SpongeBob and 'Transformers' Cost US Taxpayers $4 Billion, Study Says (nytimes.com) 143
An anonymous reader shares a report: Dismissed by critics and devoured by fans, "Transformers: Age of Extinction" was the top box office film in 2014, bringing in $1.1 billion, with more than three-quarters of those dollars coming from overseas. ViacomCBS's Paramount Pictures, which distributed the computer animated action-fest, saved much of that money by licensing the international rights through a complex strategy designed to avoid paying U.S. taxes, according to a study published on Tuesday by the Centre for Research on Multinational Corporations, a nonprofit group funded in part by the Dutch Ministry of Foreign Affairs.
It is common practice for multinational corporations to take advantage of tax shelters. The report offers a rare look at how one company has pulled it off. ViacomCBS, a media giant that came into being after the 2019 merger of the sibling companies, has used the same strategy for all its entertainment properties, according to the report. Since 2002, ViacomCBS and its predecessor companies Viacom and CBS together avoided paying $3.96 billion in U.S. corporate income tax through a system that involved subsidiaries in Barbados, the Bahamas, Luxembourg, the Netherlands and Britain, according to the report. Much of the $30 billion in non-U.S. royalty revenue brought in by the company's film and TV franchises, such as "SpongeBob," "Star Trek" and "Mission: Impossible," has not been subject to corporate taxes, the study determined.
It is common practice for multinational corporations to take advantage of tax shelters. The report offers a rare look at how one company has pulled it off. ViacomCBS, a media giant that came into being after the 2019 merger of the sibling companies, has used the same strategy for all its entertainment properties, according to the report. Since 2002, ViacomCBS and its predecessor companies Viacom and CBS together avoided paying $3.96 billion in U.S. corporate income tax through a system that involved subsidiaries in Barbados, the Bahamas, Luxembourg, the Netherlands and Britain, according to the report. Much of the $30 billion in non-U.S. royalty revenue brought in by the company's film and TV franchises, such as "SpongeBob," "Star Trek" and "Mission: Impossible," has not been subject to corporate taxes, the study determined.
It's normal (Score:3, Insightful)
"It is common practice for multinational corporations to take advantage of tax shelters. "
Politicians are too stupid or too corrupt to close all the loopholes.
Re:It's normal (Score:4, Insightful)
These corporations are just enjoying the profits from their purchases of public servants. Both politicians, bureaucrats and their extended families
all in the family business of diverting the Taxpayers money to themselves and their real employers(the corporations).
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Re:It's normal (Score:4, Interesting)
They're not corrupt. Once they're bought, they stay bought.
That is a good thing. Corruption works better when it is efficient and predictable.
In America, corruption is right out in the open. Politicians can be legally purchased. Competition for lobbyist money keeps prices low. If one political party won't do your bidding, the other will.
China also has an efficient system based on guanxi [wikipedia.org]. You pay, and the receiving bureaucrat or politician will bend over backward to help you.
An example of an inefficient system of corruption is India. When you pay a bribe, the recipient will stop blocking you and step aside but offer no additional help. So you still have to deal with the next official in the chain of approvals. So projects are delayed and killed by a thousand cuts. A generation ago, India's GDP was as high as China's. Today, it is a fifth as much. That isn't because of corruption, but because the corruption itself is corrupted.
Better tax system? (Score:2)
Normally vacuous FP, but at least not offensive. Can't you do better?
And the answer is "No, probably not within the constraints of 'capturing' the FP slot."
(I recently had another solution approach for FP, but I already seem to have forgotten it. I hope it was a poor idea...)
My take is that the government does have legitimate expenses and needs sufficient revenue to cover those expenses. But the tax system should not be a game rigged by the best bribers.
On that basis, I'd like to see a "principled" tax syst
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Simpler systems are less prone in general to being gamed, and lower rates are less an incentive to work to game a system. I think those are reasonable premises to lead off with.
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Basically concurrence, but every system will be gamed. Just give the gamesters a bit of time. Change is mandatory.
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10% Flat Tax on all individuals, corporations, and sales. Make $100,000 in income? Pay $10,000 in taxes. Make $100,000 selling a house (sales price - purchase price)? Pay $10,000 in taxes. Collect $100,000 in dividends? Pay $10,000 in taxes.
No deductions, No credits. No loopholes. 10%
Ummm, one exception If ALL of your employees, contractors, etc, make twice the minimum wage (indexed to inflation), then your tax rate is 5%.
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What do you think income is?
Rhetorical question. However you define it, they will game it.
However, I think the fundamental problem is the unfairness. Money is not really fungible, but economists like to pretend.
However, since you raise the issue of sales taxes, here's my idea: Three levels of sales tax. Essential stuff like food should be at the lowest rate. Recreational stuff like the movies (of this story) should be taxed at the highest rate. Investments like research or classes should be taxed at an inte
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I was going to argue that the loopholes are necessary for many industries but ultimately for intellectual property there is no reason to permit it for affiliated entities.
The complexity does come in when you have regulatory capture locally that results in meaningful costs, risks, or local value-add.
Re:It's [recreational, not essential] (Score:3)
Would it help to think of it in terms of "Who needs it?"
If you're taxing essential stuff like food, then you're making it harder to survive.
If you're taxing recreation like movies, then no one starves.
(If you're taxing investments like actual research (that creates important new IP), then you're just slowing down the changes.)
(Ekronomic perspective alert. (Ditto my earlier comment.))
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Then again - taking the post at face value - let's think about the logic of a film that "brought in $1.1 bn" (somehow) shorting "the taxpayers" $4bn.
Think about all the ways that's stupid.
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Then again - taking the post at face value - let's think about the logic of a film that "brought in $1.1 bn" (somehow) shorting "the taxpayers" $4bn.
If you read the entire summary, you will see that the "missing" $4B is on $30B in revenue.
Think about all the ways that's stupid.
Indeed.
Re:It's normal (Score:5, Informative)
Actual corporate tax planner here. It's not that simple.
To the extent "tax shelter" transactions remain available in the international context, it's mostly due to arbitrage between different tax jurisdictions. Country A's politicians may be plenty smart and not at all corrupt, but closing the loophole involves a zero sum fight with Country B, who may have their own (and even legitimate) policy reasons for leaving their laws in place as-is.
Additionally, the U.S. rules governing multinational transactions are mind-numbingly complex, even for professionals who specialize in international taxation. Part of the reason the rules are so complex is successive attempt to close loopholes, which results in exceptions, exceptions to the exceptions, and occasionally even exception to the exception to the exceptions written into the law.
Tax policy writers are constantly fighting a battle between attacking abusive planning with a broad brush that hits non-tax motivated transactions, and attempting more focused rules that increase complexity.
Re:It's normal (Score:5, Informative)
Actual international corporate tax planner here, with 38 years experience.
While I agree with most of what you say, the obvious tell in the original story is that ViacomCBS is using companies in Barbados, the Bahamas, and Luxembourg to shelter their profits. It's highly unlikely that anyone in those countries had anything to do with creating the IP, other than pushing paper. The only reason those countries would be involved is to avoid taxes.
And while the Netherlands and the UK do have economies based upon more than shell companies and tourism, their tax laws are also very useful in hiding profits from any tax man anywhere in the world.
Even if the current proposals before the OECD to create a minimum global corporate tax rate isn't going to help much here, since even if that is agreed it will be decades before places like the Bahamas adopt it.
In my mind, the best answer would be to take the combined income of the worldwide corporate group, and apportion it between the countries where it operates based upon economic activity such as the percent of sales in each country. That's the way US corporate groups divide up their tax income for state income tax purposes, and that system is simpler and much less subject to abuse. Unfortunately, putting that type of system in place would take agreement between all the economically significant countries in the world, something that is very unlikely to happen.
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Of course the tax haven countries didn't have anything to do with the creation of the IP. But my point is that the fact that profits are at one point run through those countries says nothing about whether any tax was actually avoided.
I use quite a few tax haven countries in my tax planning, but they don't result in any tax savings. In fact, they have sometimes imposed additional tax cost. My company's business requires hard assets on the ground and utilizes very little intellectual property, so profits can'
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I am no tax planner, but I easily see why trying to close loopholes is an endless source of complexity. And it is doing a lot of harm to the society as a whole, to try to fight against the harm tax evaders do. So tax evaders cause a net loss for the society that is way beyond the money they hide.
I wish laws could be more generic, and express precise ideas of what fair taxation means, yet leave details to the judges. That way, any creative tax evasion a company thinks about would be a huge liability as the
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An international business already pays taxes on every country it does business with. Who even said that the US ethically deserves those taxes? It doesn't. Closing loopholes is an euphemism to tax foreign economic activities just because politicians love to get more money. That paper is just propaganda to make a global tax authority.
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An international business already pays taxes on every country it does business with. Who even said that the US ethically deserves those taxes? It doesn't. Closing loopholes is an euphemism to tax foreign economic activities just because politicians love to get more money. That paper is just propaganda to make a global tax authority.
The issue isn't with businesses paying "normal" taxes... Let's take one example. Let's say we have an international coffee house chain, CoffeeStar Inc. They are somewhat successful in the US, and has a revenue of $10 billion and a profit of $1billion. They pay 25% corporate tax for a total of $250 million tax.
They open an international subsidiary in Norway. $1 billion revenue, $100 million tax rate. That's $22 million tax. The money is sent back to the US mother corp, which I think will then pay $3 mil
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Not to mention most are just in it for the short term.
The Politician who brings in the big event, into their community gets popular fast, as it often requires an expensive infrastructure, to be built and supported by dreams of making you small town or city the Next Hollywood/Silicon Valley/Detroit... Where this event is just the starting point for some future growth. However most of the time these are short lived events, where by the time the popularity ended, the politician has been voted into a higher p
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"It is common practice for multinational corporations to take advantage of tax shelters. "
Politicians are too stupid or too corrupt to close all the loopholes.
It's just too hard, even for countries without the level of corruption you have in the US... Every country is part of the international community, and unilateral measures can result in massive repercussions. Sometimes it's just hard... if a media company profits from ads in France, there is tax. But what about Facebook, which targets French users with ads from French companies but can just move their servers abroad?
There are not only loopholes through IP and using that to move profits, but there is al
It's all relative (Score:4, Funny)
$4B in lost taxes! I guess I can't complain anymore when Transformers only cost me 2 hours of my life.
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Hollywood Accounting (Score:5, Informative)
Many Hollywood movies, including blockbusters that pull in hundreds of millions at the box office, actually "lose" money due to the shady accounting practices used by the studios. Anyone (actors, screenwriters, etc.) accepting net points from a studio should have their heads examined.
https://en.wikipedia.org/wiki/... [wikipedia.org]
How about (Score:2)
The lawyers and accountants who cook up these methods be held to account in some way?
It save on having to gin up new laws when they do this and then look around and whine "I was looking out for my clients"
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No contradiction at all.
Just because you/they can doesn't mean you/they should.
Tax policy needs international cooperation (Score:3)
The disconnect between national governments and international businesses creates opportunity for these kinds of shenanigans. One "solution" would be to dictate that businesses are no longer allowed to buy or sell across national borders, but that would be pretty awful.
The better solution is not easy, but it is achievable: international tax treaties that ensure some minimum tax is paid no matter where profits are realized. This can reduce or even eliminate the incentives to play shell games with transfer pricing.
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The better solution is not easy, but it is achievable: international tax treaties that ensure some minimum tax is paid no matter where profits are realized
We have trouble making that kind of agreement between the 50 states, how are we going to make it happen between 207 different countries?
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You only really need to do it between maybe 10-20 countries plus the EU. Non-participating countries become unrecognized entities and you double-tax the profits (or gross income) in those countries and distribute it to the member countries.
As for the 50 US states, the rules are pretty transparent and you rarely hit double taxation aside from cases where you live in one state and commute to another for work which is pretty fair in my book.
Maybe Reduce and Simplify the Tax Code (Score:4, Interesting)
This is why imports MUST be taxed (Score:3, Interesting)
The fix for the multinational loop hole is simple.
Go back to principally funding government through tariffs on imported goods - INCLUDING - intellectual property and labor! Reduce the income tax rate to 0% for all but the top brackets.
Then CBS could play whatever games it wants transfer the movie to your over seas sub so it can sell license to US persons - fine but the buyers of those license will pay import duties on your license fee.
Out source something like software development or your support staff - no problem but you owe dear old uncle Sam an account of how many hours of labor you 'imported' supporting your US based revenue at years end and you will pay import duty on whatever the mark-to-market value of that labor is in OUR market.
This would protect US jobs; address the trade deficit; and effectively close off soooo many of these tax avoidance issues.
Re:This is why imports MUST be taxed (Score:4, Interesting)
Most economists would suggest that would result in a massive recession. It would be equivalent to taking a nuclear bomb to supply chains spanning the globe, that could not be rebuild in any sort of reasonable time frame. There are very good reasons the world has mostly abandoned tariffs as revenue raisers. They are extremely inefficient taxes from an economic perspective because they inhibit trade, which is key for an economy working at maximum efficiency.
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What they should do is create an international corporate income tax framework standardizing taxes and minimizing or eliminating shelters, e.g. by setting a minimum income tax rate and requiring IP licensing and rights transfers be included, and Then use Tariffs as a default which apply to any countries Until they sign and implement the framework after a certain date... as in a "stick" for any countries think about refusing to sign onto that framework. The extra tariffs and recession would be avoi
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The OECD is actually working on precisely such a framework (absent the tariff enforcement piece). But the logistics of such an enterprise is staggeringly complex. It's hard enough for just the U.S. to get consensus on tax policy. Trying to get the whole world to agree is an enormous undertaking.
Gross oversimplification (Score:2)
This is why I hate politicians. They like to portray complex systems as simple. They are that boss that always listens to the marketing twaddle.
What you propose is not as simple as you make out because it would basically destroy every trade treaty the US has ever signed. The US export market would then promptly keel over from shock, especially perishables like farming, and it would finally finish off steel, sending the trade deficit soaring and killing US jobs. It would probably also trigger a worldwide re
Rebrand it (Score:2)
Really, why are people supposed to get upset at corporations avoiding taxes when the tax laws are set up to allow corporations to avoid taxes? If they couldn't avoid responsibility for things then there wouldn't be any corporations in the first place. It's what they do. If you want to change the tax la
Politicians write the tax laws (Score:2)
K.I.S.S. tax algorithm (Score:3)
If a business ships money out of the US, tax it. The existing system tries to guess the purpose of the removal, which is a lost cause because it's going into an international rat maze. It's simpler to simply tax any cash going out regardless of stated purpose.
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This money didn't enter the US first, it didn't get exported.
LVT with limited exemptions for primary residence and farming, mining/water taxes and pollution taxes are all you need ... tax the natural resources, the are hardest to hide.
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Actually, in many of these schemes, US income is indeed shuffled offshore.
Let's say I am 'BobCo' and make a lot of US revenue. Coincidentally, there is a 'BobCo (Virgin Islands)', a company with same name but *technically* distinct in a tax haven.
'BobCo' US operations manages to pull in 500 million dollars in profit in a year. However, they don't own the rights to any of the brands they use, 'BobCo (Virgin Islands)' owns all of it. Coincidentally, the licensing fee for those brands are 500 million for tha
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You can run into international treaty violations, because shipping money to a different subsidiary is structured to look like trade.
Non-US Income (Score:3)
Much of the $30 billion in non-U.S. royalty revenue brought in by the company's film and TV franchises, such as "SpongeBob," "Star Trek" and "Mission: Impossible," has not been subject to corporate taxes, the study determined.
Ahem... Who exactly do you think you are that the US should get to be the ones who may tax sales/income of companies selling stuff in other countries? The rights to tax or not should belong to the countries the people who paid for those product or services reside in --- that is, the countries who made that income for them. Cannot really blame companies for using legal strategies to avoid one of the main countries they work in trying to unfairly get their paws on income unrelated to their sales in that country.
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Ah, but that would mean all the non-US countries could tax Amazon, Google, Facebook, whatever for sales in their country, and that would never do.
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that would mean all the non-US countries could tax Amazon, Google, Facebook, whatever for sales in their country, and that would never do
They can and absolutely should tax sales within their own country.
In fact, IIRC... Amazon charges customers state sales tax on orders and in some countries VAT, so i'm pretty sure these companies sales ARE in fact taxable by each country in which they do business - unless a country is deliberately forgoing imposing a tax upon them in order to encourage activities relat
Not THAT company (Score:2)
No, no, no, "we" don't care about ViacomCBS. "We" care about those dirty industrial companies not paying their "fair share".
Article title is a lie (Score:2, Redundant)
1. How did it "cost" taxpayers anything? If those two movies didn't exist, we'd still have that $4.4 billion deficit (or most of it anyway.) If something is a cost, it must incur an expense. What expense did those two movies incur to taxpayers? Probably a small amount which they probably covered with US taxes, but not $4.4 billion.
2. The title makes it sound like it was just the Spingebob and Transformers movies when actually they are talking about the movie studios total revenue.
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Taxes are not about revenue. They are assessed on profits [youtube.com].
What Likely Actually Happened (Score:5, Informative)
Corporate tax planner here. Yes, I am one of those evil pointy headed folks who plans transactions such as these.
Under the U.S. tax rules that existed in 2014 (they were changed in late 2017), U.S. corporations did not pay tax on profits from overseas subsidiaries (controlled foreign corporations) until the money was actually repatriated. However, the only reason why tax was ever owed on overseas earnings was that the U.S. was one of the only countries in the world to impose tax on a worldwide basis. By comparison, many other countries (and to some degree, the U.S. today) impose corporate tax only on earnings attributable to the country in which they are earned.
In a business such as entertainment, a company will be receiving income from all over the world. It makes quite a bit of sense to aggregate the profits in a single jurisdiction that does not impose its own level of taxation on top of the tax you already paid in those countries. So, you form a subsidiary in the Caymans or Netherlands to collect all that income. That does NOT mean tax was never paid on that income, only that it was only paid in the country in which it was earned. Under pre-2018 rules, such income typically was only repatriated to the U.S. to the extent it was needed and to the extent there were sufficient foreign tax credits to cover it. The tax haven doesn't actually reduce the overall tax burden, but mostly serves administrative convenience.
To the extent that Viacom's burden was reduced in the aggregate between countries, it was because they abused the transfer prices between the low-tax holding company that owned the intellectual property and the country in which the property was licensed. But transfer pricing is very difficult to enforce because it rests on an "arms length" concept- i.e. what an unrelated third party would charge. With a unique piece of intellectual property it's difficult to arrive at a fair price. Transfer pricing is further complicated by international relations. If's a zero sum game. If one country gets more income, it means another gets less.
Finally, I would point out two things: First, corporations are not people, but people are the ones who truly pay taxes. If you are upset that corporations are not paying enough tax, it's probably really wealthy people (who profit off their investments in corporations) that you would like to tax. It's generally easier and more economically sound to tax people directly rather than complex business entities. Second, it may surprise you to know that corporate taxes are essentially optional. Any business is free to form itself as a disregarded entity, partnership, or S-corporation that does not pay an entity level tax. The only reason to form as a C-corporation is for access to public stock markets. So in essence, the corporate income tax is essentially a tax on equity financing.
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Any business is free to form itself as a disregarded entity, partnership, or S-corporation that does not pay an entity level tax.
Is that generally true of non-US jurisdictions as well?
(Super-informative posts, thank you!)
Clickbait? (Score:2)
EU citizen here (Score:2)
As an EU citizen, it drives me nuts that NL and LU are doing stuff like this. We've known about it for more than a decade (LuxLeaks, probably even before that). I'm not at all surprised that UK is doing it, they're masters in corporate shenanigans. And they're out of the EU, so I don't care as much nowadays. But to see EU founding members keeping their *MASSIVE* tax loopholes (which still brings them a lot of tax revenue) and *THEN* lecturing other EU member states on fiscal austerity and welfare reform The
Not paying != costing (Score:2)
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If Transformers had never been made, US Taxpayers would have saved $4B.
Oh, wait, no - you're quite correct.
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I don't know how many times I've seen this sort of headline. I guess they are written to make people feel outraged?
Here's a suggested revision:
US Fails to Confiscate $4 Billion from SpongeBob and 'Transformers', Study Says
Complexity is the key (Score:2)
It does not matter what your position is on corporate taxes, I personally think them stupid (since they are passed straight through to the consumers, and their primary value is in demonizing and misleading the ignorant).
There is a larger issue of governance here:
Honest laws can be written in short, simple language. The US Constitution, which is the set of laws that define the whole federal government and its relationship to the states and the citizenry is less than 5000 words.
Consider what we all know abo
abolish corporate tax (Score:2)
then watch as millions of financial engineers, corporate tax lawyers, accountants, auditors, and legislators suddenly realize that they could be doing actual useful things with their lives.
watch as the US economy saves the hundred of billions of dollars a year that is currently spent calculating and avoiding the wonderland that is the most onerous corporate tax code in the world.
watch as corporate money and employment come flooding back into the US.
watch as the federal budget barely
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More like you're a sucker for paying.
Re:Title is wrong (Score:5, Insightful)
It's not like the IRS says "well we are missing 5 billion from ViacomCBS, so you'll need to kick in an extra 10k to cover it" No that's not how it works at all, it's flat out wrong to even suggest that.
You're correct: what happens is, the government needs money it doesn't have because fuckers like ViacomCBS don't pay their taxes, the government borrows to meet the budget, and you get to pay interest on that loan in your own taxes.
What do you think the national debt is?
If the fuckers contributed what they should, some of that national debt wouldn't exist, and you would pay less interest on it.
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Bullshit. The solution here is easy - increase the tax rates above $500k. I think there should be a constitutional limit of 50% marginal rates, so graduate it up to 50% taxes on incomes over, say, $10M a year. Then increase capital gains taxes, cut out a few loopholes, etc...
That's much easier than trying to squeeze money from massively complex international megacorps. The only problem is that then they can't rouse the rabble by making them believe those "evil corporations" aren't paying "their fair share"
Re:Title is wrong (Score:4, Interesting)
Bullshit. The solution here is easy - increase the tax rates above $500k. I think there should be a constitutional limit of 50% marginal rates, so graduate it up to 50% taxes on incomes over, say, $10M a year. Then increase capital gains taxes, cut out a few loopholes, etc...
This one is the important one. The truly wealthy don't have (much) earned income. They have capital gains. When only a tiny fraction of your income is earned, the government is leaving a huge pile of money on the table.
On the flip side, there are a lot of people whose retirement savings generate a lot of capital gains, and if you over-tax that, those folks won't be able to retire.
So I propose a completely different approach. Tax capital gains as ordinary income (including Medicare and Social Security taxes). However, don't tax those gains if all of the following are true:
Then, eliminate all of the other weird and complex parts of the tax code that were designed to work around capital gains taxes being so much lower than earned income taxes (e.g. the Medicare surcharge, the alternative minimum tax, etc.).
Finally, if that results in the middle class getting a huge tax break, adjust the tax brackets upwards as needed.
That approach takes care of the middle class who are using capital gains to retire, while still taxing the capital gains of wealthy people who make most of their income through capital gains.
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... taking advantage of ...
Not sure how that word got accidentally deleted. :-D
Re: Title is wrong (Score:2)
It's bad enough tracking cost basis for one thing after a decade of splits and mergers, hell no to tracking cost basis from original cost of A to the sale value of Z with a bunch of 30 day gaps in between. Everybody will lie. If you profited from your sale of A ... Z, then pay taxes on each sale. Why does anyone need tax breaks to incentivize seeking more profit?
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Couple problems with that (Score:2)
So, there are a couple of problems with that.
First off, social security money is spent, by Congress, on their pork of the day. It's all the individual and group retirement plans that "wastefully" pay for all the factories, the ships, the chip founderies, etc. Wherever you work, your workplace is funded by retirement savings. The building you work in was paid for by somebody's retirement savings, and so was the chair in your office. Then when your company makes money using that building, the investor gets s
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> It's not about more or less. It's about having enough, And fulfilling want and desire Through personal action an exploration absent financial activity. Useless ambition is a mental dysfunction
Most of us find it easier to express our true selves of we've eaten that day.
$186K for 25 years of retirement is $7,440/year.
$620 per month.
For most of us, we can find deeply meaningful ways to use more $620 to live on.
Of course, if YOU want to live in extreme poverty, by all means you're free to do so. When you
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Re:Title is wrong (Score:4, Insightful)
That's also a gross oversimplification. These properties generate value for the economy and government beyond simple corporate tax revenue. The government generates debt because spending outpaces income (did ViacomCBS start the F-35 program?)
Re: Title is wrong (Score:2)
Well they did give us the idea of a transforming jet fighter, which is the gist of a multi-functional fighter jet like the F-35. Life imitates art.
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How much money the government spends and how much it takes in revenue is completely divorced and neither have any kind of bearing on the other.
While true, it will be interesting to see how long this lasts, now that inflation is kicking up.
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What I have to pay in taxes is not affected in anyway by how anyone else either pays or dosn't pay their taxes, our tax code is simply not written like that. It's not like the IRS says "well we are missing 5 billion from ViacomCBS, so you'll need to kick in an extra 10k to cover it" No that's not how it works at all, it's flat out wrong to even suggest that.
The IRS may not go after you directly to make up for loses that are incurred by ViacomCBS not paying a larger tax bill but you are still affected by the lose of revenue. Sure the government likes to run deficit budgets but, all things else being equal, if large corporations payed more taxes those deficits would be lower. If enough of the avoided taxes are actually paid then there may actually be a budget surplus.
Sure, if corporations paid more taxes, the government would probably just end up spending even m
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It is not obvious how films like this should be taxed. Note that the article says they avoided US corporate taxes.
If you show a film produced in the US in France, who should get the taxes? The US? France? Both of them? In this case I believe France collected the taxes and the company avoided paying again to the US. One option I do not agree with is neither country collecting.
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The business is a U.S. one though, so they can be taxed if law made.
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> If you show a film produced in the US in France, who should get the taxes?
The French theater pays French taxes on their profit from the tickets and concession sales. (Note that this is *profit* not *income* because virtually all businesses only pay taxes on what's left over after expenses.)
The US-based business that produced the film should pay US taxes on their cut, because that's their income as a US-based business. (Note that the US-based business' cut is an expense seen by the French theater, so it
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US-based business that produced the film should pay US taxes on their cut
What should happen when the US company's "cut" is zero, because they transferred away their ownership of the rights to distribute the film in France to a different company located in a third country which is neither the US nor France, In exchange for transferring away the rights, they were paid no more than the costs that can be attributed to securing those rights? E.G. They transfer away the rights, and after subtracting away th
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See my comment on flat taxes above. If ABC films makes a film for $100 million dollars, then sells it for $100 million dollars to some offshore entity, then two things happen. One is that they pay $1 million in taxes. The second is that no one invests in ABC since the idiots are losing money.
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The second is that no one invests in ABC since the idiots are losing money.
Never said ABC would be a public company -- the use of corporations with such manner of operating are a real thing and don't require the owners to be some kind of investors expecting a return. Major movie productions are almost always done by a new corporation created solely produce the movie; they're organized for the benefit of companies that will gain from them contracting with for the distribution of the movie who are happy to
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What should happen?
The executives should be jailed for intentional tax evasion.
That's not how the laws work, but it is what should happen. The laws should be changed to require everyone (and every business) to pay their share, with minimal simple to understand rules, and personal accountability enforced upon those who violate them.
Should is a fantasy, however; none of this will happen.
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It's not even a fallacy, it's an outright fucking lie. Reading the headline I assumed they somehow got some sort of government funding, but then I read the article and they mention no such thing.
It's stupid anyway. Stop worrying so much about corporate taxation. Just raise the tax rates on tax earners and raise capital gains taxes. Much simpler and easier to tax the money once it goes to a human's greedy little hands.
Shhh, redefining word definitions is PC (Score:4, Insightful)
This headline and article should be flagged as 'untrue' or 'false' Where are the 'fact checkers'?
Redefining words to make the subject more catchy is a poor way to communicate at the least. No wonder we cannot trust anything anybody says when so much is misinformation, oh but with good intentions?
Re: fallacy, not a "cost" (Score:2)
That's dumb, all sorts of things can cost your business potential revenue, bad PR, location, etc. and there's the notion of opportunity cost too.
And that's exactly how we'd phrase it, that bad PR cost us a lot of money last quarter.
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we're talking about legal matter here, there is no law that allows collecting of this hypothetical tax. It's silly to talk about revenues that aren't taxed as belonging to anyone or being a cost if not collected. It's childish.
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You're right. Buying the stock that gets stolen is a cost. The actual shrinkage is a reduction in revenue.
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Correct about "piracy" since nothing stolen and any claim about lost revenue is pure speculation that may be false; but incorrect about shoplifting since something is stolen and not only profit margin lost but original cost of item which is many profit margins' worth.
So, you are half wrong.
Re:US could be debt free and have health care (Score:5, Insightful)
Its time for a shake up
You assume the elected officials you think you voted in office work in your best interest and that is a fundamental mistake.
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Wow that is the most moronic suggestion I have seen in quite a while. 1. Most businesses do not have 30% net margin, so they are out of business. 2. The businesses that remain have an incentive to not actually employ anyone, since payroll is non-deductible in your sceenario. 3. The businesses create no common good at this point either so why should they be allowed to operate in the first place.
As for individuals while I pay more than 30% federal tax, doing that to people even with an upper-middle clas
Re: US could be debt free and have health care (Score:2)
The idea of a flat revenue tax on publicly traded companies is probably sound. 30% is insane, but as a way to address tax loopholes, there are worse options.
Obviously, this type of thing would crush startups and risky mom-and-pops, but companies who are benefiting from public investors should be able to manage their business (and cash reserves) well enough to weather a 0.2% transaction tax.
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Re: US could be debt free and have health care (Score:2)
"that is not at all the same thing"
Actually, it totally is the same thing. The statement isn't that it affects PoCs because of their skin.
We live in a real world with real people, not a theoretical framework.
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I always wonder how the complainers find out about the paywalls. Did you click the link? You must be new here.