Apple, Google, Microsoft, Cisco, and a host of US megacorps are lobbying hard for a massive tax break – and they're gaining powerful friends in business, government, and labor in support of that effort. "This is about creating jobs, expanding US businesses and strengthening American companies," representative Kevin Brady (Rep-TX …
US corporations already pay few taxes.
Rather than a repatriation holiday how about a 90% tax increase based on percentage of labor.
Better yet post a moratorium on work VISAs, the system is obviously broken as it is so often abused.
Treat every job outsourced as an import a tariff the heck out of the value of that work.
As Abraham Lincoln said...
"...we here resolve that these taxes shall not have been paid in vain - that this nation, under greed, shall have a new birth of capitalism - and that government of the corporations, by the corporations, for the corporations, shall not perish from the earth."
The sad thing is most Republicans think this paraphrase of the Federalist Papers is from the Declaration of Independence (Ayn Rand insisted before she signed).
Note to Brits: it is a paraphrase, of the Gettysburg Address, four score and seven years afterwards.
This is so stupid!
I Repubs would not be the crazy beotches they are, we should just tax the HELL out of companies that don't hire American workers. Time for these companies to take 10% LESS profit to employ 25% more workers.
You can't argue with the math. These companies just want to argue the profit. PLEASE! Make 10% less to put 450,000 workers at a job! That will provide more buyers for your products (even in the 3rd terms.....buyer, seller, manufacturer) and will improve the ENTIRE economy!
But they are all selfish female dogs!
Everybody knows that the final destination for all US $ is China, what does it matter if they go through a corporate shareholder or banker's pockets on the way?
More likely it will end up in the banks and in the pockets of shareholders. How many jobs have they shipped abroad as cost-cutting exercises? How exactly will paying less tax pay off Americas MASSIVE debt?
Ah well America, you reap what you sow. This is what happens when you let corporations run the country.
Icon cos that's what you're all going to be like in a few more years. Unless you're the CEO of a multinational
It's not just that we don't have money in our pockets
Look at wages here in the US.. they have been pretty much stagnant over the last 20 years and actually show a decrease if accounting for inflation.
Corporations have become slaves to their shareholders and they don't trust the US government to help lead them out.
And say that entire estimated 1.3 trillion dollars that big corp is holding on to... if that money were given to the Federal Government.. it still wouldn't cover the deficit!
Do any of the companies lobbying for lower taxes (including ones in the UK) ever complain about a workforce that they have to pay to train because of an underfunded education system, or govt pork barrel contracts being cancelled because of spending cuts? Where do they think the money comes from? Taxes don't just disappear into a black hole: they do sometimes get used to fund public services that benefit companies who moan about having to pay for them.
Here in the UK, they complain continually, whilst pulling similar aerobatic moves to avoid paying taxes. Taxes, it seems, are things that other companies pay.
to be complete
Taxes are something that hit VAT-consumers, SME's, and PAYE-suckers. Political donations are what the big business boys and girls pay instead.
Anywho, tax relief can be a good idea, especially for up and coming businesses, when tax revenues can be turned in to inward investment rather than coin for the exchequer. Maybe Apple and Microsoft are getting nostalgic for their days as start-up runts.
Taxes are NEVER paid by corporations, regardless of the rate set by govt thieves.
They are ALWAYS paid by consumers. Companies merely act as government collection agencies, plus take their commission for collecting the taxes.
It's nice to see
...that The Register's commentards are so adept at untangling international finance matters.
Somewhat like the Greek electorate.
I'm all ears.
Please feel free to astound us with your financial acumen.
The equation is simple
Very simple really. If you don't have a repatriation holiday then the money remains in the countries where it currently sits. None of that money ends up in US taxpayer hands ever. That is why companies like Google, Apple and Microsoft have so much money sat outside the US. Have a repatriation holiday and that money will move back into the US. Even if it isn't used for directly creating jobs, it will increase the amount of money being spent in the US, increasing GDP (by definition), and hence increasing tax take. It would be very sensible to do so. Of course, as a Brit, I don't want that money repatriated to the US, because a large part of it sits in countries that are closely economically tied to the UK - like Ireland (see Double Irish or Dutch Sandwich for information). Pull that money out of Ireland and it will be in a worse financial hole than it currently is.
OK, got it
"If you don't have a repatriation holiday then the money remains in the countries where it currently sits."
So, in a nutshell, these corporate mobsters are saying, "hey, we have all this money hidden away overseas so that we don't have to pay tax like all the dirty proles do. If you let us bring it in to America tax free we might use it to buy some Beamers and shit which will be great for the economy."
Actually, it's more like they're saying:
"hey, we have all this money overseas that we've already paid local taxes on and don't fancy paying even more tax so that we can bolster the US economy. If you let us bring it in to America at a low tax rate we might use it to buy some Beamers and shit which will be great for the economy."
We all know what will happen
Same thing that happened last time.
Token rules will be written up, and then totally ignored.
US economy is broken because there is no demand from the bottom, because everyone is flat broke or on the way there.
Will this finally be the death of "top down" economic theory?
naaah cos its the guys at the top making the rules.
Until the people of the US get up off their fat asses and have a country wide riot, things will not change.
Nope, it failed last time because it was a one-shot deal.
Despite the name, this is a permanent deal. That changes behavior. And I for one expect the people who run the companies in which my retirement money is invested to be working hard to keep it away from money sucking leeches.
Yes it will create jobs.. just not in this country unless you happen to be an illegal immigrant looking for work in the cleaning or landscaping industries. I'm surprised Vegas hotel owners aren't in on this, they employ thousands of low-paid workers, some of which actually work in IT. Of course they aren't paid any better than their room-cleaning counterparts, don't get benefits, have to work weekends and bank holidays with no overtime pay, don't get paid time off and are fired if they are sick more than 1 day a month.. but times are hard for casino-owning billionaires.
The video didn't work...
But it's on youtube... http://youtu.be/7itFRiTk0Y0
Look, I like Apple, and I love Google, really. And I have shares in both.
But this is pure blackmail from their part. "Look at the big pile of money! You need money, don't you? You can have, say... 5% of it, right away! Or wait forever. Your choice..."
Of course it's not. What they're saying is more like:
"We've got stacks of cash outside the US that we could be putting to use inside the US, but it's not worth bringing it into the country as the govt takes so much of it. We'd rather just leave it outside, and spend it there, unless you want to lower the tax rates..."
They're offering the government a way to make more money, not less.
Taxes too high.
When taxes are too high people will look to evade them. It's been shown that when taxes have dropped - tax revenues have risen - whether that is due to less evasion or growth - who knows but who cares?
Don't be too smug
I worked in the US for a British company that did (and probably still does, I no longer work for them) exactly the same thing.
For years the UK company made loss after loss in the US - at times the US turnover was almost 50% of the total business but we could never make a profit in the US. Every time we had cash in the US a large "administration fee" invoice would arrive that matched the US profits.
Stop the world
So repatriate at an extremely favorable rate, line the pockets of the shareholders who can then invest that money in their overseas businesses. Go USA, sell your souls
as opposed to
Rather than leaving it as it is now, where the companies can just spend the money on the overseas businesses without having to give even 5% of it to Uncle Sam?
idiots .. (here)
the reason these corps have piles of money and invest in production overseas, say in Ireland, is because the corp tax rates in Ireland are 12.5 % .. China 25% .. Taiwan 17% .. Singapore 17% ..Macau 12% .. Hong Kong 16.5% ..
USA up to 35% + up to 12% state .. where would you do business and create jobs if you ran a big bucks multinational ?
fuck lowering the repatriation tax .. lower the US fed corp tax rate to 15% and watch production and services return to the USA, and the jobs with them ..
US corps lose or make little on their US operations, therefore pay little tax .. or there is corporate cronyism with companies like GE given special tax breaks .. they make big profits overseas and keep the money and investments there .. where the tax rates are lower ..
"Providing American businesses with incentives to invest at home"
No it will provide MORE incentive to invest outside so you can get more tax free profit.
High taxes kill jobs.
High taxes kill jobs. If you make it expensive for people to do business and retain their profits they will move where it is cheaper - the only issue here is that it is 'easy' for the big guys to do this!
This idea is just plain stupid
The companies concerned won't invest in the US, labour (or labor in the US) is cheaper in places like China, India, Phillipines,etc. Therefore the investment will take place there and not in the US.
Payment of the savings to shareholders will provide some benefit to pension funds (mutuals) who hold shares but the biggest winners will be Jobs, Ballmer, Schmidt, et al who all own significant proportions of the shares in their companines and they don't need to spend it on the types of goods that most of us would spend it on. They will invest it though in companies who like them invest in the countries in the first point.
EU software firms will cry foul, such a reduction in tax could constitute unfair state funding for the IT industry in the US thus setting the stage for another US v WTO battle except unlike Antigua, Europe does have teeth and can certainly put in place barriers to trade that would hurt the US.
Countries where the money is currently held will simply offer better deals to the companies concerned around investment and corporatin tax in order to try and stop the repatriation of funds.
So anyone who thinks that this idea from someone paid a lot of money by some lobbyist to put forward this bill is going to help the US is just deluding themselves.
not really the case
fact is the US still manufactures more product and provides more high end services than any other country in the world .. most manufacturing here is highly automated and done in an energy efficient way .. we still have a fairly well educated and hard working labor pool, who are not making any more, in real terms, than they were 20 years ago
so labor costs are not the biggest factor ..
let's look at China or India, much of the labor is still hand work, so while cheaper, it might take 10 or 20 or 50 people to do the same job a computer controlled machine does in the US, Japan or some European counties
to make an item in China, on average, takes 3 times the energy it does in the US, because we have a fairly efficient infrastructure in terms of transportation, electrical, natural gas, etc. compared to China
The bigger difference is overall taxation and government regulation, including environmental regulation, product safety, work place safety standards and the cost of compliance for all this (sometimes reasonable) law
what needs to be addressed is the ability of these multinational corps, mostly based in US, Europe and Japan to operate in countries where the people of a country are basically slave labor working under unsafe conditions .. it is NOT fair trade to produce a product for the world market where the worker is subject to 70+ hours per week, oppressive and/or dangerous working conditions on wages that pay little more than the cost of food and clothing
A cost for being in the WTO, should be a tax based on a world minimum wage and complying with certain work place standards, those receipts should go to the very poorest of countries, directly to the people there locally, for food, sanitation, health and infrastucture
my guess though, would be that the countries like China would, to the minimum necessary, improve conditions and wages at home, before paying a tax destined for a poor African or South American country, however the net effect would be a move towards a more equitable fair trade of goods and the movement of capital a bit more towards the workers
you'd not see a big increase in cost of goods, because really, the cost of labor is no longer the largest factor in the manufacture of most goods
Give me the trillion dollars...
...and I will create jobs. Honest.
A tax break to 'create' jobs?
... that will only last for the duration of the tax break. Reduce costs by cutting out the middle men (Brin etc here's looking at you - how do you manage to live off you $1/year salary?) and let the government employ the people directly.
It ain't a subsidy if you call it a 'tax break'.
Need a sarcasm icon and a pigopolist icon
More Korporate Welfare...
Just more of the same old Fascist Korporate welfare, in this case giving companies a tax break for shipping jobs overseas.
Congress, that bunch of lawyers, loves to call things the exact opposite of what they are. The only jobs this will create are sweatshops in China and similar fascist loving regimes.
Some basic rules
1. Companies that do not pay taxes now will not start to pay taxes because the rate is only 5% instead of 30
2. A helpdesk employee makes, let's say, 12 USD an hour. His counterpart in Myanmar makes - say - 1.20 USD an hour. This can lead to basically 2 things : a) Every 10 jobs repatriated will lead to 1 domestic job, which isn't a problem, because helpdesk service is so dismal it can't get any worse or b) helpdesking costs are going to rise a dramatic 900%, which YOU will pay for when you buy your next TV.
3. A manufacturer that can sell 1000 fridges a year, and needs 100 people to do this, is not going to hire new people if he can't sell more fridges, irrespective of the tax rate. If you can't put an employee to work, you're not hiring.
4. This is about tax on PROFIT. If you can't turn a profit now, you're not going to turn one of taxes go down. If you ARE making a profit, the tax reduction is going to discappear directly into the shareholders pockets. No two ways about it.
5. Companies will NEVER commit to creating jobs, even if they get tax breaks. They will promise to do what they can. After the break is granted, they will say they try but can't do anything about it.
look after #1
As a non-US citizen, I don't want a tax-holiday to happen. Part of that corporate money sitting around in Europe, is keeping Greece afloat. It was paid for by Europeans, too.
As a US Citizen, I would like to know what the Crown would do if the Names at Lloyd's insured against the risks of getting caught smuggling.
I'm quite sure it would not be very pretty.
Profits from overseas trading are merely untrustworthy reports of profits from overseas trading until the Crown has it's share. That's not changed since the 18th Century. The communications are just faster.
Google need a tax break?
Don't they only pay something like 3-4% after they're finished bouncing it through Amsterdam and Ireland?
Just like Trickle down economics...
All you need to do is make a phone call to Microsoft Support, or most other major corporations tech support lines to plainly hear where all that tax break money went...
Or read the "Made in..." sticker or label on any product.
also .. consumers pay all taxes
all costs of doing business are reflected in the price of a product or service, therefore all tax on business is paid indirectly by the consumer of said products and services
while I'm not saying reducing tax on business would result in lower prices ( though it might to some degree because of competition ) , the true cost of government is always borne by it's people
it would be more honest, frankly, if all taxation were on individuals, be that income tax, various social insurance, sales-VAT, or asset-property taxes .. then the people would see directly the cost of the governments and have greater scrutiny .. instead the government seeks to pit "the people" in opposition to "corporations" fooling them into thinking, ultimately, that the people are not actually paying for all taxation
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