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back to article Tech giants' offshore cash-stashing is only ever a delaying tactic

Do companies have a duty to their shareholders to dodge as much tax as possible? Are Google, Apple and Facebook simply following the law as they ought to by shovelling everything through Ireland and Bermuda? Unsurprisingly, it depends on which law you think they're supposed to follow, for the law does, in fact, vary across …

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Facepalm

?

You don't need to bring the capital in; the company can just borrow inside the US whilst securing the loan on the capital that never entered the country you are borrowing in.

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Re: ?

True. But at some point those loans need to be repaid. Either out of US made profits, which will pay the US corporate income tax, or out of those foreign made profits, which will have to be brought into the US and will thus pay the US corporate income tax.

The one thing that Apple simply cannot do is borrow the money abroad, pay it out as dividends, and then use the profits stacked up offshore to repay the loans.

Absent a tax amnesty Apple simply cannot get those foreign profits into the hands of the shareholders without paying corporate income tax on said profits.

You can delay for a long long time but true avoidance is much more difficult.

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Anonymous Coward

Re: ?

Can they not wait until they use the money outside of the US for pre-tax expense? That way a profit is held in reserve and used to expense a cost that would have otherwise come out of post tax cash reserves?

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Re: ?

Sure. But only for expenses incurred outside the US.

They can't use it for an expense inside the US, no way Jose.

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Boffin

Tax deferral

A pound today has more value than a pound in 10 years' time. Deferring taxes for as long as you can adds value to a company's shares.

It is a truism that there are two certainties in life: death and taxes.

The question is how long can a company (which has an infinite life, in theory) defer its payment of taxes past the death of its owners?

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Anonymous Coward

Re: ?

@tim - you're forgetting global banks. You don't need to repay the loan in the same legal jurisdiction you borrowed the money.

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Re: ?

That's true: but the IRS won't let you do that. Not a chance.

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Anonymous Coward

Re: ?

I think you'll find it's not quite so black and white. This is where intra-company loans and other exotic instruments become useful.

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Anonymous Coward

Re: ?

It's correct that anything that pays out as dividend comes out of profits (and so will need to have been repatrioted) but for many tech busiensses shareholders invest for share price growth (capital gain). So long as the business keeps growing shareholders benefit from the price of the shares.

In this case the un-taxed profits held offshore can be used to fund investment and expansion and to mitigate the tax bill (a loan from the offshore company charged as a cost to the local company means reduced local profits for taxation and an enlarged money funnel offshore).

The company can also use this principle in a share buy-back scheme for instance, or taking over a competitor in order to pump up the price of the shares - so essentially creating a capital gain for share holders from untaxed profits, instead of a dividend out of taxed profits. M&A can iselft bring some significant tax advantages - for instance using losses from the acquired company to offset corporation tax - another method of repatriation via business growth.

(This method can also be used to benefit specific shareholders - eg by buying or investing in a specific shareholder's business - something akin to Apple buying NeXT).

The reason these tax-shenanigans are a problem is because not only does the local government not get tax due, but it gives a cost advantage to the company using offshore ploys over local businesses.

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Re: ? @Tim Worstal 09:06

>But at some point those loans need to be repaid. Either out of US made profits, which will pay the US corporate income tax, or out of those foreign made profits, which will have to be brought into the US and will thus pay the US corporate income tax.

Unless the US system is vastly different to the UK system, there will be no US corporation tax to pay: servicing the loans is an allowable business expense, sufficient monies from oversea's can be brought into the US to service these loans - after allowing for expenses incurred in the US there is no US trading profit...

I expect to see more companies following Apple's lead, particularly given the substantial difference between corporation tax rates and the cost of borrowing money.

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Re: ?

The thing is that they never need to repatriate the cash.

Apple, for example, didn't issue a dividend from 1995 to 2012.

http://money.cnn.com/2012/03/19/technology/apple-dividend/index.htm

That's not a problem for investors, because they also make money from stock market price increases.

If Apple has a pile of money sitting off-shore, that's an asset so it increases the value of the stock.

If Apple uses the money to buy stuff, IP or other companies outside the US, that also increases the value of the stock.

An investor can realize that value by either selling stock or by using the value of the stock as security for a loan (which they will get at a very low rate of interest) which they can use to invest elsewhere or spend).

And, as has been pointed out, corporations know that if they sit on a big pile of cash for long enough they can blackmail the US Government into letting them repatriate the cash at a hugely deducted tax rate (less than 10% instead of 35%). So they just wait for a decade...

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Anonymous Coward

Re: ?

"You can delay for a long long time "

And then go bust, and be resurrected with a different name and the same directors.

Well known tactic in the construction industry a while back, hopefully now eliminated (well I can dream can't I?).

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Simple fix for the US

If the US wanted to stop the tax dodging by companies that leave their money offshore then a simple fix would be to deem the money returned to the US three years after it is earned with the tax then being due. For a company to delay paying tax on overseas profits it would have to prove that the profits could not be returned to the US (e.g. if there was an exchange control that prohibited the movement of the money) .

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Not so simple

What about those foreign subsidiaries that are economic activity (employ 100s/1000s of locals, occupy office space, etc.)? Do they get hit by your undistributed profits tax? What about a trading trust? It's not a company. It doesn't pay dividends. How would it be hit by your deeming provisions. Also, at what point does a company cease to be part of the US tax group? eg. when its management and control is offshore?

What about foreign losses? Can they be carried back and the US taxpayer gets a refund of previously paid taxes (on prior profits)?

Tax law is never simple.

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Meh

"""Thus, the value of the NHS must be expressed as something other than the tax that it doesn't pay. That value being that it has been known, occasionally, to cure people of illness and disease."""

Classic.

Also I'm all for taxing people using something like a proper scaled VAT and dropping all the other indirect taxes, taxing on how much you spend is the most democratic way of taxing, because if you want to opt out of it all it takes is to save money spending wisely. It is the only way in which those that have more wealth would pay a fair tax.

But the Politicos will surely end doing the worst thing, use an unfair VAT, abusive income revenue tax, lots of equally abusive indirect taxes, etc. Oh wait....

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Nice in theory, complicated in practice

VAT is a regressive tax because the poor have to spend more of their income just to survive compared to the rich and so end up paying a higher percentage rate.

Thats not to say it's couldn't be made to work, you would need to apply zero rate VAT status to everything that is considered essential goods and services, and keep that list of goods and services up to date as time goes on.

What gets included on that list would be very politcal.

For example, a car is an essential item for a lot of people, without access to private transport access to jobs, entertainment and participation in a lot of what society offers is restricted or completely cut off. However there is a big difference between a Ford Fiesta and Ferrari 458 Italia. That means someone in Government/Civil Service needs to review everything, even different models within the same class of goods to decide on a tax rate which companies are going to want to game because it directly affects the price the end user will pay (see Jaffa Cakes)

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There's a name for this

"Consumption taxation".

You keep the Pigou taxes (APD, ciggies, booze, carbon emissions etc.....because they're there to correct market prices more than to raise cash). Then you abolish everything else.

Your tax system then comes down to taxing people on their spending. But you run it like an income tax.

Here's your income for this year. Now, how much of that did you save? That's all tax free. So you pay "income tax" on your spending.

Any earnings from your savings are also tax free: as long as you reinvest them. However, if you spend the earnings from your savings, or draw down your savings to spend the capital, then you pay that "income tax" on the amount that you have taken out of your savings.

Thus earnings from labour or earnings from capital are taxed at the same rate: nothing if you invest them or the full whack if you spend them. It's a consumption tax.

The Economist spent most of the 80s touting this as an idea but no one wanted to listen.

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Unhappy

I agree on the VAT but just you try suggesting that in public. The immediate response is that it penalises the less well off while benefiting the wealthy and nothing you say about tax-bands and exemptions for essential items or punitive banding for luxury goods will change their mind. A lot of people seem to really hate VAT.

I've tried to debate it on various forums but given up because of the vitriol. It clearly wouldn't be the simple system we have now so obviously would need careful thought but the politicians may be ignoring it because they know there's no way to have a reasoned debate about it.

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Anonymous Coward

"taxing on how much you spend is the most democratic way of taxing"

Depends on your definition of "democratic" In the sense of "everyone pays the same tax for the same spending", taxing on how much you spend is "proportional to the spending", but not "democratic".

You seem to ignore that a rich person is not going to spend proportionally to his/her amount of wealth. Yes, rich people may live in a house that is more expensive than the poorest, and pay a proportionally higher tax for that. But the metaphor fails because the proportion is not the same. You earn 1000 times more and perhaps spen "only" 100 times more, and then only on a few selected items.

As it has been highlited recently, no matter how rich you are there are certain things on which you are not spending proportionally to how much money you have: how many pairs of shoes, cars or whatever else are the rich getting in proportion to the average tax payer? As a human being there is a limit on how much you can spend, but there is no limit on the money you can earn. Don't forget how they became rich in the first place: either by inheriting the money or by making a very good use of it.

Taxing revenue, either coming from one's labor or from the investiments you made, is the only fair way of taxing. The only outstanding question -and one with a lot of ideological slant- is how much each source of income should be taxed.

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FAIL

"Don't forget how they became rich in the first place: either by inheriting the money or by making a very good use of it."

Of course, no one ever started a company, practiced a sport or mastered a musical instrument and made lots of money those ways.

Idiot.

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Unhappy

And this is where the complexity comes in..

A sound use for some of your VAT-paying expenditure is on some nice clever accountants. They then set up trusts, shell companies and what-have-you to ensure that you, personally, don't pay VAT. Everything you own is an asset of some company somewhere, neatly arranged so that VAT doesn't apply. Hey, you even get to set the Bentley's depreciation against tax!

So the stupidly-complex tax system comes about because any simple system is ripe for gaming by clever people.

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Re: And this is where the complexity comes in..

I'd argue it's the other way round, it's the stupidly complex tax system which is ripe for gaming.

What we need is a dirt simple, back of the fag packet type of calculation, that way there is nowhere to hide the money.

Personally, I'm in favour of either a vastly simplified income tax with a large personal allowance, same rate of tax regardless of source of money, so it doesn't matter if it's capital gains, salary, benefits (either from the state or from companies in the form of health insurance/company car etc) or investment interest it's all the same rate.

- or -

some sort of land value tax, on the basis that you can't move it outside of our tax jurisdiction. However although like the idea of a Land Value Tax, I haven't seen a good anwser to the issue of asset rich but cash poor people.

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Meh

Re: There's a name for this

@Tim re consumption taxation

The good thing about your / The Economist's proposal is that all types of income are liable to the same tax. Main problem with it is that poor people need to spend all they earn just to survive, so will not save anything and be taxable on everything. So the very least, the tax needs to have bands like current income tax bands where the first £Xk of spending is tax free, next £Xk at 20%, rest at 30% etc.

On a more 'macro-economic' level, if taxing income discourages people from economic activity, taxing spending discourages people from spending. It's to be seen of course but I suspect that this would crimp the economy more (at least short-term while people get used to it)

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JC_

Re: And this is where the complexity comes in..

However although like the idea of a Land Value Tax, I haven't seen a good anwser to the issue of asset rich but cash poor people.

Sell something :)

Estate taxes and land taxes should both be high. Money attracts money and these taxes are good ways of off-setting this undesirable fact.

VAT is grossly regressive and anyone who argues that replacing income tax with VAT is either deluded or cruel. Rupert Murdoch won't give a toss if he pays high VAT on his Bentley - he already has more money than he can spend - but someone living on the minimum wage spends every penny and every penny counts.

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Anonymous Coward

Stepping aside for a moment from your rather lucid, intelligent and civilized last paragraph, let's analyze your sentence:

" no one ever started a company" - Does not that count for you as making good use of money?

"practiced a sport or mastered a musical instrument" - Ah now I see. You must live in a country that is not the UK, the EU or the rest of the world, for that matter. Because in those places the richest people with the highest amount of income are not made up of the very few athletes that make it to the top, or the even smaller numbers of musicians that make a significant, above average, income. I feel happy for your planet, because a few rock stars together with some sport figures can by themselves solve the imbalance of public spending vs. taxes collected.

I suggest you keep yourself on that wonderful planet, and leave to us humble earthlings solve our own problems without insulting us and without ridiculing yourself in the process. Thanks.

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JC_

Re: And this is where the complexity comes in..

To my downvoter, which of the following statements do you disagree with and why?

* VAT is regressive.

* The consequences of massively unequal distribution of wealth are undesireable.

* The more wealth one has in surplus, the more there is available for investment, resulting in ever greater concentration of wealth in the absence of redistributive taxes.

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Re: And this is where the complexity comes in..

"To my downvoter, which of the following statements do you disagree with and why?

* VAT is regressive."

It isn't so much of a problem as is usually presented. Food, after all, is free of VAT, as is rent and mortgage.

Also, VAT on a second hand car, such as I have, is zero. On a £10k car it is £2k, and on a £100k it is £20k. Last time I looked, £20k was a bigger number than £2k. People who buy more expensive items, even of the same type, pay more tax. Are you saying that's a bad thing?

"The consequences of massively unequal distribution of wealth are undesireable."

Often claimed, though usually spelt correctly, but not proven. Consider, for example, China. Inequality has increased markedly in the last 10 years, due to fewer constraints on the market. Yet in those same 10 years more than 500m people have been lifted out of poverty in that country, because there are now fewer constraints on markets.

Maybe, despite what you might want to be true, greater inequality is a by-product of generally increasing wealth overall.

"The more wealth one has in surplus, the more there is available for investment, resulting in ever greater concentration of wealth in the absence of redistributive taxes."

Investment is generally regarded as a good thing - investment in companies after all produces jobs (including my own). Perhaps, as a by-product, it increases inequality, but so what if the overall effect is good?

If taxes are too redistributive, they may reduce or remove the incentive to invest and create jobs. Which in turn lift people out of poverty.

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FAIL

"practiced a sport or mastered a musical instrument" - Ah now I see. You must live in a country that is not the UK, the EU or the rest of the world, for that matter. Because in those places the richest people with the highest amount of income are not made up of the very few athletes that make it to the top, or the even smaller numbers of musicians that make a significant, above average, income. I feel happy for your planet, because a few rock stars together with some sport figures can by themselves solve the imbalance of public spending vs. taxes collected."

Are you saying Bono isn't rich? That Sting doesn't have a butler, and his wife access to a private jet?

And that the richest woman in the UK (leaving aside the queen, for the moment) has written some books, and inherited nothing whatsoever?

I don't begrudge those people their comfortable lifestyle (though I could do without their lectures to the rest of us) but at least I acknowledge that they exist.

You're still an (anonymous) idiot.

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JC_

@Mike Street

And that the richest woman in the UK (leaving aside the queen, for the moment) has written some books, and inherited nothing whatsoever?

It's interesting that you illustrated your point with the UK's richest woman (leaving aside the queen...) and not man. The richest man is Lakshmi Mittal, a steel magnate; Mittal's father ran a ... steel business.

The next two on the list are Alisher Usmanov and Roman Abramovich, both Russian oligarchs. As some might say, behind every great fortune lies a great crime.

Next is Duke of Westminster, who with a name like that mustn't have inherited anything.

Next is Ernesto Bertarelli, who became CEO of his father's pharmaceutical company upon his old man's death. What a nice comfort in his time of grief.

And so it goes on. Even an 'idiot' should be able to spot the pattern here.

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JC_

Re: And this is where the complexity comes in..

* VAT is regressive. It isn't so much of a problem as is usually presented.

And yet it is. It's very simple: whenever a poor person and a rich person buy the same item, the poor person pays a greater proportion of his or her income in VAT. That's the definition of regressive.

People who buy more expensive items, even of the same type, pay more tax. Are you saying that's a bad thing?

They pay proportionately less even though they can afford more; that is what I'm saying is a bad thing.

Maybe, despite what you might want to be true, greater inequality is a by-product of generally increasing wealth overall.

Try this thought experiment to test your real attitude to income inequality: where would you choose to live if you were born into a random family, Denmark or Brazil?

If you answered Brazil, then you'll have lovely beaches upon which to sell snacks, but opportunities for fulfilling your potential have historically been few. Thankfully though, the situation is getting better, thanks in part to the redistributive policies of Lula and Rousseff.

If taxes are too redistributive, they may reduce or remove the incentive to invest and create jobs. Which in turn lift people out of poverty.

The point at which higher income tax rates become counter-productive (i.e. the down side of the 'Laffer Curve') is approximately 70%. A rate that high would sting, but people would indeed still work, so it's not fanciful to suggest it.

Estate taxes, on the other hand, what's the argument against them? That it would remove the incentive to be born into a rich family?

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"Of course, no one ever started a company, practiced a sport or mastered a musical instrument and made lots of money those ways."

All of those involve investment, which means you put in money and likely time to get the return on the investment. The point still stands.

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Land value taxation

" - or - some sort of land value tax, on the basis that you can't move it outside of our tax jurisdiction. "

LVT has much to recommend it - if set at a rate which encourages better use of land assets.

So this one isn't an "or", it's more an "and", because if you try to use LVT entirely to replace income, VAT, sales and profits taxation for funding the expenses a modern democratic states engages in, it would have to be set at such a high rate that all land would revert to the state so you wouldn't collect any tax. That's why personally I favour a combination of LVT and Tobin taxes, the latter to be collected at a fixed rate in a fully automated manner upon all bank transactions.

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Anonymous Coward

"You seem to ignore that a rich person is not going to spend proportionally to his/her amount of wealth"

In turn, this counter-argument seems to ignore that many rich people feed back into society in the process of getting rich, by creating jobs and generally stimulating economic activity.

It is often overlooked that shareholders of profit-making companies includes not just wealthy investors but many many other entities such as pension funds, which directly affects far less well off people in a positive way.

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Anonymous Coward

"shareholders of profit-making companies includes not just wealthy investors but many many other entities such as pension funds, which directly affects far less well off people in a positive way."

Widely-repeated borrocks, but still largely borrocks nonetheless.

The vast majority of ordinary working people (at least in the UK, some other countries admittedly do better) don't have any kind of pension fund.

Many rich people have big pension funds. Ask any senior director or senior banker, or even just read a decent newspaper or company report or...

There are a lucky few in the middle, working people who in recent decades may have built up pension funds in a decent scheme and might be able to retire in reasonable confidence, but probably not luxury. I'm hoping to be one of them soon.

However, the rapid death of the "defined benefit" pension scheme will soon likely mean that, once again, pension funds will be irrelevant to the 99%.

So away with your "pension funds are for everybody" nonsense. The CIty may well *wish* everybody had a pension fund (hence auto-enrolment) but that's another story.

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Re: And this is where the complexity comes in..

> Estate taxes, on the other hand, what's the argument against them? That it would remove the incentive to be born into a rich family?

No, simply that people with excess wealth will sell up and move it abroad. Perhaps they will take out large joint mortgages with vast sums of life insurance. My family paid 93% last time around thanks to the Labour government before Thatcher. All the work the parents had done to help their children was taken by the government and given to strangers. The impact is that we are now all far more tax aware. Sure, the government "got their bit" out of senile old lady without the presence of mind to plan well, but it was a one-off. It will never happen again. Inter-generational tax planning is now firmly on the family agenda. If nothing else, you leave your income in the company for the next generation to extract as required. Its all taxed as normal, but at income rates, not death duty rates.

I think you'll find that money is more mobile than legal jurisdictions. Also, corporates tend to have work facilities which are abusable. For example, Mr Gates could easily suggest arrange a business meeting in Monte Carlo just when the Grand Prix is on. Oh and I think the use of the corporate jet is appropriate.

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Joke

I'm sure someone can find some use for Facebook.

Helps identifies weak minded individuals and even keep them on their sofa and off the street to an extent? Reducing the cost of government surveillance by providing private information for free?

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Her Majesty's Royal Tax Harvesters.

Assess everyone as owing the national debt in tax every year, then have them prove otherwise.

I've seen this in action, it certainly, if not, shakes the tree, bulldozes it over.

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NHS occasionally cures people

As an NHS employee I strongly object to the suggestion that we cure people. That would be in direct contravention to our secret orders from the government to as part of the pension time bomb reduction plan.

Uh-oh, I have said too much, does anyone know a good hotel in Hong Kong ?

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Re: "Companies don't pay taxes, people do"

"It's some combination of the shareholders and the workers that bear the actual burden of it. How that is apportioned between the two ...."

How that is apportioned between the two is already heavily skewed in favour of shareholders and against the workers. If the company uses some excess cash to increase salaries or give bonuses, that will be taxed at the highest rate the workers already pay, typically around 35-40% in most European countries and up to 50% and more for high earners.

Dividends on the other hand are typically taxed at around 15%. Even if dividends aren't paid out, a company's cash pile contributes to it's share price, so shareholders can cash out, paying capital gains tax which is also typically around 15%.

That's not even mentioning that shareholders do not take kindly to using 'their' cash pile to increase workers' salaries, except for the mega-salaries + bonuses + golden-parachutes/rewards-for-failure for the top execs (although thankfully this is changing)

So yes, sure, go ahead with scrapping company tax and an amnesty for repatriating funds, but to do that fairly you first need to

a) tax all income at the same level. Earned income, bonuses, dividends, capital gains, inheritance etc etc all go into one 'Income' pot that is taxed at the same level.

b) benefits provided to an individual by a company are accounted as income and taxed as such

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Re: "Companies don't pay taxes, people do"

"Dividends on the other hand are typically taxed at around 15%". That's because dividends are paid out of company profits and have already been taxed once, at a rate not far from basic rate income tax. Hence dividends (in the UK) are only subject to higher rate income tax. By all means tax dividends at the same rate as other income, but you'd (logically, if logic has any place in taxation :) have to allow them as a corporate expense, just like salaries.

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Flame

US Tax deferral is fraud....

... or at least, highly cynical.

As article says, the only way to use your offshore stashed profits is to repatriate them. So, the asset value of those balances is 65% of the money value, yes? Well no, when totting up the "cash pile" of companies like Apple, the offshore balances are added at face value. This means that the "market" is pricing in the idea that they will, at some point, get repatriated at a low or zero rate of tax. So either (a) this ain't gonna happen, and the valuations of these companies is off, or (b) big companies can budget for a tax amnesty to occur frequently enough that they can reasonably expect to be able to make use of the entire balance.

That's the usual one-rule-for-them situation. Sigh.

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Re: US Tax deferral is fraud....

As the article notes, the main thought is that the money never enters the US directly. Instead, Apple will look for foreign locations to build plants and so on. These plants affect the company as a whole, boosting the market cap without directly taxing the increased market value until cashout time. And even there, there are supposedly a few tricks to evade that: such as borrowing against the gains and dying with the debts. This may have changed, but some assets can be re-based when they're inherited, allowing the heirs to pay off the debts by selling out at a reduced tax burden.

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WTF?

Second point

"The second point is this bizarre idea that the tax an organisation pays to the Treasury is the measure of good that it does the country"

I'm not sure where this fits into the argument at all. Are you arguing that since Google provides such a huge benefit to a country then Google should not be taxed? That's a very bizarre way to look at things. If all the shopkeepers in Britain combined together in one shell company, do they not contribute a greater benefit to the country than Google? (and therefore should they also be exempt from tax?) But it's OK to tax them individually?

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Re: Second point

No, I'm running that argument the other way around. There's plenty out there insisting that because Google doesn't pay tax in the UK therefore it offers nothing of value to the UK economy.

Which is ridiculous because consumer surplus.

Whether Google should be taxed and how much is an entirely different question from whether it is providing value or not.

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Happy

Re: Second point

Ah, understood.

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Which is ridiculous because consumer surplus.

But, unfortunately, 'consumer surplus' is a fantasy.

Yes, I choose to use Google, because it's there. But to suggest that I wouldn't use anything, if Google ceased to exist, is nonsense. I'd use Infoseek, or Yahoo, or DuckDuckGo, or even Bing.

'Consumer value', in your definition, only exists where no alternative service exists.

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Tobin was right

Another approach exists instead of employing an army of accountants and tax officials trying to work out which transactions lead to profits where, and which transactions lead to income and which do not, and which lead to value added and which don't. That's to get rid of all these taxes and tax all bank transactions instead at the point at which these are made, but at a lower rate. Means you have to get rid of cash though, or replace it with a different kind, e.g. carrying a duty to remain valid, e.g. 10% of its value every year so notes and coins have to go into a special machine a year after issue to be replaced at 90% face value in new ones.

That would probably lead to a very different kind of economy with much less emphasis on debt-fueled growth.

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Re: Tobin was right

That would just encourage people not to save. Why put money away if it's going to be worthless in a few years? the British welfare state is bad enough at the moment, where the really well off don't care, the ones at the bottom get some degree of government aid but the ones in the middle who might do something stupid like save a bit for retirement suddenly find that the existence of those savings means they don't qualify for any of the benefits for which they've probably paid a significant amount of taxes over the years. So, if you've got any savings, blow them on a holiday just before you get to retirement, otherwise you'll never see the value of them.

I think if you visibly devalued money every year (as opposed to inflation doing it quietly) then you'd have rebellion.

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Companies don't pay taxes, people do.

Well, not all economists agree. I don't agree.

Companies (legal persons) must pay taxes because they compete with physical people. Therefore, they should pay taxes.

As for companies giving money back to shareholders.. it is not fundamental to get the money from then bank and pay them: you can also raise the value of the shares, they sell shares, and don't pay that many taxes... Microsoft style.

This kind of behavior has also other problems: taxdodgers are encouraged not to invest of manufacture in the US (or UK or whatever) in order not to pay taxes...

In my opinion, VAT should be payed where the sale is made: if you sell to somebody in France from Ireland, that VAT should go to France. And that should be arranged by Ireland, not the seller (this is, all sales should include buyer address).

As for "benefits" going to Barbados, etc, it is illegal in many places and should be banned AND procecuted.

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