This needs to come to an ubrupt end.

[cpwill]

We don't encourage them to keep them overseas.

We do, in fact. If you earn a million overseas, and you can reinvest that full million back overseas, or invest 65% of it back here in the US, you keep it overseas. We create a high punitive rate (we have the highest corporate tax rate in the OECD)

We have laws that claim those assets.

No we don't. We have laws that demand a chunk of those assets when they come home. So long as the company keeps them overseas, it's fine.

Considering that our policy ought to be to encourage investment in America, of course, this is stupid.


Wait. Do you think that we should shape policy to encourage investment in America?

 

[radcen]

there is one major difference between a "personal" return, and a business return

one employs people.....

those people in return file "personal" returns

see how the system works?

Yes, I do. It works effed-up. I "employ" people, too... mechanics, doctors, etc. Unless you're being argumentative for argument sake, there's nothing to defend here.

 

[radcen]

Define revenue. I define revenue as being total sales and not net profit. The tax code is often (ab)used to reduce that net profit by sanctioning all sorts of deductions, credits, exclusions and creative accounting methods. Why should a taxable entity not simply have to pay a sales tax instead of an income tax? The SS "contribution" (really a tax) is applied to gross income, just like a sales tax is, and is quite regressive yet many see that as being a "fair" tax.

I would define revenue like you do, if I'm understanding you correctly. The total amount of money you bring in, before anything is paid out. Taxes should be a simple cost of doing business just like paying wages, utilities, etc.

 

[ttwtt78640]

I would define revenue like you do, if I'm understanding you correctly. The total amount of money you bring in, before anything is paid out. Taxes should be a simple cost of doing business just like paying wages, utilities, etc.

So, in your view, most companies should pay far more in taxes than their net profit percentage. How would you feel about a personal 20% sales (or gross income) tax rate?

 

[Mycroft]

So, in your view, most companies should pay far more in taxes than their net profit percentage. How would you feel about a personal 20% sales (or gross income) tax rate?

My taxes are withheld at a 25% rate. Believe me, I don't get more than 5% of that back when I file my return...so yeah...I already pay around 20%. And that comes off the top...before expenses.

Why should a business be treated any different?

 

[VanceMack]

I'm a bit slow in the head sometimes...but isn't that just like what Walmart is doing here?

Probably.

 

[Unrepresented]

We do, in fact. If you earn a million overseas, and you can reinvest that full million back overseas, or invest 65% of it back here in the US, you keep it overseas. We create a high punitive rate (we have the highest corporate tax rate in the OECD)



No we don't. We have laws that demand a chunk of those assets when they come home. So long as the company keeps them overseas, it's fine.

Considering that our policy ought to be to encourage investment in America, of course, this is stupid.


Wait. Do you think that we should shape policy to encourage investment in America?

We already are able to encourage investment domestically. We're the world's largest market. You're advocating undercutting our value by giving that advantage away.

 

[cpwill]

We already are able to encourage investment domestically. We're the world's largest market.

You didn't answer the question. Do you think that we should shape policy to encourage investment in America?

You're advocating undercutting our value by giving that advantage away.

On the contrary, I am arguing for a policy change that would instantly increase that advantage.

 

[joG]

Walmart has chipped $3.5 billion off its income tax liabilities over the past six years by stashing $76 billion in profits in offshore tax havens using a complex network of well-disguised subsidiary corporations, according to new research from one of the unions that backs long-running efforts to organize workers at the American retail giant.

The researchers combed financial disclosure documents from the U.S. and multiple other countries to uncover 78 separate Walmart subsidiaries with names like “Azure Holdings” that do not suggest that they are connected to the Arkansas-based chain of stores. Walmart “has never listed any of them” on the subsidiaries section of a required annual corporate filing with American regulators, the United Food and Commercial Workers (UFCW) report says. The company has no physical locations in those countries, but routes revenue from its thousands of international stores through the companies, about half of which are registered in Luxembourg, the Virgin Islands, and the Netherlands.

In Luxembourg, the alleged tax-reduction strategy relies on a financial shell game. The company has shifted $45 billion in assets into its 22 subsidiaries there in the past four years, but reported only a fraction of that amount in profits. It paid a 1 percent tax rate in Luxembourg on $1.3 billion in profits from 2011 to 2013, according to the report. Like most other high-profile corporate tax avoiders, Walmart has achieved its massive tax savings through careful use of legal tax strategies. International tax rules involving loans between two different subsidiaries of the same company mean that Walmart can take out debt from itself, deduct the debt in one country, and pay low or non-existent tax rates on interest payments associated with the loan in a second country.


Why Walmart Has 22 Secret Subsidiaries In Luxembourg | ThinkProgress

I have seen a lot of such structures and found they are usually totally legal.

 

[Unrepresented]

You didn't answer the question. Do you think that we should shape policy to encourage investment in America?

Yes, I see loophole closing as the means of doing so.

On the contrary, I am arguing for a policy change that would instantly increase that advantage.

You're arguing for a policy that benefits business at the expense of taxpayers.

 

[gdgyva]

so any money a company earns, no matter where it was earned.....you believe the US government is entitled to a piece of it, because the company has part of the business here?

i dont want to put words in your mouth....but is that your take?

do you think they should pay taxes twice on the same earnings? once in country where it was earned, and again here?

 

[cpwill]

Yes, I see loophole closing as the means of doing so.

Okay. How is increasing the cost of investing in America a means of encouraging investment in America?

 

[cpwill]

so any money a company earns, no matter where it was earned.....you believe the US government is entitled to a piece of it, because the company has part of the business here?

i dont want to put words in your mouth....but is that your take?

do you think they should pay taxes twice on the same earnings? once in country where it was earned, and again here?

I don't think he realizes that the more he increases the costs of doing business here, the more companies will just do business overseas.

 

[TurtleDude]

Every time issues like this come up, it just bolsters my desire for a true flat tax. You make $X, you pay x%. Period. People and business. You want to maximize profits? Work on increasing sales and revenue. Done.

More importantly, when the pimps in office want to pander to the masses, they won't be able to do so by promising more handouts paid for only by tax hikes or rate increases on "the rich"

want to buy the votes of the masses-well the pimps will have to raise taxes on everyone

 

[Mycroft]

I don't think he realizes that the more he increases the costs of doing business here, the more companies will just do business overseas.

That's what happens when one forms their opinion on "feelings" instead of rational reality.

 

[Unrepresented]

Okay. How is increasing the cost of investing in America a means of encouraging investment in America?

It's "investment" whether it comes through trickle down, laissez faire direct spending or whether it's gained from taxation. Either way that money comes through our system. Closing loopholes supports the latter, reducing liabilities increases the former.

 

[gdgyva]

this is based on a company i no longer work for....but is real numbers from an average years business


sales 115,000,000
cost of sales 92,000,000
gross profit 23,000,000


semi fixed costs 10,500,000 (admin, advertising, payroll taxes, employee benefits, etc)
fixed costs 8,000,000 (rent, insurance, utilities, etc)

net income 4,500,000 profit before income taxes

taxes 2,200,000

net after taxes 2,300,000

that is a real business....that employed about 125 people

based on the above tax plan, the owner would have owed 23m in taxes based on a 20% revenue tax

how do you expect him, or any other business person to stay in business under that scenario?

please....learn a little bit about HOW business is done.....before you start trying to suggest tax plans that in NO WAY are based in reality

 

[cpwill]

It's "investment" whether it comes through trickle down, laissez faire direct spending or whether it's gained from taxation. Either way that money comes through our system.

No it doesn't. It stays outside our system because we have made it more affordable to be housed overseas.

But that's an interesting assumption. Do you believe that the government allocates resources as productively as the market does? If so, why do forms of government that are dependent upon government allocation of resources for purposes of production fail so miserably?

Closing loopholes supports the latter, reducing liabilities increases the former.

On the contrary, so long as that money stays overseas, it is untaxed. If we decide to start taxing international incomes of US-based businesses regardless of where it is earned and spent, then all we do is create a massive incentive for those businesses to move their headquarters overseas.

That's the problem with geese that lay golden eggs. If you kill them, no more eggs.

 

[cpwill]

this is based on a company i no longer work for....but is real numbers from an average years business


sales 115,000,000
cost of sales 92,000,000
gross profit 23,000,000


semi fixed costs 10,500,000 (admin, advertising, payroll taxes, employee benefits, etc)
fixed costs 8,000,000 (rent, insurance, utilities, etc)

net income 4,500,000 profit before income taxes

taxes 2,200,000

net after taxes 2,300,000

that is a real business....that employed about 125 people

based on the above tax plan, the owner would have owed 23m in taxes based on a 20% revenue tax

how do you expect him, or any other business person to stay in business under that scenario?

please....learn a little bit about HOW business is done.....before you start trying to suggest tax plans that in NO WAY are based in reality

If we tax them all at 100% of income, but score it statically, we'll make loads of revenue!!!

 

[Unrepresented]

No it doesn't. It stays outside our system because we have made it more affordable to be housed overseas.

But that's an interesting assumption. Do you believe that the government allocates resources as productively as the market does? If so, why do forms of government that are dependent upon government allocation of resources for purposes of production fail so miserably?



On the contrary, so long as that money stays overseas, it is untaxed. If we decide to start taxing international incomes of US-based businesses regardless of where it is earned and spent, then all we do is create a massive incentive for those businesses to move their headquarters overseas.

That's the problem with geese that lay golden eggs. If you kill them, no more eggs.

Again, it's untaxed because we're tolerating the loopholes that let it remain untaxed. Closing those loopholes forces them to either give up access to the largest market in the history of the world or pay up.

The government and the market are both equally as bad or as good at allocating resources, it's simply a matter of how you want the resources allocated and how much each person decides where they should be allocated.

 

[radcen]

If we tax them all at 100% of income, but score it statically, we'll make loads of revenue!!!

Then it wouldn't have to be 20%, would it? It could be lowered.

Hint: 20% was just for example purposes.

 

[gdgyva]

Then it wouldn't have to be 20%, would it? It could be lowered.

Hint: 20% was just for example purposes.

do you realize that it takes most businesses around two years to just break even?

i dont care if you tax revenue 3%.....you will kill the economy

why would people risk money to owe the government money, and never see a nickel themselves?

small business is the wheel that turns the economy.....they employ the bulk of people in this country

taxing revenue is the fastest way i know to kill the entrepreneurial spirit

we want new businesses....lots and lots of them....the more the better

your idea would kill them....period

 

[Henrin]

It's "totalitarian" to want companies to pay their taxes?

Taxes should never be compulsory in the first place, but yes, the current system is oppressive. It forces people into labor so the government can have a cut of the fruits of their labor. Another reason I say it should never be compulsory is that it encourages government growth and corruption.

 

[sangha]

Not until it has been earned by the parent company via dividends of the foreign subsidiary, until then, it is deferred. In the meantime, these companies have subsidiaries in places such as Luxembourg because the tax rates there are low. Again, how do the people of Luxembourg feel about their low corporate tax rates?

A better question would be "How do the people of the EU feel about Luxembourg being a tax haven?"

The answer is, they don't like it any more than we do and the EU is cracking down on Lux's tax policies arguing that they amount to "state support" of industries which are illegal.

 

[sangha]

Here's roughly how I envision how a corporate tax form should look...

A) How much revenue did you earn in 2014?: ________

B) Multiply Line A by 0.20: ________

C) Write check for amount in Line B and send it in.

That's an over-simplification, of course, but that's the gist.

That's one of the stupidest ideas ever

If you tax revenue instead of profits, low-margin businesses will go bankrupt. Some will survive by raising prices, contributing to inflation, but the higher prices would lower demand resulting in fewer businesses and lower employment.