GAO Reports Bailout and Tech Firms Love Tax Havens 347
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:It's a TARP! (Score:5, Informative)
Re:US Corp. Tax Load VS Other Countries is... (Score:1, Informative)
2nd highest in the industrialized world behind only Japan, as I recall the most recent article.
It's a commonly cited statistic, but it's very misleading. The US has high base tax rates but also has more generous deductions and credits than most places. The effective corporate tax rate (in the low 20% range) is about middle of the road among developed countries.
It also doesn't have anything to do with the issue of tax havens -- it's not that companies are actually moving their operations to the Cayman Islands (etc), its that they structure themselves in ways that let them legally pretend that's where their income happened. Unless you got rid of taxes entirely there would always be countries that allow themselves to be used in such a way. It makes more sense to craft regulations to prevent these sorts of bookkeeping games, especially among companies that are on the dole.
California has the highest or 2nd highest corp. (and other) taxes.
[citation need] Taxes here in CA are fairly high compared to the rest of the country, but our corporate taxes rank about 10th last I heard.
Re:Yes. (Score:5, Informative)
So, in other words, you didn't actually read the report. Just skimmed through, and then immediately jumped on Slashdot to slap someone down. From said report:
Re:Legal and understandable - (Score:4, Informative)
For some of those other countries, the "local office" requirement was made at the behest of their banks, because they were scared that they'd lose the business of some of these companies when other countries introduced restrictions on the use of tax havens.
You'll notice that for many of these companies that supposedly do do business in those countries, the only address you'll find for them in the country will be, curiously enough, also the address for their lawyers in that country, or their accountants, and they'll only have one employee, who is actually "on part time secondment", curiously enough, from said lawyer or accountancy.
Re:Yes. (Score:5, Informative)
Nothing in this report says the companies do no business in the "tax haven" countries. Apple originally set up in Ireland to make Powerbooks, as I recall. They don't do manufacturing there any more but it's still their European headquarters.
LoL
Ireland has veeeeery friendly tax laws and is a prime example of a Country where individuals and corporations send money to dodge US taxes. Part of the reason so many individuals and businesses setup their tax shelters in Ireland is specifically because Ireland does not have the public perception of being a tax haven.
The only reason Ireland (as a member of the EU) can do this is because EU law only prevents countries that meet the 'EU economic norm' from playing such games with tax law. Once Ireland develops, those convenient tax laws will have to be changed.
republicans tag (Score:3, Informative)
I see the "republicans" tag on this story and am having a hard time making the connection. If I remember right, a large number of republican members of congress didn't like the idea of the bailout and continue to speak against the release of the second half of the money. We need a tag called "bipartisans." I think part of Obama's appeal to monied interests is "All this partisan bickering is getting in the way of what we can really do for this country: get paid."
Re:Tax policy (Score:2, Informative)
Maybe you are kidding yourself? Data from the IRS [taxfoundation.org] say that in 2006, the top 1% contributed 40% of the tax income and the top 5% paid 60%.
Which explains why they want to go somewhere else.
Ireland's popular if you do EU business (Score:3, Informative)
Ireland's taxes are lower than most of the rest of the EU, so it makes sense for any company doing pan-EU business to be based there. It also has had a number of years where it was a cheap place to get labor, and had workers that were educated and spoke English, though there's recently been a lot of business moving to Eastern Europe, especially Poland, where the labor's cheaper.
Re:Oh please, torture? (Score:5, Informative)
You know, the torture going on isn't just waterboarding, humiliation, koran desecration, human pyramids, being threatened with dogs, or "not getting the right jail." It includes what acts that are unarguably torture, including being beaten and chained up until dead (http://en.wikipedia.org/wiki/Dilawar_(torture_victim)). Even when the sadistic bastards believed the detainee was innocent.
Some other examples of "not really torture" (http://en.wikipedia.org/wiki/Abu_Ghraib_torture_and_prisoner_abuse):
* Urinating on detainees
* Jumping on detainee's leg (a limb already wounded by gunfire) with such force that it could not thereafter heal properly
* Continuing by pounding detainee's wounded leg with collapsible metal baton
* Pouring phosphoric acid on detainees
* Sodomization of detainees with a baton
* Tying ropes to the detainees' legs or penises and dragging them across the floor.
And some other forms of torture, with real torture names that can really kill you, like strappado (http://en.wikipedia.org/wiki/Manadel_al-Jamadi). Although folks like you, Rush Limbaugh and all the other right wing nuts seem to prefer the doublespeak term "stress positions."
And I guess because some soldiers were just so stressed out and needed to blow off steam, some prisoners were just tied up, put in sleeping bags and beaten to death (http://www.washingtonpost.com/wp-dyn/content/article/2005/08/02/AR2005080201941.html).
But you're right, waterboarding isn't torture and it was only 4 guilty as hell terrorists anyway.
Re:Hell yes I can blame them. (Score:4, Informative)
Re:Yes. (Score:2, Informative)
Companies that need credit to cover payroll would have been in trouble before the credit crunch anyway, as this is usually a last ditch effort to save a company.
That is crap. Companies who charge money for services, and have VERY tight profit margins, can sometimes be fucked over on cash flow if their deadbeat customers do not pay on time. They need to be able to pull money from the credit line for payroll if they do not have enough money when payday rolls around. The credit line is replenished once the (late) money from clients arrives.
I'm a student.
Ahhh I understand now.
Re:Corp Tax take shrinking (Score:3, Informative)
You're confusing the tax rate with the tax take, two very different numbers.
Re:Corporate, torture apologists (Score:3, Informative)
Err, have you checked out the regular duties in the United States? Check out the duty for toys made in China, for example. Also, have you heard of NAFTA? The main reason there aren't Free Trade Zones in wealthy western countries is that we don't have those ruinous tarriffs and trade barriers in the first place. Though of course there are exceptions.
Re:Hell yes I can blame them. (Score:3, Informative)
No they aren't. First, every penny of the TARP funds is either new money or debt. Not a single penny of taxpayer funds have been given. Second, there is no point in putting cash in a tax haven. You don't get taxed on having money. If the government sticks a billion dollars in your bank account, you won't pay a cent in taxes on that billion dollars even if you let it sit there forever.
Oh and guess what? A number of the banks who received TARP money didn't want it but the US Treasury forced them to sell a portion of their operations to the treasury and accept money. Why? Because otherwise everybody would look at the banks that did get money from the treasury and they'd immediately take their business elsewhere since those are the banks on life support. Look at Wellsfargo and Citigroup, they both got TARP money. But one of them was willing to pay out of their own pocket to purchase Wachovia and the other wanted the government to pay them to take on Wachovia.
Anyway, the point is, before you go start accusing people of taking money from the public coffers you should make sure that you know who actually wanted money and who was forced to take it.
The only way to "fix" the US economy is for people to work at whatever they are good at and build value. Then exchange that value for goods from other people who are working. But people sitting on their asses bitching that they don't have jobs and that the government needs to do something won't fucking help. They need to get their own butts in gear and make something fucking happen.
All this government shit is doing is trying to push things back to some semblance of the status quo. The best thing that could be done for the economy is to let banks fail, let people lose their homes, and let people be productive and those who can't be productive need to learn to be.
Re:Hell yes I can blame them. (Score:3, Informative)
You know, if you knew anything about the bailouts you might not be so fed up. So far nobody has been given free money. AIG got loans at a very substantial interest rate. The banks sold portions of their companies to the US Treasury, some of them involuntarily.
If you had any connection with facts, your post would be a lot more compelling.
Re:Tax policy (Score:5, Informative)
No. Really you don't. Tax brackets don't work like that. The fact that you don't even understand how taxes work, makes me believe that you've never paid taxes in your life. So why would we take tax advice from someone who doesn't understand the current system, and probably doesn't even pay taxes?
You only pay the tax rate in a bracket for the money that actually falls in that bracket. In your example you'd pay 15% of the amount up to $32,500, then 25% on the $520 between $32,500 and $33,020. So the person's take home would actually go up $7.50/week to $538.75.
Re:Tax policy (Score:4, Informative)
Luxembourg population density: 186/km2
Unites States population density: 31/km2
So you'd need to increase the US population 6x to be "just as sparsely populated as Luxembourg", so unless that mass genocide is being done in Luxembourg it isn't going to help...