US Politics: Tax Inversions are a result of Political Gridlock

[Cuellar]

That's not possible. Those are mutually exclusive obligations. You can't have a fiduciary duty to both.

Not necessarily. Look at Costco vs Walmart. Also, most startups and tech companies WANT their employees' aligned with shareholders, hence why they give out so many stock options. In many cases, the shareholders aren't really acting in their own best interest either, given the amount of companies that are owned by pension plans and mutual funds you'd think they'd force companies to act in the best interest of US GDP.

I personally try not to shop or use companies that act like total assholes, or are abusive. Generally that is the only way to get them to stop doing this shit. Easy example is Chick-fil-a, where they stopped their stupid bullshit once it started to hurt sales.

[Fragile Bird]

I need to go back and read the end of the last thread, but with regard to Burger King, I'm shaking my head and rolling my eyes at all the wailing and gnashing of teeth.

Burger King paid about 27.5% in taxes last year, and in Canada will pay about 26.5%. No one moves their company for a 1% difference. Burger King is, frankly, a pretty mediocre company. Tim Horton's is a well run, growing company with excellent management. Burger King is doing this merger to acquire the expertise in Tim Horton's, and Tim Horton's is doing it because they want to grow faster and Burger King does 40% of their business outside of North America, in markets that Tim Horton's is interested in, like Asia.

After the merger, Burger King WILL STILL PAY 27.5% on their US business. They don't stop paying taxes in the US because they moved to Canada. What they might do going forward is repatriate some earnings. The US was not getting any taxes on foreign earnings because Burger King wasn't bringing home foreign profits.

The US is only one of two countries in the world that taxes the worldwide income of non-resident citizens, Eritrea being the other one.

The issue of foreign income is a big one and getting bigger. Many companies refuse to repatriate their foreign profits because of the huge amounts involved. No US jobs are being lost, the jobs are in foreign countries, [i would add, unless plants were closed in the US and re-opened elsewhere] no US company is hiding behind the protection of the US, they're out there with their boots on the ground in a foreign jurisdiction where they are paying their taxes in that country on the profits made in that country. Those countries are not taxing them for the earnings they make in the US or any other country, and these companies are wondering why they have to pay taxes again on their earnings in the US. Some of the foreign tax rates are very low, and bringing the money back the rate they would pay could be as high as 35%. Almost 2 trillion dollars is being parked off shore.

The solution is likely to lower the tax rate on foreign earnings. Good luck on that, with this Congress and Senate.

Decades ago most US companies made all or substantially all their profits in the US, so the issue wasn't that big. But starting back in the 70s or so, more and more companies thought about foreign expansion, and gradually more US companie went overseas.

Before Jack Welch, I think GE made only 10 or 15% of their profits outside of the US, and now I think it's about 40%.

/edited because I posted too soon :p

[The Fallen]

But is it foreign expansion or outsourcing American jobs? It seems to be more of the latter.

[Wee baby Shamus]

There is no such thing as "enough profit." Companies will always maximize their profit margins. That's what they're supposed to do. So unless you want to race to the bottom and have environmental regulations and labor regulations on par with places like Vietnam and Bangladesh, you will never win the companies over form just giving them more monies alone.

According to the President there is such a thing.

[NestorMakhnosLovechild]

Not necessarily. Look at Costco vs Walmart. Also, most startups and tech companies WANT their employees' aligned with shareholders, hence why they give out so many stock options. In many cases, the shareholders aren't really acting in their own best interest either, given the amount of companies that are owned by pension plans and mutual funds you'd think they'd force companies to act in the best interest of US GDP.

I personally try not to shop or use companies that act like total assholes, or are abusive. Generally that is the only way to get them to stop doing this shit. Easy example is Chick-fil-a, where they stopped their stupid bullshit once it started to hurt sales.

I don't think you know what "fiduciary duty" means. Costco doesn't (and couldn't) have a fiduciary duty to their employees.

[Istakhr]

The US is only one of two countries in the world that taxes the worldwide income of non-resident citizens, Eritrea being the other one.

While I am a proponent of zero corporate tax, I am not at all sympathetic to this line of argument about not taxing non residents.

Both US companies and individuals living and/or doing business outside US massively profit from the American Empire. This situation is not comparable to any other country in the world.

[daskool]

While I am a proponent of zero corporate tax, I am not at all sympathetic to this line of argument about not taxing non residents.

Both US companies and individuals living and/or doing business outside US massively profit from the American Empire. This situation is not comparable to any other country in the world.

This is nonsensical. These companies are being taxed twice, once in their foreign business and again when they repatriate the money back to the US. It's a ridiculous state of affairs. The problem is not companies like Apple and Google refusing to repatriate foreign earned income to avoid paying tax twice it's them, and almost all multinationals, using foreign domiciled companies as cost centers to avoid paying tax. The 'business' in the British Virgin Islands billing their American operation billions. This is clearly fraudulent accounting that would land an ordinary citizen in jail should they do the same.

[Crazydog7]

This is clearly fraudulent accounting that would land an ordinary citizen in jail should they do the same.

Yes but the average citizen does not have a crowd of lawyers at their command so they know where all the loopholes are. While I would be the first to the barricade to protest whatever soulless corporation is oppressing us at the moment if you need to look for the guilty party in all this try a mirror

We created this system that survives on making sure these multinational corporations only have to do to the bare minimum on any given issue be it paying their employees a wage they can live on or making sure they dispose of their industrial runoff in a safe manner.

Out of sight out of mind. Its like the issue of taxes everyone has a vague sense that the roads and bridges they are driving on come from one big common pot and while they recognize the need for improvements to roads and bridges they’ll be damned if they are going to pay for them but….still want to use the newly renovated roads and bridges.

The really scary part in recent years is the fetishism of wealth. Its not enough that some rich bastard trashes his own company hoping to sell off pieces at a profit but he gets to walk away with 20 million or so in severance. And people shrug and say “hey fuck it man that’s the system what are you going to do? And then turn around and beg the rich guy to invest 5% in his local economy.

[Ramsay Gimp]

This is nonsensical. These companies are being taxed twice, once in their foreign business and again when they repatriate the money back to the US. It's a ridiculous state of affairs. The problem is not companies like Apple and Google refusing to repatriate foreign earned income to avoid paying tax twice it's them, and almost all multinationals, using foreign domiciled companies as cost centers to avoid paying tax. The 'business' in the British Virgin Islands billing their American operation billions. This is clearly fraudulent accounting that would land an ordinary citizen in jail should they do the same.

Not saying I support taxing foreign income, but you didn't really respond to Istakhr's point about the role played by American hegemony

[Shryke]

Oddly enough I agree. (though probably for different reasons) don't expect corproations to not act like sociopaths: That's not how they're designed. CHange the rules to incentivize them to behave better.

The problem is that those sociopaths can change those incentives. And often find it more profitable to do that then to just follow the rules.

[The Marquis de Leech]

Not necessarily. Look at Costco vs Walmart. Also, most startups and tech companies WANT their employees' aligned with shareholders, hence why they give out so many stock options.

Fiduciary duty has a very specific meaning. I don't think it means what you think it means: the employee and employer relationship has a direct and obvious conflict of interest that would destroy a fiduciary duty (duty to obtain profits vs.the employee's interests to achieve higher wages).

[Istakhr]

Fiduciary duty has a very specific meaning. I don't think it means what you think it means: the employee and employer relationship has a direct and obvious conflict of interest that would destroy a fiduciary duty (duty to obtain profits vs.the employee's interests to achieve higher wages).

You can maximize two variables at the same time.

For example if profit was an independent constant, a double mandate of both fiduciary duty and maximizing employee would mean dividing the total profit 50/50/

[TrackerNeil]

Please forget this. Great Seven.

[TrackerNeil]

Did you catch that I pivoted from Paul Ryan to Rand Paul in that post?

I am absolutely not predicting that Rand Paul will be the nominee.

Oh for crying out loud. OK, I've been playing Ultimate in the hot sun today, so you should ignore me for today. Seriously.

[Ramsay Gimp]

I've got an early prediction. I think Paul Ryan is going to be the GOP nominee.

I think there are signs that he's going to run, and I think he'd be the likeliest to win if he did. He's trying to revise that "takers versus makers" language by saying it wasn't meant to offend or some BS, he's whitewashing that Atlas Shrugged is a book that not only got him into politics but he made his staffers read it, he's doing "poverty tours" where he goes and talks to poorer people while making sure that there are reporters around and stuff, and then I think he's still sort of in that space kind of like Scott Walker where he can be tolerated by the base and the establishment or what have you.

Plus, with that hair, you know many septuagenarian GOP voters will convince themselves that they see the spitting image of Ronald Reagan brought back to life in his 40's to save us from evil.

I still maintain that Rand Paul is way overrated. I just don't see how he wins GOP primaries with this many transgressions against orthodoxy on his resume. The country may indeed be leaning closer to ending the war on drugs and being more non-interventionist abroad, but I seriously doubt that this holds true in most GOP primary states.

Not to mention Paul makes the establishment GOP and many of their donors very uncomfortable, despite making some inroads. They'd line up behind Ryan in a heartbeat if he ran

I'll still hold out hope though :frown5:

[TerraPrime]

The type of classy act that we have come to expect and cherish from the GOP:

http://www.addictinginfo.org/2014/08/27/gop-senate-uses-footage-of-james-foley-execution-in-campaign-ad-ignoring-familys-wishes/

(synopsis: GOP Senate candidate from New Mexico used footage from the James Foley execution video in his campaign ad.)

[BloodRider]

Lovely.

[Ramsay Gimp]

The type of classy act that we have come to expect and cherish from the GOP:

http://www.addictinginfo.org/2014/08/27/gop-senate-uses-footage-of-james-foley-execution-in-campaign-ad-ignoring-familys-wishes/

(synopsis: GOP Senate candidate from New Mexico used footage from the James Foley execution video in his campaign ad.)

Holy hell what a dirtbag. I felt guilty for even watching that video

[Commodore]

Did you watch the ad?

It didn't even show Foley. And it wasn't "footage of an execution", it was a cropped stillshot of a jihadist that is in every newspaper.

That was a well crafted ad. "The POTUS's foreign policy is emboldening our enemies, my opponent supports the policy, vote for me for a change". Pretty basic argument.

[Prosesskrift]

"My opponent is stupid and smells funny" is also a basic argument, but as with the ad it is hardly a clever or well crafted one.