As Burger King eyes moving to Canada over U.S. corporate taxes, Apple, Google, Microsoft have it their way, too

“With all the talk about inversions and America’s Burger King Going Canadian, it’s easy to ignore even more prevalent tax savings by numerous American companies,” Robert W. Wood writes for Forbes. “Take Microsoft, which admits in its 2014 SEC filing that it avoids $30 billion in U.S. taxes. The trick? Keep about triple that amount, $93 billion in Microsoft’s case, outside the U.S., says The International Business Times.”

“Microsoft is hardly alone. In fact, in taxes, Apple doesn’t really Think Different,” Wood writes. “A Citizens for Tax Justice (CTJ) report says from 2007 to 2013, Microsoft increased its money offshore from $6.1 billion to $76.4 billion… Company after company has been showcased by the Senate Permanent Subcommittee on Investigations. Recently, even earthbound Caterpillar sidestepped $2.4 billion in U.S. taxes over 13 years by shifting profits to Switzerland… But Caterpillar defended the deal as legit, echoing others who have appeared before Levin, including Apple’s Tim Cook. Increasingly, companies—and some Republicans—say the tax code is to blame.”

“Tax havens like Ireland are favored by global giants like Apple, Google, HP, Facebook and Twitter. In May 2013, the Senate Permanent Subcommittee on Investigations said Apple avoided $9 billion in U.S. taxes in 2012 alone via offshore units with no tax home,” Wood writes. “U.S. companies are said to have more than $1.5 trillion offshore. They keep the money there to avoid taxes they would face on bringing it back to the U.S.”

Read more in the full article here.

MacDailyNews Take: The U.S. corporate tax rate is way too high. Obviously.

Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth.Apple CEO Tim Cook, May 21, 2013

Related articles:
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013


      1. Tax dodgers are those who don’t pay their obligated and legal taxes. Quite frankly, it is disturbing when warped minds put a SPIN on outright legal issues that they don’t like and insinuate that these companies are tax dodgers.

        BK, Apple and others are not tax dodgers, they are following the tax codes.

        You may not like it, but tough, they are not tax dodgers as you insinuated. By saying “They are” (tax dodgers) when they are not means that you are a liar, pure and simple.

  1. This are just burger flipper jobs anyway, and Obama says the US tax rate is not yet high enough to finance all his grand plans for America. 95% taxes should just about do it.

    1. Careful what you wish for. Lower corporate taxes and you raise personal taxes. You can’t have it both ways.

      I suspect that the reason corporate taxes are so high is because personal taxes are so low. Canadian personal taxes are much higher, for example. If I were to guess, I’d say that the US doesn’t have as much control over what it taxes its citizens. Canada, for example, has a 5% national Sales tax (GST). The UK has one as well (VAT). Japan has just increased their consumption tax to 8% from 5%. In the US, sales tax is controlled on a state by state level.

      If you were to say… we’re lowering corporate taxes and instituting a national sales tax, you’d probably have a revolt. As a result, it’s simply EASIER to tax corporations higher.

      1. That’s not the point: the US is missing out on additional tax revenue because companies are keeping their foreign profits foreign. If they lowered the rate of repatriating the money, the US government would have MORE tax income and companies could bring their money home at a lower, more fair rate than today. It’s actually a win-win for everyone: US revenues would go up, companies would pay lower percentages on their foreign income and they would have capital at home to use (and return to shareholders, btw).

        1. Not quite. US corporations “access” the “trapped cash” by borrowing against it, using the money for investment or to pay dividends, and getting an interest deduction in the process. Apple did this with its overseas cash.

          Speaking as a tax attorney with a specialization in cross-border tax, the comments made on this blog about the tax burden as simplistic and sophistic. You need to look at the overall tax burden. The NY Times published a good article about a recent study done by a USC professor. See attached link.

          1. “US corporations “access” the “trapped cash” by borrowing against it,…”

            In other words, US Corporations are willing to pay a “tax” to banks (or other bond holders) to access their overseas cash.

            If Apple could bring back the cash without tax consequences like most other countries allow, they could bring it in at no cost and distribute it or reinvest it in the US economy.

            If there was a US tax, but it was competitive with the loan interest expense they are paying now, then companies would skip the borrowing-against-cash, which creates its own problems long term, and just pay the tax.

            Either way, the problem is the US system of bringing in funds from other counties is nowhere near competitive with international norms. Large corporations optimize their behavior at the international level, no matter where their headquarters are, so this lack of competitiveness can only cause loss of opportunity for the US.

          2. I’m not a tax expert by any means, but I read that article, and have some problems with what he’s saying. Maybe you can clarify…

            My understanding of the situation is that profits made abroad are taxed in the country where the profit is earned. To just straight up bring the cash into the US, a company would pay our tax rate minus the tax rate of the country where it was already taxed.

            So if a company made $X Billion in Britain where the tax rate is 21% and they bring that cash into the the US where the tax rate is 35%, they have to pay 14%.

            However, the author’s claim is that the “real” tax rate in the US is 12.6%. If that’s the case, then it shouldn’t be an issue to bring the cash in from Britain or for that matter the average OECD country where the tax rate is 24.1%.

            It seems to me that the is 35% a disincentive to bringing the cash back to the US. The tax breaks that bring down the 35% to an effective 12.6% don’t apply to offshore profits.

            So what we need to do is either have the repatriation rate match the effective rate, or lower the tax rate from 35% while plugging up the things that make the effective rate so much lower.

      2. If you lower corporate tax rates, you lower the cost of doing business which lowers the price of goods and services, thus increasing the buying power of consumers.

      3. Bluemeansgo; the real issue here is why do we have a government that has become so large it is strangling the overall economy by taking virtually half of all earnings in local, state and federal fees and taxes?

        The situation is even worse (catastrophic according to some people) in that the promises issued by government for future payments are impossible to keep. That means essentially a currency value collapse with huge inflation which kills the value of savings.

        Reality always catches up to government folly and then the citizens pay the price.

      4. “Lower corporate taxes and you raise personal taxes…” So called corporate taxes are the economic equivalent of a straw man. They don’t exist. Where do you think those corporate taxes come from? They come out of employee paychecks and out if stockholder dividends. This is why you hear so many rightly claiming their money is being taxed twice.

        And don’t even get me started on the U.S. taxing overseas profits. Total idiocy.

      5. No, higher corporate taxes are not inversely related to lower personal income taxes in America.

        A tax is a tax, no matter who pays it. I know many people who pay almost 50% in combined state & income tax, well beyond what corporate taxes are. They aren’t rich or poor enough to pay lower taxes.

      6. There is no practical difference between corporate and personal taxes, except for the dummies who think that corporate taxes are not paid by the consumer in higher prices, and are thus “hidden” taxes on you and me, taxes which are difficult to track and therefore for which legislators are not generally held responsible by the voters.

        In other words, if you think that raising corporate taxes means that you really pay less in taxes (both overt and covert), then you are part of the problem.

      7. “You can’t have it both ways.”

        Sure you can: Decrease expenses. In this case, decrease the need for those taxes. Which probably translates into having the government do less for it’s citizens.

      1. Do you not recognize the difference in America’s position in the world economy the past 50 years?

        Why not just go back another 100 years and rationalize slavery?

    1. Everything is subject to arbitrage, wages for workers as well as national taxes. I’ve always seen the American economy as a somewhat closed system in which all parts interconnected. Companies made products in America, employing American workers, who were paid enough to afford the products they were making. ( Henry Fords idea)

      These “inversions” represent a lack of national fealty and an abundance of greed. I think the Harvard Business School needs to add “The Goose That Laid the Golden Egg” to its curriculum. It also needs to teach that planning horizons can extend beyond the next quarter, indeed, even beyond the tenure of the current CEO.

      1. Greed is subjective. If you take half my income yearly in taxes, am I greedy for thinking it wrong that I work essentially half the year as a slave to the government, or the people if you like. Is it really greed if I believe that I can better use my money as a corporation than the government can? The horrendous misuse of the economic output of the American people by the people’s government constitutes a greater lack of national fealty than “greed” from my perspective.

        1. Taxes are the fees we pay to buy civilization. You’re not a slave when you are getting roads, an educated populace, a court system, military defense (don’t get me started on profiteering wars, though), and so much more.
          There’s a reason those companies were founded and grew in the U.S. instead of somewhere else, but we’ve decided over the last 30-40 years to destroy those reasons by gutting our education system, allowing our infrastructure to decay, and piss away international goodwill by acting like bullies. Why? So we could loot the country and hand over the wealth to a tiny group of plutocrats.

          1. We have an educated populace? Could have fooled me. Oh yea, we also have a railroad system and a post office. Both rely on tax subsidies because they are outdated (and corruption).

            In Government We Trust.

            1. Only passenger rail relies on government subsidies. In a truly free market, it would be allowed to fail and disappear. But that doesn’t provide for graft, so the government keeps it alive.
              Our government promotes inefficiency. That is why most of it should be dismantled.

            2. @hoffbegone: You could try reading my whole post – it was pretty succinct. Here’s the relevant part you ignored: “we’ve decided over the last 30-40 years to destroy those reasons by gutting our education system…”

              So, I pointed out that our problems in not having an “educated populace” are due to people like you who think that a system of corporate-anarchism would take care of us human beings. Naive.

            3. With all the posts and replies things can get confusing here in the forums, so I’m just going to ask:

              Are you saying that corporations are supposed to take care of us human beings?

            4. @jt016:
              Nope. The opposite. I was saying that the current fad of so-called “libertarians” in the U.S. are essentially corporation-anarchists. In other words, corporations get to follow anarchist principles while the human beings get to live under the thumb (boot) of the government they control. I was saying it was naive to think that completely unleashing corporations would somehow help human beings other than the richest tiny minority. Yet that what’s so many people seem to think would be a good idea. I can only assume that they think they are so smart they would be one of that tiny elite PLUS being so selfish they are OK with a de facto stripping away of everyone else’s rights. Remember, if someone can take something away from you at their whim with no recourse, it isn’t really a right, it’s just a kindness on their part when they let you have it.
              The U.S. libertarians that want to gut any government program usually also seem interested in allowing corporations to do whatever they want. In other words, trade a big government that is theoretically under democratic control for a bunch of powerful corporations that most certainly are not.

          2. “There’s a reason those companies were founded and grew in the U.S. instead of somewhere else…”
            It wasn’t big government or high taxes that enabled this. It was the protected right of people to own private property and work with free enterprise. It only takes a small government to guarantee these rights.

    2. For decades the U.S. used to lampoon Europe and Canada for creating unfriendly business environments with high taxes and crazy regulations. But over the years they recognized this as a problem for sustaining employment and have improved taxes and regulation significantly. The U.S. appears to have gone the other direction.

      While the Tea Party certainly has more than it’s share of loons, what the left should not forget is that it has gained such strong traction with the U.S. public because our overall tax levels are unprecedented. And it is frightening a lot of people.

      Apple appears to be very much wedded to Cupertino and California at the moment. But how long will it last?

      1. Since 1950, the US effective corporate tax rate has declined from 50% to 20%. Since 1950, individual tax rates have declined by: top rate from 70% to 40%, bottom rate from 20% to about 18% (these are for married, filling jointly). The curves are not flat, but the general trends are obvious to anyone looking a a graph. Overall taxes have been *going down* for the past 60 years.

        “Overall tax levels are unprecedented” is a talking point that has gained traction through deliberate misinformation and manipulation of data.

        1. And part of the manipulation of that data, Jim, is what “effective” tax rate means. While individual tax rates have gone down, so have the number of deductions and credits available to the individual, as well as to the business.

          One must also take into account the deficit; SOMEONE is going to have to pay back that money eventually.

          The bottom line is that government spending keeps going up, and with it government control of our daily lives.

        2. And let’s don’t forget the population explosion of the USA. There’s more people (and more jobs!) to cover more of the taxes. While the increased populace does cause more wear and tear on the infrastructure, it should have been covered by the additional populace now paying taxes. However, since nearly 50% of the USA do not pay any tax, the freeloaders (taking not participating) our country’s tax revenues are causing our deficit issues.

          1. Maybe not income tax, but what about :
            #1 Air Transportation Taxes
            #2 Biodiesel Fuel Taxes
            #3 Building Permit Taxes
            #4 Business Registration Fees
            #5 Capital Gains Taxes
            #6 Cigarette Taxes
            #7 Court Fines (indirect taxes)
            #8 Disposal Fees
            #9 Dog License Taxes
            #10 Drivers License Fees (another form of taxation)
            #11 Employer Health Insurance Mandate Tax
            #12 Employer Medicare Taxes
            #13 Employer Social Security Taxes
            #14 Environmental Fees
            #15 Estate Taxes
            #16 Excise Taxes On Comprehensive Health Insurance Plans
            #17 Federal Corporate Taxes
            #19 Federal Unemployment Taxes
            #20 Fishing License Taxes
            #21 Flush Taxes (yes, this actually exists in some areas)
            #22 Food And Beverage License Fees
            #23 Franchise Business Taxes
            #24 Garbage Taxes
            #25 Gasoline Taxes
            #26 Gift Taxes
            #27 Gun Ownership Permits
            #28 Hazardous Material Disposal Fees
            #29 Highway Access Fees
            #30 Hotel Taxes (these are becoming quite large in some areas)
            #31 Hunting License Taxes
            #32 Import Taxes
            #33 Individual Health Insurance Mandate Taxes
            #34 Inheritance Taxes
            #35 Insect Control Hazardous Materials Licenses
            #36 Inspection Fees
            #37 Insurance Premium Taxes
            #38 Interstate User Diesel Fuel Taxes
            #39 Inventory Taxes
            #40 IRA Early Withdrawal Taxes
            #41 IRS Interest Charges (tax on top of tax)
            #42 IRS Penalties (tax on top of tax)
            #43 Library Taxes
            #44 License Plate Fees
            #45 Liquor Taxes
            #46 Local Corporate Taxes
            #47 Local Income Taxes
            #48 Local School Taxes
            #49 Local Unemployment Taxes
            #50 Luxury Taxes
            #51 Marriage License Taxes
            #52 Medicare Taxes
            #53 Medicare Tax Surcharge On High Earning Americans Under Obamacare
            #54 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)
            #55 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income)
            #56 Parking Meters
            #57 Passport Fees
            #58 Professional Licenses And Fees (another form of taxation)
            #59 Property Taxes
            #60 Real Estate Taxes
            #61 Recreational Vehicle Taxes
            #62 Registration Fees For New Businesses
            #63 Toll Booth Taxes
            #64 Sales Taxes
            #65 Self-Employment Taxes
            #66 Sewer & Water Taxes
            #67 School Taxes
            #68 Septic Permit Taxes
            #69 Service Charge Taxes
            #70 Social Security Taxes
            #71 Special Assessments For Road Repairs Or Construction
            #72 Sports Stadium Taxes
            #73 State Corporate Taxes
            #74 State Income Taxes
            #75 State Park Entrance Fees
            #76 State Unemployment Taxes (SUTA)
            #77 Tanning Taxes (a new Obamacare tax on tanning services)
            #78 Telephone 911 Service Taxes
            #79 Telephone Federal Excise Taxes
            #80 Telephone Federal Universal Service Fee Taxes
            #81 Telephone Minimum Usage Surcharge Taxes
            #82 Telephone State And Local Taxes
            #83 Telephone Universal Access Taxes
            #84 The Alternative Minimum Tax
            #85 Tire Recycling Fees
            #86 Tire Taxes
            #87 Tolls (another form of taxation)
            #88 Traffic Fines (indirect taxation)
            #89 Use Taxes (Out of state purchases, etc.)
            #90 Utility Taxes
            #91 Vehicle Registration Taxes
            #92 Waste Management Taxes
            #93 Water Rights Fees
            #94 Watercraft Registration & Licensing Fees
            #95 Well Permit Fees
            #96 Workers Compensation Taxes
            #97 Zoning Permit Fees

  2. Here’s a concept – how about a tax system that’s fair, simple, offers tax-breaks and incentives designed to reward creating American jobs instead of exporting them overseas, and reduces the inequality that’s destabilizing the economy. And, any politician not pushing for a tax system like this doesn’t get votes no matter what party they are in.

  3. Sounds like lots of money huh, 1.5 trillion dollars sitting offshore.

    Well consider that the U.S. national debt is 17.7 trillion dollars increasing at about 2.38 billion per day. If we took all the money and assets all those companies have and just applied it to the over spending of the U.S. Government, it wouldn’t make a noticeable dent. Yet left to those companies it pays for jobs, as well as product and service development.

    Our yearly interest on outstanding debt is approximately $400 billion. That’s just interest owed to foreign powers and the American people. Left leaning economists justify it by essentially saying it will never be paid back. Big deal. It siphons off our tax dollars so that politicians say, raise the debt ceiling, and raise taxes so we can keep spending, and let’s get those evil corporations.

    I mean if Apple closed it’s doors and gave all their money to the government they couldn’t even pay half the interest on the national debt. If all off shore corporate accounts were given to the government, they’d pay the interest for 2, maybe 2.5 years. JUST THE INTEREST OWED!

    I’d rather see Apple using the money to acquire complimentary technologies and creating better products, services, and jobs. Same for all of the companies the Feds are after.

    I got an email not too long ago from “Nancy Pelosi” asking that I support her bill that provided for automatic raising of the debt ceiling. The bill, get this, is literally called something like “Pay our Bills” bill. According to Pelosi, or what she was trying to convince people of was that the reason the government can’t pay it’s bills is that we don’t want it going deeper in debt.

    I would like to sell that principle to those I owe money too. Just increase my credit car limits so that I can pay my bills. WTF Nancy?

    “… The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion…. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
    I therefore intend to oppose the effort to increase America’s debt limit.” – Barack Obama BEFORE he was POTUS

    The debt has increased by $7 trillion under his administration.

    Is it any wonder anyone with a dime is desperate to hide it from the Federal Money Eating Machine these days? And let’s not even get into how deeply disturbing the use of this money is when examined closely.

    1. Deeply disturbing the use of tax money — indeed.

      A friend from the neighborhood is now a U.S. Congressman in his second term.

      Over libations recently during August recess he told me of studies his committee is working on. The most glaring example was 26 different government agencies created to solve the same problem. And you know what? It never gets solved.

      I’ll stop there, otherwise I’ll end up writing a book …

      1. I worked for a Congressman in the mid-70’s. You’ll never find a more election-centric-more-important-than-issues hive of scum & villainy. We ARE doomed when the reelection thing is more important than doing the right thing.

        1. If there was a Balanced Budget Amendment then politicians would be scrambling to find balanced budgets that favored their voting block, instead of competing to spend the countries future.

          In other words, politicians will always optimize for reelection, but will do so with the resources they have. A balanced budget would take future unfunded resources away from politicians.

          This would not only avoid debt creation, but force politicians to responsibly face the real costs of wars, social programs, inefficient military/NASA supply chains, etc.

          But as long as we have a Balanced Budget Amendment, politicians of all parties are incentivized to spend however much of our future they can get away with. The result is tragically predictable.

    2. Interesting post, but here is a question:
      Banks create money out of thin air when they maintain reserves of about 10% on deposits. A Bank loans none into existence.
      When the US Treasury and the Federal Reserve- create money out of thin air , how is that really any different? It is all fiat money- paper or a digital file that says it is worth x value because a government says so.

      1. correct… The Creature From Jekyll Island continues its voracious rampage while Americans argue donkeys and elephants…”I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

    3. And GWB increased the debt by $6 trillion during his term.

      Remember that at least part of that debt is due to the Iraq and Afghanistan wars started by the previous administration while lowering taxes, with estimates of cost from $2 trillion to $6 trillion depending on source.

      To get out of those holes alone, the current administration had to withdraw from combat and raise taxes, but couldn’t possibly do either at the drop of a hat… for example, even if Obama had ordered combat ops to cease immediately and personnel/equipment return ASAP, the logistics of de-mobilizing and shipping equipment home would take more than a year.

      There are certain things where the buck stops with the current administration, like expanding NSA wiretaps or continuing Gitmo instead of ending them, but national debt is an inherited problem that is rarely the sole fault of any one administration.

      1. No he increased the debt by a little over 5 trillion in 8yrs not 6, while the current resident hasn’t even been in office for 6yrs and it’s well over 7 trillion. Also to note it’s congress that makes the budget and when was GW’s highest deficit spending? When the dems took over both houses of congress in 2007. I also recall in GW’s first term he was constantly criticized by the dems for not spending more on social programs. The current resident proposes a 4 trillion budget which almost no one in his party voted for and rightly so and as T-Mac rightly pointed out you could take all of Apples money and put them out of business and still not cover the over spending by the yahoo’s running Washington. The brain seizured Dumcy Pelosi has proposed no debt ceiling, I guess my credit card shouldn’t have any debt limit either and I guess I should just expect someone else to pay the bill when it comes do with that kind of complete asinine thinking. Washington has a spending problem, period.

        1. Other than the correction to GWB’s debt contribution, you didn’t actually disagree with any of my points. And I’m not disagreeing with yours that Washington has a spending problem, which it clearly does.

      2. Libtards always rely on fake “facts.” The GWB debt figure is wrong. Obama exacerbated the debt in an unprecedented way; it is not what he “inherited.” And Afghanistan is Obama’s “good war.” 75% of the American deaths there occurred under Obama. And Obama isn’t even committed to winning that war. He advertised his end dates from the beginning. He is sending Americans to their deaths in a war he doesn’t even want to win. Obama is a criminal.

        1. Had you left out the “libtards” nonsense I’d have been happy to agree that the source I looked at might’ve been wrong (and in fact did so before you even posted). Mistakes happen and search engines don’t always return the best results.

          But you had to go trolling for a response. At least “libtards” can own up to mistakes, unlike “contards” who never admit when they’ve been bested by facts.

    4. I typed the first line that you quoted into DuckDuckGo and it pulled up the article — a very interesting read, especially the change of heart quoted at the bottom! He apologizes for having the “limited” view of a senator when he made those remarks (chastising the then present administration) because now he sees it from the president’s perspective. So we elected a senator based on the views and opinions he had from the “limited” perspective available to him and now we’re supposed to go along for the ride as his major policies we elected him to enact are transmogrified into same-old-same-old policies due to enlightened perspective?

      I have no doubt that one of a hundred senators will go through rapid situational awareness retraining when taking the oval office job, but all that says to all of us, especially Obama supporters, is that being a senator does not provide a candidate with the experience they need to put forth opinions on the country that a presidential candidate is going to be elected for.

      The lesson to all of us living in democracies is that we should pretty much ignore the political debates when they involve someone who has never had chief executive experience. I’m not sure where that takes us, because we constitutionally can’t have experienced people in office for all that long, but maybe it says we need to be far more critical and skeptical of the campaign speeches, indexed to the candidates level of experience. No matter how well spoken a candidate is, if the work experience is limited, we must be far more critically skeptical of the slogans and campaign promises.

  4. No surprise here.

    Corporations following the letter of the law want to keep more of their hard earned money — same as any household.

    What is different today is the double whammy of high corporate tax rates combined with business weighing the costs of Obamacare, implementation pushed back after the 2014 mid-terms. Nice try to minimize the bloodbath that is coming.

    JFK and Reagan proved when you lower tax rates economic expansion results. Obviously, this is news to the clueless politicians in power …

      1. The expansion under Reagan was due to tax dollars flooding the D.C. coffers because of lower rates. In a later deal with the Democrats he agreed to increase spending with all that new found cash. The gravy train did not last forever …

      2. What causes deficits? Ummm, could it be spending more money than you are taking in?

        Fast forward to 2014. This is the O economic plan that he is not apologetic about increasing the national debt, unprecedented levels, like no one in history.

        So whatever folks think of Reagan economics is chicken s*it. Pales in comparison to the reality of 2014 and the historical rise of the national debt the last five years, poverty and anemic economic growth that only benefits the well to do …

  5. Amusing (I’m a Brit) to see the level of insularity from US comments. This is money made overseas: why should the US Govt have any greater claim to a share of the profits than the UK (or for that matter the Luxemburg or Irish Republic) governments. It’s actually the arrogant claim of the US to tax at US rates all US nationals (individuals or corporations) wherever they live and actually make their earnings that is out of step with the globalised economy. Protectionism (quiviran’s post) is not an answer for the US in this century: others can retaliate, and US corporations will increasingly flee the jurisdiction if they can no longer get the access they need to global markets. Remind me what share of Apple’s earnings are now generated outside the 50 states? Even before China kicks into the sales figures fully!


  6. Companies are not people so only people should pay taxes. Companies should pay consumption and usage tax to ensure they do not destroy the environment and the society they operate in so there is a future for tomorrow.

    People should also pay a simpler tax and just as importantly the government spending should be better managed and reduce their waste.

    Last but not least politicians should excuse themselves from all committees where they have a vested interest and should declare any interest post decision.

    1. Excuse me, but consumers of those companies’ products and services will STILL pick up those taxes. ALL taxes paid by corporations and businesses, no matter what type they are, are passed on to the consumer in higher prices. Only people pay taxes. You can pay them overtly or covertly, but they will come out of your pocket, one way or the other.

  7. It is in error that the stockholders and the employees pay the corporate tax. It is correct that corporations do not pay taxes. They are a rather inefficient method of taking money from their customers and giving it to the government taxing authorities. Ultimately the customers pay the taxes. Corporations spend a lot of time worrying about the tax consequences of corporate investment decisions rather than the non-tax reasons for making the investment.

    And the Brit is correct that the US, essentially alone in the world, taxes business transactions exclusively in foreign countries as if were earned in the US. BTW, they do that to individuals as well. That is patently unfair.

    The entitlement state has a voracious appetite for tax revenue. I paraphrase Margaret Thatcher: the problem with the entitlement state is that eventually you run out of some else’s money.

  8. 1- Burger King has been passed around like a $3 whore over the years and has previously been the subsidiary of a British firm, so let’s spare the red, white and blue rah-rah shit.
    2- Companies should pay a fair tax on the operations they have within that country, but not be milked like a dairy cow. Money earned in Germany should be taxed in Germany and nowhere else. etc. The same should be true for expatriate Americans who are also slammed on taxes, but we never hear their cause championed in the press.
    3- Every tax law and loophole that is used by corporate America was written by a politician or a group of politicians nominally elected by We The People. If the citizens think the law is jacked up- change the law.

    1. 1. Can’t speak to the first point, if only because I haven’t looked into Burger King.

      2. Complete and utter nonsense. Please explain the logic behind a company operating here–with a base elsewhere–not paying taxes in this country? It literally makes no sense at all. Will they be using infrastructure here, such as roads and bridges? American workers? Receiving any sort of benefit for building factories on American soil? Then they need to pay American taxes.

      3. Your third point is considerably more wrong-headed than your second. You know (or at least should know) very well that the person (which our ideologically driven Supreme Court codified into law, as far as corporations are concerned) with the money makes the laws, so if you’re somehow implying that Joe Sixpack has more legislative clout than an Apple, Google or Microsoft then you probably live in a state where cannabis has been made legal, because only a stoned person could reach such a conclusion.

      1. 1-Say I earn money on operations in Japan, Germany and the United States. Each country has a reasonable claim to tax the profits made within it’s borders, but should not expect money from earnings outside it’s borders. Otherwise the US should exert no claim on income from German operations and Germany should exert no claim on US operations.
        2-Our tax code is not the product of one person, one party or one Congress. The jumbled mess is a long term project in graft, pay to play, scratch my palm and other forms of corruption.
        3-Our tax code is complex by design and many politicians make a lot of hay by writing exceptions or waivers into the code, Few politicians of either party have any interest in simplification of the code and their only disagreement is how it should be skewed.

        1. 1. I see what you’re saying, but that’s actually not what’s happening. If a company based in the US quite deliberately creates a subsidiary in a place like Ireland with no other purpose than to avoid paying taxes on their US earnings what they have done is create a subsidiary in name only.

          In other words, it’s a legal construct designed to avoid paying taxes, and should be treated accordingly by the government.

          2. Indeed. But what you appear to be leaving out (deliberately, I assume) that the palms being scratched are of corporations, who are corrupting the process on one man, one vote. And let’s be honest, the average working person has more than enough to deal with making a living when a company can fire them literally at any time, with no reason at all. to worry about corporate influence in government.

          3. True, which goes back to the democratic process in this country being little more than a facade for monied interests to do anything to maintain their influence (which, now that I think about it, has been the way the country has been since its creation, to varying degrees).

    2. As to point number 2, everyone who assails worldwide taxation should understand foreign tax credits, and how the offset US income tax by the amount of foreign taxes paid. It’s also very easy, through intercompany transfer pricing, to artificially shift income from a high-tax jurisdiction to a low-tax jurisdiction, which is one of the purposes of a worldwide tax system.

      Having said that, there are other merits to a territorial tax based system, but it’s not as black-and-white as you pretend.

      I don’t normally use the phrase “take it from me,” but I am a tax lawyer.

      1. Not a lawyer, but the argument of the tax and spend crowd is always that companies and individuals profit from services and conditions made possible by government (Roads, waterways, airports, public education, etc) and government chartered entities (levee districts, TVA, etc.). True enough and all the more to justify localized taxation on multinationals, but I do not think that people or corporations should be tax serfs.

        My preference would be that an American living in Spain (full time resident- employed) should pay taxes to Spain on income derived in that country and only owe US taxes on income derived from property and other sources located within the United States. Same thing for corporations.

        It still puzzles me how we always hear about the poor, poor corporations but never about the small fry expat that gets killed on taxes.

        1. You make good points, but there are arguments on both sides. Here’s a question (not presupposing any answer). I assume we can all agree that, as a US citizen living or visiting overseas, gives us benefits no other citizens have. The US has military capability worldwide, and when a crisis comes (being rescued from the rooftops in South Vietnam or from terrorists groups), I’m damn glad to be American. (We even tried to rescue James Foley before his execution.) We also benefit from legal assistance provided to us by our US embassies overseas, and enjoy the benefit of holding the world’s reserves currency in our wallets or purses accepted almost anywhere in the world. And on and on. Should a US citizen working or living overseas not pay for these benefits?

          Again, not taking a side, just playing devil’s advocate here.

          1. No, they should not.

            If they are working in the US or working directly for a corporate entity outside the US then perhaps they should pay, but if I’m an American who works at an Apple store in Sydney, I should not be paying US taxes in addition to Australian taxes.

            Make sense?

            1. You’re missing some facts. First, the first $100,000 of foreign-source income is exempt from US tax. Second, a taxpayer gets a foreign tax credit for every dollar of tax paid to a foreign government on foreign-source income. The result is that if the foreign tax rate is higher, the foreign tax credit leaves you with $0 US tax liability. (If the foreign tax rate is lower, then the tax differential above US$ 100,000 in foreign-source income is subject to US tax.)

              As for not paying for the benefits of being a US citizen overseas, if you work in Sydney and take a vacation to Bali when its overrun by Indonesian affiliates of Al Quaida, why shouldn’t you pay for the US military to come rescue you? Stated differently, why should US taxpayers living and working solely in the US pay for the benefits you receive as a US citizen overseas?

              It’s the classic problem of government: everyone wants benefits from the government, but no one wants to pay for them.

            2. Point is, I should not have to go through an exercise to prove I don’t owe taxes to my home country while working outside said country.

              I know you guys love paperwork, but come on. If I’m making $108,000 at my Apple Store job, you would have me doing paperwork in triplicate for everyone and having me pay too. And I am not benefitting from anything, and am instead ‘giving where I’m living”, in Australia.

              Also, the US also has what are called allies that also protect US citizens off US soil. The Aussies will look after me if something bad goes down here in Sydney.

              Everyone is in it together, see?

          2. I am not a peacenik and served 8 years in the Army, but think we need to stop being the world’s policeman. George Washington, in his farewell letter, advised us against getting drawn into foreign intrigues and that sounds wise.

            For most of our history we left the rest of the world alone unless they gave us no choice (Barbary Pirates, etc) and then decided to extensively meddle in the affairs of other nations. That has included invasions, assassinations, organizing coups and other stuff we had no business doing.

            We truly can no longer afford this kind of thing and it has brought us far more sorrow than any benefit one could list. All of our meddling in the Middle East and SW Asia has done nothing to advance peace, establish justice or improve the security of our country.

            It should also be noted that one of the benefits of the American Empire is that your government can order you killed by drone strike without charge, a trial or a chance to disprove any accusation against you. Obama has killed a (US) teenager in Yemen visiting family who had committed no crime.

            I do not hate our country, but wish it would live as a neighbor and not an overlord.

  9. @MDN Care to illustrate how the corporate tax rate is too large? What you seem to be leaving out of the equation is that corporations are greedy–and considering how many loopholes are built in to the tax code, there are quite a few that pay little in the way of taxes at all–and what companies like Burger King are doing has less to do with a onerous tax rate than the fact that ANY tax rate would be deemed too expensive for them.

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