GAO Reports Bailout and Tech Firms Love Tax Havens

theodp writes "Most of America's largest publicly traded corporations and Federal contractors — including those receiving billions of dollars from US taxpayers to finance their recovery — have set up offshore operations that could help them avoid paying US taxes, according to a GAO study released yesterday. Of the 100 largest public companies, 83 do business in tax-haven hot-spots like the Cayman Islands, Bermuda, and the British Virgin Islands. The report found that Citigroup, a recipient of $45B in bailout funds so far, has set up 427 subsidiaries in tax-haven countries, including 91 in Luxembourg, 90 in the Cayman Islands, and 35 in the British Virgin Islands. Household names on the lists from the tech sector include Apple (1 tax haven subsidiary), Cisco (38), Dell (29), HP (14), Intel (6), IBM (10), Microsoft (8), Motorola (4), and Oracle (77)."

Re:fp

[Anonymous Coward]

I didn't even read your comment!

Re:fp

[Lord Bitman]

dude, when you do... the coincidence is gonna blow your mind!

Re:fp

[rtfa-troll]

Well if you had both read the fine article before it was overloaded and had to be changed, you would have find that it had a perfect system for getting rich whilst meeting beautiful girls (or boys or non-determined goth types, depending on your taste) which unfortunately I can follow but can't explain. So don't make this mistake next time.

Re:Tax policy

[Nimey]

Wrong. The solution is mass genocide, so that the United States is just as sparsely populated as Luxembourg and our taxes go down to similar levels.

Vote Genocide in 2010!

Not to worry

[OpenSourced]

It's all part of the NewParadigm (TM). The NewParadigm ends with the old-fashioned way of taking money in form of taxes and using it to provide services to the people. The NewParadigm reduces the input of taxes, and makes up the difference by issuing debt, that is in turn bought by the Chinese, that for some cultural superstition of them, like to work hard, sell merchandise, and lend back all the received money to the buyers, to allow them to buy still more stuff.

In the NewParadigm is not wrong for corporations to use tax law loopholes to evade taxes, and even receive bailout money afterwards, because the bailout money is just more debt, and debt is good. The NewParadigm states that the bigger the debt of a country, so much the better, because the debtors will be scared of forcing a default, and will keep on buying debt forever. So now, besides having companies too big to fail, we have countries too big to fail. In the NewParadigm, once you have a company deemed too big to fail, you can stop working, because the government will pay all your costs, as by definition they cannot allow you to fail. If you manage to have a country too big to fail, you also can stop working, and finance yourself just by selling bonds.

The reason because the NewParadigm works is because the world increase of productivity has generated a net production surplus. With the old paradigm, there was no way to use that surplus. If you stopped working to reduce the surplus, you stopped having money, and so you died, or got sick or something, and usually returned to work, very likely coughing. If you kept on working, the surplus just got bigger, and was from time to time wiped out by crisis and wars. However, the increase in production lately has made those two methods rather inadequate anymore. The NewParadigm, however, offers a way out of the dilemma. You can now stop working (or pretending to work in non-productive jobs like marketing or politics or the military) and keep on living well just by adding to your VISA debt balance. A whole country can do that by adding the VISA debt balances of the population and putting them into bonds, and selling the to the Chinese. In that way the surplus is eliminated and global prosperity ensues.

Those that will like to point out the current crisis as a negation of the principles of the NewParadigm should be ashamed of themselves, as the current crisis is obviously produced by _failure_ to fully apply the NewParadigm principles. Some old fashioned thinkers, worried by old fashioned guilt thoughts about getting something from nothing, got cold feet and stopped issuing more debt. But now the good work has been taken up by the governments, and all the VISA debt will be backed up by bonds, that the Chinese will promptly buy. So please don't criticize these companies, they are the backbone of the next step in economical evolution, and you are old fashioned thinkers, probably full of shit too.

Re:The collection of taxes is not theft!

[plnix0]

You've stated one of the more popular fallacies in support of government theft. The most obvious (and complete) response is that I did not freely contract and agree to pay such a fee in return for such services, therefore noone can morally extract the tax from me. In addition, in practice, governments always use the majority of their revenue in ways which a large percentage of the taxpayers do not support and which many taxpayers are even morally opposed to. Even if it were right to collect fees for actual services used such as roads in the absence of an explicit agreement/contract, there is clearly no justification for taking money from a person in order to fund activities with which he disagrees.

Another argument is that your case is its own downfall. Your argument assumes that people want services like police, fire department, courts, and roads. In general, I agree that these are useful services which most people desire. However, as even a rudimentary introduction to economics will teach you, when the demand for a product is high, someone is likely to produce the product on a free market. Your argument makes the leap from "these services are useful and desireable" to "a single entity should use violence to enforce its own monopoly in the production of these services". Like any other product, in the absence of violent and/or fraudulent monopolies such as government, the market will produce a far superior system of courts, police, fire protection, etc., than any government could accomplish.