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View Diary: This week's episode of Hoarders: U.S. companies, $itting on trillion$ (49 comments)

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  •  Ohiodem - why should profits outside the US (1+ / 0-)
    Recommended by:
    Front Toward Enemy

    be taxed by the US? Shouldn't profits be taxed in the country where the profit is earned? Shouldn't BMW pay US taxes on profits earned in the US, or should all those taxes go to Germany? Many US multinational companies have more sales and earning outside of the US than their domestic sales and profits. Why should those companies pay tax on those products where they manufacture and sell, and generate profits outside the US? Most countries around the world tax profits earned within each country. If we start trying to tax, at the standard US corporate tax rates, US headquartered companies for oversees profits you will see a steady stream of US corporate titans move their headquarters to other countries.

    "let's talk about that"

    by VClib on Wed Oct 27, 2010 at 09:43:21 PM PDT

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    •  The point I am making is that we are using our (2+ / 0-)
      Recommended by:
      drewfromct, Front Toward Enemy

      tax system to subsidize the loss of American jobs.  I am opening the Overton Window here, if you will.

      You know, a good number of formerly American companies have located offshore to avoid, or more properly evade taxes.  At least we know where their loyalties lie, and it is not in America.  We have already seen a stream of companies moving their HQ's out.  The industrial conglomerate Tyco comes immediately to mind.  How many shell companies are there in Belize and other island nations?

      If, as the Republicans say, other nations have lower corporate tax rates, then what is wrong with charging additional tax on foreign earnings at the difference between the lower foreign rate, and the US rate.  Placing a premium on foreign earned profits creates a huge sucking sound of American jobs leaving our shores, encouraged by an irrational tax system that punishes companies who don't outsource jobs.

      Why should we encourage a washing machine manufacturer to move plant and equipment offshore, abandon factories here, fire their workers, hire workers at 20 cents on the dollar, and then import the washing machines for distribution in America, and pay the company our tax dollars, because the tax burden is being shifted from that company to some other taxpayer?  Tell me how that makes any sense.

      Republicans are like alligators. All mouth and no ears.

      by Ohiodem1 on Thu Oct 28, 2010 at 06:17:54 AM PDT

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      •  Ohiodem - a few thoughts (0+ / 0-)

        Understand that large multinational, public companies are owned by investors around the globe. In some cases a majority of the shareholders (the owners of the company) are not Americans. In addition, many of these companies obtain a majority of their sales and profits from their business activities outside the US. Why should those companies pay a penalty for being headquartered in the US? I certainly understand the argument that we should not be encouraging the export of jobs and I favor eliminating any tax advantage for the specific act of relocating equipment and people to other countries. The only way to deal with this is through a tariff on imported goods. However, there is no logical basis for taxing revenues and profits that were generated outside the US and subject to local taxes in that jurisdiction. As I said if we push hard on this multinational companies will have a fiduciary duty to their shareholders to move their headquarters to another country.  

        "let's talk about that"

        by VClib on Thu Oct 28, 2010 at 08:56:04 AM PDT

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        •  Thank you VClib (2+ / 0-)
          Recommended by:
          drewfromct, VClib

          for a thoughtful discussion from a perspective I know little about and for which I typically have little patience presented in an understandable and non-confrontational manner. You've given me much food for thought.

          Condemnation of one does not constitute endorsement of another. -me-

          by Graff on Thu Oct 28, 2010 at 09:47:51 AM PDT

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        •  How about (0+ / 0-)

          Why should those companies pay a penalty for being headquartered in the US?

          because the U.S. spends trillions on a global military that is largely responsible for creating conditions of stability that contribute heavily to conduct of global commerce? I think it's more than fair to expect foreign investors to help pay for the U.S. Navy that does so much to keep shipping lanes open. By rights, every company in South Korea owes U.S. taxpayers for 57 years of peace and prosperity that allowed them to thrive and grow.

          The American commitment to global "free" trade is not free at all--it's bankrupting American taxpayers. It's more than fair to ask that everyone who benefits from our policies contributes to funding them.

          Either that, or we need to reduce our "defense" spending by about 90% and close all those overseas bases that make the world safe for global capitalism. I'd be cool either way.

          Al Qeada is a faith-based initiative.

          by drewfromct on Thu Oct 28, 2010 at 01:04:36 PM PDT

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        •  Another thing-- (0+ / 0-)

          multinational conglomerates depend on the U.S. market to purchase their goods, and the prosperity of American consumers owes quite a bit to the maintenance of American infrastructure such as schools, roads, ports, airports,police, courts, OSHA, the EPA, and so on. Without world-class infrastructure, we'd be just another third world country, and those multinationals would lose a very big and prosperous customer base. But since they gain from American government, it's more than fair to require multinationals to contribute to it.

          Corporations, CEOs, and the very rich have been having a long free ride at the expense of workers, consumers, and small-time taxpayers since the days of Reagan. It's time for them to start paying their fair share again.

          That said, I also would to thank you for engaging in rational and informative discussion.

          Al Qeada is a faith-based initiative.

          by drewfromct on Thu Oct 28, 2010 at 01:13:35 PM PDT

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          •  drew - depemdance on the US market (0+ / 0-)

            Regarding the infrastructure, big market, and other US government services, we are not discussing taxes on sales and profits generated in the US, selling into the US market. Corporations are subject to US corporate taxes for those sales and profits. We are discussing international sales and profits and what is an equitable way to tax those earnings. I am making the case that if earnings from non-US sources is heavily taxed companies will move their headquarters to another country so as to not put their shareholders at a disadvantage.

            "let's talk about that"

            by VClib on Thu Oct 28, 2010 at 01:29:17 PM PDT

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            •  Multiational corporations (0+ / 0-)

              are arguably very dependent upon U.S. taxpayers funding the world's largest military which protects sea lanes and air routes, and generally provides a peaceful and stable global marketplace.

              If they are our allies, then it is not at all unreasonable to expect them to contribute financially to help keep the world stable. If they are not our allies, then we American taxpayers must demand that we stop paying through the nose to protect hostile competitors. The country is going bankrupt and we simply can't afford it anymore.

              As for an equitable way to assess what they owe, it should be a simple matter of determining what the services of the U.S. military would cost multinational corporations if such services were to be bought and paid for in the open market according to the rules of supply and demand, and making an assessment on that basis. Bearing in mind that mercenaries are expensive, and that for-profit providers would naturally demand profits commensurate with the huge risks entailed in providing such a service, we should probably make sure that they are sitting down when we hand them the bill.

              Al Qeada is a faith-based initiative.

              by drewfromct on Thu Oct 28, 2010 at 01:47:29 PM PDT

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