[quote]The Obama administration announced on Monday that it will use its regulatory authority to crack down on tax inversions, the maneuver used by Burger King and other companies to cut their tax bills by moving their tax home outside the United States.
“We’ve recently seen a few large corporations announce plans to exploit this loophole, undercutting businesses that act responsibly and leaving the middle class to pay the bill, and I’m glad that [Treasury] Secretary [Jack] Lew is exploring additional actions to help reverse this trend,” President Barack Obama said in a statement.[/quote]
[quote]Both Lew and Obama have said that they would prefer to see Congress take action to prevent inversions, but lawmakers have been deadlocked. Most Republicans have argued that a tax code overhaul is the only way to prevent companies from moving abroad, while Democrats would prefer to do something to address inversions, nothing that tax reform is a ways off.[/quote]
[quote]Asked why the administration is not making retroactive changes, as some lawmakers have proposed, the official said the announcement is consistent with how they normally implement new rules.
The Treasury Department did not take former Obama adviser and Harvard University professor Stephen Shay’s advice to target so-called earnings stripping by using its regulatory powers to reclassify company debt as equity.[/quote]
[quote]Critics of the practice hoped last month’s news that Burger King plans to move its headquarters to Canada in part to slash its U.S. tax bill — making it by far the biggest name so far to announce inversion plans — would force Congress to act. But lawmakers left Washington last week without any agreement on a path forward and are not expected to return until after the November midterm elections.
Both Democrats and Republicans still insisted that Congressional action is the best solution. Senate Finance Committee Chairman Ron Wyden (D-Ore.), said in a statement that Congress should move legislation in the lame duck session later this year.
“Only Congress has the full range of tools to address both the immediate problem and ensure U.S. businesses continue to be competitive in the global economy,” he said.[/quote]
[url]http://www.politico.com/story/2014/09/white-house-corporate-offshore-taxes-111223.html?hp=l2[/url]
but it'll stiffle growth by forcing them to pay their already meager share of taxes instead of paying it out in dividends!
[editline]22nd September 2014[/editline]
/sarcasm
Good.
Legal or not this is still really shitty. Considering tax is the revenue of the government, which funds all those nice things we enjoy like roads, schools, etc, when companies do shit like that it's basically shafting everyone else.
I want to see it before ill believe it.
Maybe we could not have the highest corporate tax rate in the industrialized world? Become competitive instead of punishing the seeking of greener pastures? On the other hand, these loopholes aren't accidental. Lobbyists made sure their benefactors got what they wanted when legislation like like this was passed.
[QUOTE=ilikecorn;46055765]When you have the richest corps in the world hq'd in your country, it's more than acceptable to have a high tax rate on them. Maybe if they have to pay higher taxes they'll not be able to lobby as hard, and we'll finally get shit done.[/QUOTE]
And then move their HQ to Canada (BK), the UK (Pfizer), or Ireland until inversion is illegal, which is doubtful. We should ask ourselves what makes Canada and the like attractive to corps or what makes them want to move tout of the US. Yes, corps should be taxed, no argument there, but as long as they can vote with their feet they will. As beholden to lobbyists as our lawmakers are, it's hard to see them pass any laws against this.
[QUOTE=ilikecorn;46055765]When you have the richest corps in the world hq'd in your country, it's more than acceptable to have a high tax rate on them.[/QUOTE]
Unless they stop being HQ'd in the country because the benefits aren't worth the expense.
An international company will headquarters themselves wherever the benefit/cost ratio is greatest. The US doesn't offer enough incentives to offset the very high tax rate, and since we're friendly towards foreign businesses (hello, China) they don't lose anything by moving elsewhere. Passing legislation specifically against tax inversion is a brute force solution to the more fundamental problem of businesses not having much reason to stay here when they can instead have an international presence.
Took them long enough.
[QUOTE=catbarf;46055991]Unless they stop being HQ'd in the country because the benefits aren't worth the expense.
An international company will headquarters themselves wherever the benefit/cost ratio is greatest. The US doesn't offer enough incentives to offset the very high tax rate, and since we're friendly towards foreign businesses (hello, China) they don't lose anything by moving elsewhere. Passing legislation specifically against tax inversion is a brute force solution to the more fundamental problem of businesses not having much reason to stay here when they can instead have an international presence.[/QUOTE]
Then I guess we'll have to make some incentives to stay here AND get rid of tax evasion. It's not that hard to divide resources.
You people act like nobody else taxes businesses in their country. If anything, the fact that they can throw unlimited money at our Government for favours means they should be taxed high for that privilege. As long as they're doing business in our country, they should have to pay a tax, preferably proportional to the amount of business (obviously Dunkin' Donuts would be more than Tim Horton's, because they have a massively larger presence).
AFAIK the reason why BK moved isn't because they "didn't want to pay tax" but rather they were being double taxed on income generated outside of the HQ's country.
I.E. income made in Canada is taxed by Canada and then taxed again when the money reaches the HQ in the US.
Reforms to make the tax code much simpler (and with fewer loopholes) would be really nice, but right now I'll settle for this.
He better be fast. With all the shit that happened with ACA he should know that going slow will just strip the crackdown of everything but the name.
Isn't the NFL nonprofit? How does that work and they still sue everyone under the sun for knockoffs.
[QUOTE=ilikecorn;46058562]Then you ban them from doing business in the US, thus completely crippling them, thus making it a fiscal disaster to move out of the country, thus forcing them to pay taxes.[/QUOTE]
And then, when Chinese and Japanese electronics, Indian clothing, European furniture and fine goods, and African and South American raw materials get cut off because companies in those areas are based outside the US, our economy is utterly destroyed overnight and we go back to the Depression. Have you [I]really[/I] thought this idea through at all?
We can't force companies to be in the US to deal here, because our economy is dependent on imports. And if we have such high taxes with few benefits, there's no strong incentive for companies to [I]not[/I] pack up and leave at the earliest opportunity.
If we want them to stay, we need to make staying in the US more attractive. Reducing the tax rate to be more in line with other nations could do that, and end up making the government more profit if we can tax the big corporations who would otherwise leave (and be worth nothing).
Good. It's always a scumbag move for companies to "relocate" headquarters outside the US. I get that they want to make more profits that way but by doing so, they basically shaft everyone else.
That's not tax evasion. The US government charges income tax on all money made overseas by US companies, even if those companies pay income tax in those countries. We're the only country in the world to do this. Fuck the gov't in this case.
[QUOTE=Coppermoss;46055452]Maybe we could not have the highest corporate tax rate in the industrialized world? Become competitive instead of punishing the seeking of greener pastures? On the other hand, these loopholes aren't accidental. Lobbyists made sure their benefactors got what they wanted when legislation like like this was passed.[/QUOTE]
Or maybe they shouldn't avoid them?
[QUOTE=ilikecorn;46055765]When you have the richest corps in the world hq'd in your country, it's more than acceptable to have a high tax rate on them. Maybe if they have to pay higher taxes they'll not be able to lobby as hard, and we'll finally get shit done.[/QUOTE]
Are you kidding? They'll lobby even harder if company tax goes up, it would be a massive opportunity cost if they didn't lobby or if they did lobby and weren't successful.
[editline]24th September 2014[/editline]
The US does have rather high company tax rates though, and that probably aggravates the problem of tax evasion.
Until the churches start paying taxes, I'm going to side with the businesses. The tax laws in this country are beyond ridiculous.
You know, if you made a company and you paid yourself, you'd have to pay tax on top of your business tax? Say goodbye to 70% of your money. Where's the incentive? Fuck that.
[QUOTE=duckmaster;46061120]Or maybe they shouldn't avoid them?[/QUOTE]
That's what Burger King did. They moved to another country. They're not working to avoid this bullshit anymore.
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