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As usual, this is the key takeaway, imo: "None of this is illegal. Far from it. A corporation owes it to its shareholders to keep its tax bill as small as poss
by hkmurakami 12y ago
As usual, this is the key takeaway, imo:
"None of this is illegal. Far from it. A corporation owes it to its shareholders to keep its tax bill as small as possible."
- StavrosK 12y agoI wonder if there's "tax evasion as a service". Register for the service, pass all your income to that company, get paid as its employee at a much smaller tax rate than your country. I think that some countries make that impossible for physical persons, though.
- seanmcdirmid 12y agoIt is not tax evasion; this money has probably already been taxed at least once. But the USA is very unique in making tax claims on world-wide income, so if the tax rate abroad is lower than the tax rate at home, you are supposed to pay the difference when you move the money back (the converse isn't true, however).
- byroot 12y agoIt might be true for some of it, but all these companies are well known for using european tax codes loopholes[0] and pay little to no tax on this money [0] http://en.wikipedia.org/wiki/Double_Irish_arrangement http://en.wikipedia.org/wiki/Double_Irish_arrangement
- joelrunyon 12y agoIt's still not tax evasion.
- hkmurakami 12y agoiirc there was also something called the Dutch Sandwich that was recently made unavailable.
- StavrosK 12y agoSorry, s/evasion/minimization/.
- dredmorbius 12y agoRelying on the exceptionally thin cover that an action is technically not illegal because it's in conformance with the laws you've paid to have written and passed with the wealth you're hoarding by way of those very laws is not a very intelligent line of reasoning to pursue. The art of legal and financial manipulation to socialize losses, privatize profits, to artificially move transactions to jurisdictions with favorable tax laws, and then lobby for eventual tax holidays to allow for tax-free repatriation of those funds may fall within the techncial gloss of "legal". It's not moral, ethical, fair, nor economically or democratically defensible.
- dredmorbius 12y agoSelf-reply: Having watched votes on this comment bounce around quite a bit over the past few hours, I'm curious as to just what it is that seems to engender a fairly strong split of opinion on what I've written here.
- joelrunyon 12y agoIt's not tax evasion.
- deleted 12y ago[deleted]
- seanmcdirmid 12y agoAnd all of that money was earned overseas. It is up to the company to repatriate it or throw it back into overseas operations. This is kind of fair: if say Germans pay money to buy Windows, why not use some of the profit there in Germany rather than bringing back to the states?
- Rapzid 12y agoBecause it wasn't earned overseas in the way you're suggesting. It was "earned" overseas. Often companies route sales through overseas shell companies. See the StarBucks debacle in the UK. Microsoft's explanation of them being a "global" company is BS. They will wait for a corporate tax holiday to bring it back at a much reduced rate, or a chunk of it at almost no rate.
- seanmcdirmid 12y ago> It was "earned" overseas. I work for Microsoft in Beijing doing R&D; I disagree and am kind of offended by your assessment.
- philrapo 12y agowhat about all the copies of windows in use in non-US countries? Those arent considered global?
- Rapzid 12y agoRight, and do you need to create a company in Ireland to sell copies of Windows in France? The money is most certainly funnelled into a select few "companies" set-up in very specific countries. This is classic big business accounting and perfectly legal. It's also utter BS to spin it any other way than trying to avoid paying taxes on the money.
- bilbo0s 12y agoThis makes sense to me. If you make this money overseas... shouldn't you use the money in whatever nation you made it in to make that nation better ???? I think people who talk about taxes really miss this point. Because the taxes talk is all predicated on a foregone conclusion that bringing money to the US is the best thing you can do for shareholders. I'm not sure that's true.
- InclinedPlane 12y agoMuch of this is a consequence of the silly high corporate tax rates in the US, which are among the highest (by a huge margin) in the developed world. In my opinion you could solve a lot of silliness by just harmonizing the corporate taxes/income taxes/capital gains taxes.
- aaronbrethorst 12y agoI am a shareholder in Microsoft who disagrees very strongly with this.