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Battle Lines Being Drawn As Obama Plans To Curb Tax Avoidance

ScuttleMonkey posted more than 5 years ago | from the getting-worse-before-they-get-better dept.

United States 1505

theodp writes "Barack Obama has squared up for a major battle with big business, announcing a crackdown on offshore tax avoidance and evasion by US multinationals that's designed to raise $210B and make it easier for companies to create 'good jobs here at home'. Obama cited a building in the Cayman Islands where more than 18,000 US companies are housed: 'Either this is the biggest building in the world or it is the biggest tax scam in the world,' he said. 'I think the American people know which it is.' The administration says that more than a third of US foreign profits in 2003 came from Bermuda, the Netherlands and Ireland, and noted US companies paid an effective tax rate of just 2.3% on the $700bn they earned in foreign profits in 2004. Among tech companies affected by the crackdown, Microsoft joined 200 companies who signed a letter complaining that the proposed tax changes would put them at a disadvantage with their rivals, Cisco moaned that the measures 'would adversely impact our ability to invest and grow our business in the US,' and Google declined to comment for the time being."

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Not a tax scam (5, Funny)

Aranykai (1053846) | more than 5 years ago | (#27821677)

Its a building of holding... Duh.

Bend Over, Biz, the Taxman cometh !! (0)

Anonymous Coward | more than 5 years ago | (#27821791)

And he wants to do you but good !!

Re:Not a tax scam (4, Funny)

Timberfox (1537013) | more than 5 years ago | (#27821797)

are you allowed to place a Building of Holding inside of another Building of Holding? I figure this would make some sort of unvierse imploding paradox, that rips apart the space-time continuum.

Re:Not a tax scam (4, Funny)

ArsonSmith (13997) | more than 5 years ago | (#27821949)

Whoa!! I just figured out why we don't have bags of holding.

Because we are all trapped in one!!!

AHhhhhhhhh.....

Re:Not a tax scam (4, Insightful)

Anonymous Coward | more than 5 years ago | (#27822063)

This may be the best summary of the M-Theory I've heard.

Re:Not a tax scam (3, Insightful)

Anonymous Coward | more than 5 years ago | (#27821803)

So when is Obama going to go after tax cheats like Tim Geithner, Tom Daschle, Nancy Killefer, and Hilda Solis?

Oh, right. Those tax cheats he nominated for cabinet positions. What a hypocrite.

Avoision. (2, Funny)

Sockatume (732728) | more than 5 years ago | (#27821705)

Avoision.

two ways to solve the tax "scam" (5, Insightful)

z-j-y (1056250) | more than 5 years ago | (#27821731)

two ways to solve the tax "scam"
1. raise overseas tax
2. lower domestic tax

guess which road the government takes.

Re:two ways to solve the tax "scam" (4, Insightful)

Leafheart (1120885) | more than 5 years ago | (#27821805)

There is a third way.

Do both

Re:two ways to solve the tax "scam" (3, Interesting)

Austerity Empowers (669817) | more than 5 years ago | (#27822055)

And depending on which iteration of the article you have read, that's kind of what everyone is predicting. We'll lower corporate tax while closing loopholes. It's regrettable that this will be necessary, but we've spent 7 years funding multi-nationals in setting up operations outside the US, so they can create some amount of trouble, it's just not optimial for either the US or them.

On the other hand, we will at least regain some control over what is outsourced. Right now "if it doesn't need to be done here, ship it". This is leaving companies full of redundant white collar middle management, with no real skills or intellectual output. If we make some changes we can theoretically retain some of the R&D work we want to keep here, and by proxy, some of the MFG/"know how" and infrastructure required to do that.

I am curious who MS's competitor is that they'd me "disadvantaged" to. The same goes for pretty much all of them, I know who my company's major competitors are, and I know they're US based and off-shoring because of each other. I am not aware of any purely foreign based company that is even on our our top 10 competitive threats. In fact 99% of the market is divided into 3 major competitors, all US based.

Re:two ways to solve the tax "scam" (3, Insightful)

Anonymous Coward | more than 5 years ago | (#27821821)

Yes, let's reward the companies for taking advantage of the system and screwing the country they benefit from.

Re:two ways to solve the tax "scam" (5, Insightful)

SoapBox17 (1020345) | more than 5 years ago | (#27821921)

That's an incredibly simplistic view of the situation. Lowering taxes isn't a "reward" for bad companies. It is an "incentive" to all companies to do more business in the US (rather than in other countries where the taxes are lower). It is more of a "decreasing a penalty" than a "reward".

Usually when the government lowers taxes they see an increase in tax revenue because of increased spending since taxes are lower. Instead of easing penalties or adding incentives to do business in the US, the administration has instead elected to add more penalties. Two guesses how that will turn out.... Not like it hasn't been tried before.

Re:two ways to solve the tax "scam" (1)

JAlexoi (1085785) | more than 5 years ago | (#27822017)

The current crisis has shown that spending cannot grow indefinitely just because you are borrowing from a bank!
And in current situation there will be no increase in collected taxes, when taxes go down. You know, recession.

Where is the crossing line for lowering tax rates? (5, Insightful)

sirwired (27582) | more than 5 years ago | (#27822087)

It is not the case that "usually" lowing taxes increases revenue. It hasn't seemed to work too well for the last several rounds of tax cuts. Certainly there is a point where lowering taxes reduces total revenue. That point is a tax rate somewhere between 0 and 100%; where? That's up for debate.

Many economists would argue we passed that point some time ago.

SirWired

Re:two ways to solve the tax "scam" (1)

Improv (2467) | more than 5 years ago | (#27822101)

Usually when the government lowers taxes they see an increase in tax revenue because of increased spending since taxes are lower.

This is completely wrong. There's a simple dynamic at work (one just as simple as the supply-demand curve in markets), and tax income can be understood to be based on that dynamic.

Re:two ways to solve the tax "scam" (4, Insightful)

Kohath (38547) | more than 5 years ago | (#27822109)

Maybe they don't see a benefit in proportion to the amount of taxes they're being forced to pay. I certainly don't.

Also, we have a lot of unemployed people. We want companies to do more business and make more money so they can hire people. You think penalizing them and taking money from them is going to help with that?

Corporate Executive: I wonder if I should invest in the USA, where the people hate us, the government really hates us, and they want to take our money? Hmm. No. I should try to grow the business in a more friendly country. Or maybe I'll just take my money and retire early. I hear Costa Rica is nice.

Re:two ways to solve the tax "scam" (2, Interesting)

azgard (461476) | more than 5 years ago | (#27821883)

There is also:
3. Invade tax havens.

I am serious. Tax havens are parasitic states - they attract large companies and rich people by having very little taxes, but these taxes (and services for these companies) are large enough to comfortably feed the local population; while their own production capacity is nil. This is a minority strategy, and should be fought against.

Re:two ways to solve the tax "scam" (2, Insightful)

moosesocks (264553) | more than 5 years ago | (#27822131)

Wouldn't a trade embargo sufficiently solve the problem without killing anybody?

Re:two ways to solve the tax "scam" (3, Insightful)

Kohath (38547) | more than 5 years ago | (#27822147)

And enslave the people there to produce for you. You might as well. It's a logical extension of your philosophy.

Re:two ways to solve the tax "scam" (5, Insightful)

mollog (841386) | more than 5 years ago | (#27821891)

Will the anti-tax people please explain how to pay for two wars and a large military budget?

Thanks in advance.

Re:two ways to solve the tax "scam" (3, Informative)

Anonymous Coward | more than 5 years ago | (#27821965)

Jesus died for our bugdet deficits.

Re:two ways to solve the tax "scam" (1)

thrillseeker (518224) | more than 5 years ago | (#27822005)

By not pissing away money on other things.

Re:two ways to solve the tax "scam" (1, Insightful)

RoFLKOPTr (1294290) | more than 5 years ago | (#27822095)

By not pissing away money on other things.

You mean like roads and fire departments and such?

Re:two ways to solve the tax "scam" (1)

mollog (841386) | more than 5 years ago | (#27822135)

By not pissing away money on other things.

No, no, you don't get it. We're not going to collect any taxes at all. Nothing.

Now, tell us how to pay for the wars.

Re:two ways to solve the tax "scam" (5, Funny)

PCM2 (4486) | more than 5 years ago | (#27822151)

By not pissing away money on other things.

That's right -- eternal war should be America's first priority! Show me a legitimate "other thing" and I'll show you a traitor to the homeland.

Re:two ways to solve the tax "scam" (0, Interesting)

Anonymous Coward | more than 5 years ago | (#27822031)

In addition to pulling out of at least one of the wars and never making such a dumbass mistake again:

1. Tax revenues correlate with economic growth, not tax rates. This is reality despite your desire to believe in it or not.

2. Lower tax rates spur economic growth. This is reality despite your desire to believe in it or not.

Will you taxation groupies please do the fucking math one of these days? Please???? Just step outside your little reality distortion bubble for five fucking minutes?

Re:two ways to solve the tax "scam" (0)

Anonymous Coward | more than 5 years ago | (#27822077)

Will the anti-tax people please explain how to pay for two wars and a large military budget?

Simple: Don't ever go to war. That way, we don't need a military, and then we don't have to pay them, and who would want to go to war with anyone without a military? Not me, that's for sure.

Plus, when we get rid of all our taxes and government, we'll all live in glorious, glorious anarchy, and you'll all agree with me because I'm obviously so smart and then everyone else in the world will instantly agree with us and cast down their swords and pick up their rakes and shovels and the world will be happy and never fight again and unicorns will be reborn and shit rainbows and candy on the world and then Jesus will come back and we'll all be HAPPY DAMNIT WHY THE HELL CAN'T YOU SEE THE OBVIOUS LOGIC IN REMOVING ALL TAXES?!?!?

Re:two ways to solve the tax "scam" (2, Insightful)

khallow (566160) | more than 5 years ago | (#27822099)

Even if we can't stop fighting those two wars, we can fight them a lot cheaper. How to do that? I see the key problem in procurement and logistics contracts. Eliminate cost plus contracts, concurrently eliminate the ability of government to arbitrarily change contracts at the expense of the contractor (the primary risk driver for cost plus contracts), and only purchase military equipment that has three or more independent suppliers (including big ticket gear such as aircraft carriers and fighter jets).

Re:two ways to solve the tax "scam" (1)

JAlexoi (1085785) | more than 5 years ago | (#27821967)

You must be joking. There is a logical way of doing things. Sign 2 way agreements with a bunch of major, non tax haven, countries, that will only add tax equal to the positive difference in tax rates. And only to funds transfered from one country to another, that is if money stays in the originating country no taxes are due.
That would break the neck of all those tax havens. Tough luck, people. The companies would not pay more than they would pay domestically on income coming from a non tax haven country with lower corporate income tax.

Re:two ways to solve the tax "scam" (1)

RiotingPacifist (1228016) | more than 5 years ago | (#27822033)

1. raise overseas tax and get some tax of companies (theoretically allowing you to tax individuals less)
2. engage in a race to the bottom, where companies end up paying no tax at all because some island somewhere offers 0.01% tax

Re:two ways to solve the tax "scam" (1)

CrimsonAvenger (580665) | more than 5 years ago | (#27822115)

1. raise overseas tax and get some tax of companies (theoretically allowing you to tax individuals less)

Theoretically allowing you to hide how much you're taxing individuals better, you mean?

Or do you really think that if you increase costs to a business they're not going to pass the costs along to their customers?

Re:two ways to solve the tax "scam" (1)

Uzbek (769060) | more than 5 years ago | (#27822051)

Offshore companies pay 0% tax in places like Cayman Islands. I don't see US lowering its corporate tax to 0% any time soon. So, as long as there is any corporate tax in the US, it is more desirable for companies to register offshore branches.

Obligatory Kent Brockman reference... (1)

xmason (206262) | more than 5 years ago | (#27821733)

Krusty the Clown has been arrested for tax avoision...I don't say evasion, I say avoision.

w00t! (3, Insightful)

Improv (2467) | more than 5 years ago | (#27821745)

I'm not a big fan of the system, but fixing it is a big step in the right direction. I wonder if/when we'll see the EU do the same thing (e.g. with Monaco).

Re:w00t! (4, Informative)

Elektroschock (659467) | more than 5 years ago | (#27821809)

You know the EU-Commissioner for financial regulation is Irish, he was the architect of the Irish tax evasion wonder for high tech companies.

When you buy software from Microsoft in Europe it comes from MIOL (Microsoft Ireland Operations Limited). Ireland is a gigantic tax evasion scam for American software companies which drain European markets including government customers without contributions to our social welfare states.

As one Hungarian said to Ballmer: Give us our money back!

Re:w00t! (2, Insightful)

homer_s (799572) | more than 5 years ago | (#27821893)

As one Hungarian said to Ballmer: Give us our money back!

And what did the Hungarian do to earn the money? Did he invest his savings and time to start a company?

Re:w00t! (4, Insightful)

Improv (2467) | more than 5 years ago | (#27821959)

You don't have to "earn" the right to be treated like a human being and a member of society. It's a duty of everyone to help with that.

Re:w00t! (1, Informative)

Anonymous Coward | more than 5 years ago | (#27822061)

No he paid the taxes that were properly due in his country and simply expected Microsoft to do the same. How odd.

Re:w00t! (3, Insightful)

JAlexoi (1085785) | more than 5 years ago | (#27822075)

And what did the Hungarian do to earn the money?

He probably did this preposterous thing called WORK. Just imagine the nerve of some little person asking to be compensated and not scammed by tax evasion.
I have to repeat myself: Preposterous!

Re:w00t! (5, Insightful)

LWATCDR (28044) | more than 5 years ago | (#27822121)

Why blame Ballmer and Microsoft?
Ireland offers these companies a way to pay less in tax. You really expect them to not take it?
Ireland sees it as a way to increase their income so they do it. If you want to blame anybody then blame Ireland and or the EU in general.
Hey I am not a fan of Microsoft but in this case the blame seems really misplaces.
Of course you could just stop buying Windows.
You have Linux, BSD, and even Solaris now to choose from and build a local software industry around or you can keep buying Windows and pumping money out of your country. Windows is probably the path of least resistance... Kind of like going through Ireland for software sales.

Wont increase taxes on middle class (5, Insightful)

ArsonSmith (13997) | more than 5 years ago | (#27821749)

What does he think is going to happen? These evil rich businessmen are going to go out and deliver pizzas in their free time to pay the extra taxes? Corporate taxes are exactly the same as raising income tax, except you are paying at the point of purchase rather then the point of earning. The only real point of corporate taxes is to give the government the ability to punish companies that fall out of favor.

Re:Wont increase taxes on middle class (1)

91degrees (207121) | more than 5 years ago | (#27821859)

Company overheads really don't have a lot of impact on the cost of goods. Increase the price and sales go down. Otherwise they'd just increase the price.

Re:Wont increase taxes on middle class (1)

skiflyer (716312) | more than 5 years ago | (#27821903)

That actually depends on your spending/saving ratios and whether you're discussing necessary goods or luxury goods.

Granted, in the current state of the US economy a lot of what you're saying is true since people spend every penny they make (and usually a few more).

Re:Wont increase taxes on middle class (5, Insightful)

JCSoRocks (1142053) | more than 5 years ago | (#27821933)

Thank God someone else realizes this. Although I must point out that taxing companies can also be used for shaping or encouraging a specific type of behavior. E.g. 10% tax rate for all companies and then you get .5% off for being green or .5% off for R&D spending.

I'm tired of seeing people duped into clamoring for corporate taxes as though they'll somehow benefit from it. Can we replace everything on TV with basic economic and political education for a month? People need figure stuff like this out. Politicians drag out the same tired tricks over and over and the sheeple eat it up like it's free candy.

Re:Wont increase taxes on middle class (5, Insightful)

Xabraxas (654195) | more than 5 years ago | (#27821963)

What does he think is going to happen? These evil rich businessmen are going to go out and deliver pizzas in their free time to pay the extra taxes? Corporate taxes are exactly the same as raising income tax, except you are paying at the point of purchase rather then the point of earning. The only real point of corporate taxes is to give the government the ability to punish companies that fall out of favor.

You're really going to defend tax cheats? They make a ton of money from US customers and they live in the US but they don't have to pay there fair share of taxes?

It all makes sense after reading your sig...

Socialism is a tool of fascists. Used to ease the minds of the masses and to present power grabs in the veil benefits.

You don't know anything about socialism or fascism. If you really believe your own line then you would be calling pretty much all of Europe fascists. I'm not sure anyone else is really going to agree with you other than other whackjobs.

Re:Wont increase taxes on middle class (2, Interesting)

jav1231 (539129) | more than 5 years ago | (#27822119)

"You're really going to defend tax cheats? They make a ton of money from US customers and they live in the US but they don't have to pay there fair share of taxes?"

If the money isn't earned here then tax shouldn't be paid here. Also, people who have their money taxed at earning and want to store it overseas to avoid inheritance taxes and capitol gains I frankly applaud.

Right now Obama had damn well better figure out how to incentivise corporations. He seems to think the government can simply hire those out of work and this is just not the case.

Re:Wont increase taxes on middle class (4, Insightful)

RiotingPacifist (1228016) | more than 5 years ago | (#27822125)

You make 2 flawed assumptions
1) consumers will be willing to pay more
2) price is in related to production cost.

There are few markets where these are true, generally price is the optimum price for making money from customer ( ~= the most most customers will pay).

Influence tax policy the old fashioned way... (0)

Anonymous Coward | more than 5 years ago | (#27821751)

...buy a congressperson!

Hmm. (0)

Anonymous Coward | more than 5 years ago | (#27821755)

Something tells me he won't follow through on this when he realizes those same corporations helped get him into power.

Re:Hmm. (1)

Duradin (1261418) | more than 5 years ago | (#27821929)

"Something tells me he won't follow through on this when he realizes those same corporations helped get him into power."

Passing this would be a great thing for those corps and for Obama.

Obama gets to be tough on those evil, tax cheating corporations.

The corporations get a plausible excuse to officially move their HQ offshore, "we can't afford to do business here anymore."

End result, Obama gets the vote next election and the corps get to rake in even more profit without having Uncle Sam looking over their shoulder anymore.

Later, some politician will get to "try" to bring back the big formerly American corps, to help out the working class of course, but to be sure they don't get taxed out of doing business here they'll get special low tax rates for some period of time.

oh no (5, Funny)

Anonymous Coward | more than 5 years ago | (#27821761)

Not my free market! Take your hands off my free market Nobama!

Oops we're bankrupt, give us money Mr. President :(

Am I cynical? (5, Informative)

NathanE (3144) | more than 5 years ago | (#27821781)

Am I cynical to think that these businesses will just raise the cost of their goods to cover the additional tax, thus making consumers the ones to pick up this $210 billion tab? I somehow doubt that publicly traded companies are excited to see the earnings hit show up in their quarterly statements.

Re:Am I cynical? (4, Funny)

ArsonSmith (13997) | more than 5 years ago | (#27821873)

Nope, they're going to pick up paper routes to make up for the difference.

Re:Am I cynical? (4, Insightful)

Tokerat (150341) | more than 5 years ago | (#27821907)

They'll have to. Their business model depends on being able to "compete" with lower prices by cheating on their taxes. Money which could have been used to keep your children healthy, or educate them, or yes, even fight terrorism. What's worse, they did it so much that now the apparently depend on it.

If you can't make a profit playing by the rules then stop trying to make a profit and die. That's how the system is supposed to work, isn't it? (Whether or not that's a dumb idea is an entirely different debate...)

Market rules work for countries, too (5, Insightful)

mangu (126918) | more than 5 years ago | (#27822093)

If you can't make a profit playing by the rules then stop trying to make a profit and die

This is more or less what's happenning to the USA as a whole. American companies simply cannot compete against foreign companies, that's why the industrial sector is moving to Asia. It's useless to say "stop trying to make a profit and die", they died a quarter century ago [msn.com] .

It's the US government at all levels, federal, state, and local, that should learn to live by the rules. When the corporations are moving overseas to places with lower taxes this means your taxes are too high, you should cut government spending and taxes at the same time.

Re:Am I cynical? (0)

Anonymous Coward | more than 5 years ago | (#27821925)

Am I cynical to think that these businesses will just raise the cost of their goods to cover the additional tax, thus making consumers the ones to pick up this $210 billion tab? I somehow doubt that publicly traded companies are excited to see the earnings hit show up in their quarterly statements.

If they increase prices they will become less competitive, this is true even for large companies. They can't just increase prices.

Re:Am I cynical? (1)

je ne sais quoi (987177) | more than 5 years ago | (#27821941)

What makes you assume that all companies are doing this? The way I see it, the companies who are actually paying their taxes, or are too small to afford this kind of creative accounting, are being penalized for being honest. That sucks.

Re:Am I cynical? (2, Insightful)

Stalyn (662) | more than 5 years ago | (#27821951)

Maybe the government should break out the antitrust laws as well, so when companies do decide to increase prices consumers will have
cheaper alternatives.

Re:Am I cynical? (1)

Gat0r30y (957941) | more than 5 years ago | (#27821989)

Name one major business based in the Cayman Islands that is willing to raise prices in the midst of a major recession. The company I currently work for is included in this group. We don't get to just set prices in our market. Consumers aren't going to be picking up our tab. We may have to pay taxes on our profits (for the services we receive from the government like Patent Law enforcement and roads and such) causing us to lower dividends, but we cannot just raise prices in our market since we don't have a monopoly and we are competing primarily with large Japanese and South Korean companies.

Re:Am I cynical? (0)

Anonymous Coward | more than 5 years ago | (#27822071)

Yes, you are, but I'm glad that you raised that possibility for yourself. OK, you're a competitor to Cisco, but you do make a line of routers that do work as well, if not better than Cisco. The Cisco CEO moans and groans about the lost tax haven (they're always moaning about something), so they increase their price, because the poor CEO who makes millions of dollars per year doesn't want to see his paycheck reduced. What do you do if you're the least bit competitive, and you're not afraid of tightening your own belt? Why, you offer your product at the same price or (GASP!) cheaper! Holy Capitalism That Works, Batman!! And we didn't even have to go John Galt!

Not yet (1)

RexDevious (321791) | more than 5 years ago | (#27822105)

If you truly cynical, you'd realize that companies price things as high as they can regardless. The only "pass the cost onto consumers" factors are ones where companies think they can use it as an excuse. But saying, "We're in two wars in the Middle East so of course gas cost more!" is a hell of a lot easier to pitch than "The government won't let us blatantly abuse the tax code anymore!" (though, it's fun watching them try).

Re:Am I cynical? (5, Informative)

Todd Knarr (15451) | more than 5 years ago | (#27822111)

They'll try. They'll be faced with the other side of the equation, though: as prices go up, demand drops. So they'll have to decide how much they can afford to lose in sales.

To me it only seems fair. As a private citizen I don't get out of paying taxes just because my income was outside the US. I have to file and pay taxes on that income, the only thing I get is a credit against US taxes due for the amount of taxes I paid on that income in that foreign country. The corporations are mad because they had a sweet deal going: don't pay US taxes on foreign income, and make a deal to avoid paying foreign taxes on that same income because they're a US company bringing all those jobs to the foreign country. And now Obama's looking to ruin their nice little sweetheart deal.

Re:Am I cynical? (1)

caywen (942955) | more than 5 years ago | (#27822129)

Not right now, probably. I'd imagine with the recent belt tightening across the country, businesses have a relatively high inventory that they are getting more and more desparate to unload. More likely, they will choose to cut workforce to compensate.

Re:Am I cynical? (1)

ksheff (2406) | more than 5 years ago | (#27822137)

I'm sure there are other ways for the companies to try to get around paying. The most drastic of course would be to move out of the US. IIRC, Microsoft threatened to move to British Columbia a few years ago over something like this.

If the Feds simplified the tax code, it would be easier to comply and enforce. If it was reduced, the companies wouldn't have to do stupid things like this as one of the ways to remain competitive. At $21B/year, this isn't a lot compared to the rest of the budget. If it was actually collected, Congress would probably squander it on more stupid shit....Medicare/Medicaid wastes more on fraudulent claims.

You mean they'll actually have to pay.... (4, Insightful)

Anonymous Coward | more than 5 years ago | (#27821807)

For the infrastructure they use, for the costs they incur upon citizenry, for the government support they receive regularly, and the bailouts they get surprisingly often?

About. Fucking. Time.

The common citizen pays far too much of the tax burden, while the corporate "citizen" reaps too many of the benefits. The more they weasel out of, the more we, the people, have to pay.

Does Anybody Actually Believe... (-1, Troll)

Nom du Keyboard (633989) | more than 5 years ago | (#27821817)

Does anybody actually believe that Obama wants this money for anything other than even more bloated government spending? Rather than reducing the deficit it will be, "Gee Wow! Now we've got even MORE money to spend!"

Talk about what Microsoft and Obama have in common is a bloatware future for the rest of us.

Let's raise taxes when companies are struggling! (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#27821819)

What better way to destroy jobs in the US than to give overseas competitors a big advantage.

Friggin idiot. And all the people who voted for him.

A revenue neutral version of this would get rid of layers of accountants and lawyers, and allow small companies to compete with large ones. However, given who pays for all the parties in DC, that would never happen before the heat death of the Universe.

corporate taxes (0)

Anonymous Coward | more than 5 years ago | (#27821835)

Corporate taxes are a stupid idea anyway. The money has to leave the corporation somehow.

Pay the money to employees --> Income Tax
Pay the money to stock holders --> Corporate Tax + Income Tax
Invest the money --> No tax (though arguably capital gains if investing the money increases the value of the stock, and then capital gains tax isn't paid until individual investors realize the gains by selling their stock)

The money shouldn't be taxed until it leaves the company in the form of employee wages or dividends. And then, it should be subject to plain old income tax.

Battle Lines? (3, Insightful)

WillAffleckUW (858324) | more than 5 years ago | (#27821837)

The stock market went up today.

This should really be viewed as a Return To Normality, or the removal of the corrupt tax avoidance schemes that the Talibangelists put in place.

To have a battle, you need to be fighting. The media just want to sell ads.

Re:Battle Lines? (0)

Anonymous Coward | more than 5 years ago | (#27822047)

The media just want to sell ads.

Hence the term "media whores"?

The US Military (0)

Anonymous Coward | more than 5 years ago | (#27821841)

is the largest protection outfit in the world. If these fsckin' companies don't pay their dues, they don't get protected, you know what I mean.

Go Obama (5, Insightful)

je ne sais quoi (987177) | more than 5 years ago | (#27821861)

For starters, maybe if corporations started paying their taxes, we could take down the debt some, or maybe we could lower taxes on the rest of us. I don't feel bad for the corporations, maybe they'll just have to forgo paying their executives their excessively huge salaries.

Also, every time Obama does something wrong, we see a bunch of people making sarcastic comments here on how Obama represents "change we can believe in". I do not agree with everything he has done, but I do like to see this sort of thing, he seems like he is honestly trying to run the government in a fiscally responsible way. That's a big difference from our previous president who refused to cut spending to pay for his tax cuts, and even refused to allow the cost of his several hundred billion dollar unnecessary war to be included in the normal budget. We're all paying for that kind of "limited government" now, as will be our children and grandchildren.

Re:Go Obama (1, Insightful)

NathanE (3144) | more than 5 years ago | (#27822041)

Fiscally responsible? Seriously? He received a raw deal budget wise from Bush, but his own proposed budget for 2010 is $1.178 TRILLION (source: http://www.whitehouse.gov/omb/asset.aspx?AssetId=764 [whitehouse.gov] ). Indeed he's projecting less of a deficit than 2009's budget. Hooray!! But this kind of proposed spending is hardly fiscally responsible.

Re:Go Obama (1, Informative)

Anonymous Coward | more than 5 years ago | (#27822083)

he seems like he is honestly trying to run the government in a fiscally responsible way.

From this article: http://news.bbc.co.uk/2/hi/business/7910335.stm

"He has predicted the budget deficit for the current year will be $1.75tn, which is 12.3% of annual output and the biggest since World War II. "

BOHICA! (2, Insightful)

Bodhammer (559311) | more than 5 years ago | (#27821865)

This is the major problem with the political system. The people voted for change - news flash here, there won't be any change except what is left in your pocket. The machine must be fed. The US tax code is so bloated and filled with special interest deals that unless government shrinks, TAXES WILL GO UP! This is a Demopublican problem. There is no differences between the parties - and they are partying on your money.

If you push on the balloon it will expand somewhere else.

Buckle in, this is not going to change unless all the bastards are thrown out, ALL OF THEM!

Time to invade the Cayman Islands (1)

thewils (463314) | more than 5 years ago | (#27821869)

Then they'll need a defense budget as large as the USA and maybe have to increase taxes just to pay for it.

And of course we can expect the legislation to.... (5, Insightful)

Whatsisname (891214) | more than 5 years ago | (#27821877)

And of course we can expect this to work flawlessly, and won't make businesses avoid the US, just like other great laws such as SOX.

How about lowering taxes and making the tax code simpler, so theres not all these loopholes and thus no reason to have the offshort accounts.

Complicated tax codes create the loopholes that allow this to happen, and this legislation will only make more of them.

Re:And of course we can expect the legislation to. (4, Insightful)

saihung (19097) | more than 5 years ago | (#27822117)

The race to lower taxes is a race straight to the bottom. Businesses will continue to use tax havens as long as there is any benefit to doing so, and the simple fact is that a big economy like the USA cannot afford to lower tax rates to what a little place like the Cayman Islands can charge, e.g. basically nothing.

A better solution is to change conflict laws to ignore the formal jurisdiction of incorporation and instead use the primary place of business. Want to be a Cayman corporation? Then move your ass to the Cayman Islands, along with your entire family. Otherwise, you will be taxed based on where your company really is headquartered. This is something that the major economies of the world can cooperate to make happen, and we don't have to drop our taxes into the toilet to do it.

Um, but they're Multinationals. (0)

Anonymous Coward | more than 5 years ago | (#27821881)

They just stop being US-based, or sell their international holdings. Now instead of a US company doing business in Tokyo and not paying much US taxes, it becomes a Japanese company doing business in Tokyo and paying 0 US taxes.

How is this an improvement?

Re:Um, but they're Multinationals. (1)

trampel (464001) | more than 5 years ago | (#27822021)

I would think that most countries that companies do substantial business in have roughly comparable taxation laws.

At least, I haven't heard Japan being referred to as a tax haven.

Re:Um, but they're Multinationals. (0)

Anonymous Coward | more than 5 years ago | (#27822079)

This has nothing to do with the taxes that companies pay for doing business in the country they are doing business in. A company doing business in Japan pays taxes in Japan. Obama wants to add on some extra taxes if that company happens to be registered in America.

Pathetic (1)

tsotha (720379) | more than 5 years ago | (#27821897)

It's like this guy was born yesterday. International corporations are never going to pay much in the way of income taxes in high-tax jurisdictions because they can control where profit is realized. He can't affect that with just changes to the tax code - that would take a wholesale rewrite of international treaties and business law. A rewrite which would be followed promptly by the biggest trade war the world has ever seen. I would be my last dollar gross tax receipts from corporations don't go up one penny as the result of changes Obama is planning.

Re:Pathetic (0, Flamebait)

pwfffff (1517213) | more than 5 years ago | (#27822045)

Wow, you're right; he probably didn't realize that. You should call him up right now and let him know. I mean, you have his number, right? Don't they give that out to all the super-geniuses of the world so they can lend their bountiful intelligence to him in times of need?

No?

Shut up.

Re:Pathetic (2, Insightful)

saihung (19097) | more than 5 years ago | (#27822153)

I think you're wrong about that trade law, mostly because the tax havens don't have any actual trade to use as a threat. Switzerland, Cayman Islands, Isle of Man, Jersey, Ireland, Luxembourg - these are the little countries that are holding the tax policies of the rest of the world hostage. Trade war? What trade war?

The Netherlands tax haven?? (3, Informative)

MrMr (219533) | more than 5 years ago | (#27821923)

What are they talking about?
We pay over 30% corporate tax. [wikipedia.org] and compulsory health insurance for our personnel.

Re:The Netherlands tax haven?? (1)

dahip (1460853) | more than 5 years ago | (#27822141)

The Netherlands in fact is a tax haven for holdings and such. Much like Ireland. The whole taxing thing is a big race to the bottom between countries. It's a good thing Obama tries to put an end to this, the US is big enough to be able to force this upon companies. Hell, they even force it upon the Swiss.

buffalo springfield (1)

overcaffein8d (1101951) | more than 5 years ago | (#27821937)

...nobody's right if everybody's wrong

^obligatory buffalo springfield (for what it's worth) reference

why not just a national tax? (1)

metotalk (168817) | more than 5 years ago | (#27821939)

why not just have a national tax like the UK has? you pay a tax for every thing you buy and you then have non of this IRS tax evasion, because you have to buy things, so you then pay your taxes that way. Hell most states and cities get there money only from sales and property taxes. (yes some states have incomes tax but I am not in one so...)

Postal building? (1)

Terwin (412356) | more than 5 years ago | (#27821947)

Might this be the main post office with perhaps about 20,000 PO boxes?

Also, if there were a company that stopped all the junk mail and forwarded all of the legit mail, I might put them down as my address too.

Or, more seriously, if the location of the actual HQ of those companies did not have such high taxes, then it would probably not be worth the effort of setting up that dummy HQ.

That is one of the reasons both Regan and Bush were able to both cut taxes and increase tax revenue at the same time.
If you reduce the incentive to avoid taxes, fewer people will go through the efforts of doing so.
(Obviously cutting taxes will not always increase revenue, but the 'sweet spot' of maximum tax revenue does seem to be somewhat lower than the current tax rate, at least in the US)

Damn! America is no more a do good nation! (1)

binaryartist (1172973) | more than 5 years ago | (#27821973)

Till now, poorer countries were thriving because of American way of outsourcing I guess now few thousands may thrive in Buffalo N.Y as opposed to millions in Bangalore, India

Re:Damn! America is no more a do good nation! (1)

Cro Magnon (467622) | more than 5 years ago | (#27822081)

But if we kept on outsourcing like we have been, Buffalo NY would become Bangalore India.

Lowering taxes won't really help (0)

Anonymous Coward | more than 5 years ago | (#27821987)

Offshoring won't go away even if you lower taxes to 0.
There are other reasons for offshoring companies that may be just as important as the dollars saved on taxes, such as laws regarding bookkeeping, how dividends are payed, what is illegal or not etc. etc.

Delaware anyone? (0)

Anonymous Coward | more than 5 years ago | (#27821999)

Why look so far, Delaware is right around the corner... The biggest tax (evasion) haven in the world. Wyoming, Nevada, Alaska... But I guess pointing fingers at others is easier, and more profitable. Hypocrite.

Easy solution for multinationals: move HQ (3, Insightful)

GlobalEcho (26240) | more than 5 years ago | (#27822003)

Most of those Bermuda/Cayman holding companies exist not to avoid taxes entirely, but rather to keep the US from double-taxing profits that have already been taxed once by Europe/Asia, which is what the US does when this offshore trick isn't used.

It seems likely to me that if US companies can't do that any longer, many will cease to be US companies. It's not that hard to move HQ to Ireland or Canada or wherever. Then the US can become a nation of grunt workers while the real power and intellect (and taxable personal income) is abroad.

Pathetic (1)

Arthur B. (806360) | more than 5 years ago | (#27822067)

Pathetic. There's going to be no reason left in the world to incorporate in the US.

Oh yeah, the Strenght of the American Worker, of course.

Won't the companies just move? (3, Insightful)

john_anderson_ii (786633) | more than 5 years ago | (#27822069)

With the "free" (read "internationally managed") trade agreements we have with foreign nations, I don't think "fixing" these "loopholes" will have the effect this administration desires. "Fixing" these "loopholes" and thus increasing the over all tax burden of a corporation may have quite the opposite effect.

If it becomes more lucrative and less of a tax burden to be a foreign business inside one of these countries with managed trade agreements instead of a domestic one, what will happen? The business will move because tariffs and import taxes become cheaper than domestic ones. That means unemployment grows and tax revenues drop.

This administration would be well served to tread lightly, and ensure that conducting business withing the U.S. is cheaper than foreign alternatives, else the U.S. may find itself with very little businesses conducting any business at all.

Just another symptom (1)

kheldan (1460303) | more than 5 years ago | (#27822089)

I think we all know that the economy is going to get worse before it gets better, and I think that this and other unpleasant things we're inevitably going to hear about are just the outward symptoms of precisely that. We've got a system that doesn't work anymore and I don't think you can fix it without doing some things differently. Whether or not this is going to do any long-term good or not is more a matter for future historians than anyone else; we KNOW there are going to be at least as many mistakes made while trying to clean up this mess we've made for ourselves as there are going to be smart insightful decisions. So, complain away, if that's what you feel like doing: get it all out of your system instead of letting it build up, your health will be better overall. ;-)

Before looking abroad, check Delaware, Nevada, ... (2, Insightful)

Anonymous Coward | more than 5 years ago | (#27822155)

These States function exactly as tax heavens not only for foreign companies...

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