them, but force Apple to actually pay the new rate. The problem is big companies can get around taxes.