Google Uses Loopholes to Cut Taxes by $3.1 Billion
Microsoft does this, too.
Pharmas, as well.
Multi-nationals "defer" (don't pay) US tax.
Ireland enjoyed benefits from being a tax haven. The Irish Tiger and all that.
FinFact reportexposes just what that cost the Irish people as well as the US.
Billions in tax revenues.
I have to run so the following is offered for the record. I hope others may delve and run with this.
I would like to make a couple of obvious points:
- The Bush Tax cuts have done nothing to help create jobs for 10 years, so that GOP BS about needing the tax cuts for the wealthy to create jobs is just that, BS.
- No one is talking about the huge tax cuts the likes of Phizer, Microsoft, Google, Dell and the multi-nationals have enjoyed for the past ten years.
Oops, UK: Kraft just stuck it to you. Say good bye to Cadbury taxes.
IF THE POOREST AMONG US must sacrifice, it is heinous that they are asked to do so at the altar of the profits being enjoyed by multi-nationals who pay less tax then these very same poor who can not avoid paying taxes.
The following are quotes from this FinFacts article.
Highlights are mine.
The point of this diary is to provide some understanding of what I will refer to as The Tax Haven Games that have been played by multi-national corporations which have greatly reduced the taxes they pay to the US Treasury, as well as the havens they used.
Though this report is dated, it offers insights that can raise important questions that The Deficit Hawks/Cat Food Commission should be asking.
I highly recommend studying this FinFact report, which includes studies from several viable sources.
MY QUESTIONS:
Can countries sustain their budgets (properly maintain infrastructure, education of the work force, and social stability) when CORPORATE PROFITS are TAXED AT A LOWER RATE THAN THOSE PAID BY LOW-WAGE EARNERS and DIVIDENDS AREN'T TAXED AT ALL?
Can the consumer afford to pay for both the requirements of corporations (as stated in question one above) and for the products/profits of the multi-nationals?
What percentage of investment into local/country-wide budgets by the multi-nationals is necessary to maintain and even improve the foundations required for their continued profitability and growth?
Multi-nationals can grow and thrive; however, there is a price that is required if the populations they rely upon as consumers of their products are to remain stable enough to sustain the multi-nationals goals. Isn't this logical?
The global downturn was caused by irresponsible corporate behavior by banks, or so we are all told. If so, the case is strong that responsible investment by multi-nationals, levied via taxes is really in their best interest over time.
Here are some quotes from the FinFact article:
Interestingly, at the same time the housing debacle launched, so did the complex, albeit legal by legislation, shell game of using tax havens to avoid US tax liability.
Thank you, Republican Congress circa 1999-2006!
Between 1999 to 2002, US multinational corporations increased profits in countries with no taxes or low rates by 68% while sharply reducing profits recorded in countries where they engage in substantial business activity, a study published in the journal Tax Notes shows.
In a second study published in Tax Notes on September 27, Martin Sullivan estimates that the diversion of profits to tax havens around the globe may be depriving the United States Treasury of anywhere from $10 billion to $20 billion in lost tax revenue each year. In 2003, United States multinational corporations shifted $75 billion in domestic profits to no-tax and low-tax foreign havens like Bermuda and Ireland
In October 2004, the US Congress passed a Corporate Tax Bill, which was prompted by a US need to comply with a World Trade Organisation ruling to end a domestic tax subsidy for US exporters.
The Bill offers almost $43bn in new measures over the next decade aimed at reducing the US tax paid on the overseas earnings of US companies. The key provisions ensure that companies can make maximum use of foreign tax credits that allow them to deduct from their US taxes every dollar in tax paid to a foreign government.
The Bill provides for a tax holiday that allows companies to bring home those deferred overseas earnings at a tax rate of just 5.25 per cent, a move that is expected to bring more than $100bn back into the US. The holiday has been termed as a "temporary stimulus" and that there is "no intent to...enact it again in the future".
The Financial Times quotes Martin Sullivan of Tax Notes as saying that while the tax holiday may keep US companies happy for a while, "as they build up profits again, it's more than likely that there'll be another amnesty because they'll start lobbying again".
Ireland's low corporate tax rate of 12.5% on trading profits has been a magnet for multinational companies who are responsible for 90% of Irish exports and a significant contributor to the success of the modern Irish economy, commonly known as the Celtic Tiger.
Ireland's annual corporate tax revenue is about €5.3 billion ($6.3 billion). The Wall Street Journal said in its report that a Microsoft Dublin-based company that is used for routing patent a royalty income from overseas operations, paid the Irish Revenue $300 million in taxes last year.
Ireland's tax exemption in respect of certain patent royalties, has been one of the driving factors behind investment by pharmaceutical multinationals, principally from the US, in the Irish economy.
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In effect, the Irish tax exemption on patent income, could well fund over 5% of the Irish Government's planned total spending (current and capital) of €48.5 billion, in 2006.
The dividends paid by Dell were paid through a patent royalty company called Dell Research Ltd. Recently filed accounts show that it had accumulated $91.7m in retained profits, none of which is subject to tax under current Irish legislation.
Up to half of Irish corporate tax receipts may relate to taxes paid on profits transferred from other overseas units of US corporations, to its Irish subsidiaries.
I have to run. Have a great day.