Taxes are for the little people Archives

October 23, 2010

Taxes are for the little people

Don't imagine that the only profit arbitrage open to our vigorous multinational shapeshifters is built out of forex-manipulated wage and input costs. Check out this tax arbitrage:

"Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. Google’s income shifting [reduced] its overseas tax rate to 2.4 percent... [Google] operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent. The U.S. corporate income-tax rate is 35 percent. In the U.K., Google’s second-biggest market by revenue, it’s 28 percent.

Google, the owner of the world’s most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax.

.... Such income shifting costs the U.S. government as much as $60 billion in annual revenue."

Google's reward?
"Google’s transfer pricing contributed to international tax benefits that boosted its earnings by 26 percent last year, company filings show... Based on a rough analysis, if the company paid taxes at the 35 percent rate on all its earnings, its share price might be reduced by about $100 [currently ~ $600 -- OP]"
On this very loophole mechanism, hopers got a promise from Barry O:
"... the Obama administration proposed measures to curb shifting profits offshore, part of a package intended to raise $12 billion a year over the coming decade. While the key proposals largely haven’t advanced in Congress, the IRS said in April it would devote additional agents and lawyers to focus on five large transfer pricing arrangements."
Note part II, there: the IRS could hammer these outfits if unleashed by the White House, but Baby Bush's gang saw to it that "Google received approval from the IRS in 2006 for its transfer pricing arrangement. The IRS gave its consent in a secret pact known as an advanced pricing agreement."

Time Ohbummer's IRS revokes that secret deal, eh?

Read the link. It's lovely. And as with most beauty and other devil's work, it's all in the details.

I saved this bit as an after-dinner mint:

While the administration “remains concerned” about potential abuses, officials decided “to defer consideration of how to reform those rules until they can be studied more broadly.”

April 15, 2011

Cuz I'm the tax man

Should limited liability corporations -- those ghostly contrivances of our Victorian legal system -- pay taxes on their "income"?

Of course they "should", but as suggested here, in many cases this question is moot. They don't pay any stinking taxes; in fact they often get unearned credits -- subsidies for what? Hell, I don't know. Prolly for just being so damn big and nasty.

But be that as it may -- if they are in fact non-persons why should they pay taxes? Many better ways to do this, of course -- that is, if you want Uncle to more effectively soak the rich and famous.

I wonder at the radicals that work themselves up into a deep-fryer state over the tax system's infernal class tilt. (I hear Oxy or Flug sayin' "what else had they expected?")

The record is clear: if you want to tax the elite -- really tax 'em -- you know, get money of theirs out of 'em, you gotta surprise 'em. Attack on an open flank. The only decent tax attack has to be predicated on one principle: it takes time for their spear bearers and retainers to come up with the right new spears. In the interval you can milk 'em... some.

But I say leave this to the pwog wonks and extortion shysters that love this war by green eyeshade. For us warm-blooded red-hots, I say forget about it. Don't be like this class-piety equity geek writing in Dissent:

I Just Paid More Taxes Than Most of Corporate America

If recent trends in business taxation hold, when I finally get around to writing the check and putting my tax return in the mail, I’ll be contributing more in federal income taxes than the bulk of all U.S. corporations.

Of course, that’s not saying much. It’s not hard to chip in more than zero dollars..."General Electric, the nation’s largest corporation, had a very good year in 2010.

"The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

"Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

Wrangles over raising Richie Rich's taxes are a dead end. If you wanna. do some spreadsheet martial arts, then just work up some numbers on cutting job-class taxes and the job-class nut of living costs -- like say the junk of mortages on house lots and the employee hunk of heath premiums and and ...

Hey, let me be perfctly clear on this: I love playing taxman class avenger maybe even more then most leftoids. After all, I'm a poli-econ-con who in my earlier tossed salad days studied -- in as much as I did study -- under the great and glorious wizard Wild Bill Vickrey.

Yes, indeed. In fact my very first blog entry, by time of actual composition, was on a wealth stealth tax. But please. It's sticky-fingered pipe dreaming and as we all know well, most job folks don't give a damn. They aren't that envious, not like us failed meriters are, anyway. Job class helots just want their own taxes reduced, and it oughta be only in that context that we talk about raising taxes on Nathan Arizona Detroit -- only as part of a massive shift of class burden worth trillions up and down.

About Taxes are for the little people

This page contains an archive of all entries posted to Stop Me Before I Vote Again in the Taxes are for the little people category. They are listed from oldest to newest.

suppressing democracy is the previous category.

Technical rationality is the next category.

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