Business Leaders Speak Out on (Obama) Tax Crackdown

[sabra]

Source: ABC News

Critics Say Obama's Offshore Tax Shelter Crackdown Will Hurt U.S. Businesses

Members of the business community today are starting to sound off in opposition to President Obama's new plan to crack down on offshore tax evasion, denouncing the initiative as a "foolish" program that would do more harm than good.

Critics argue the president's effort to raise taxes on the overseas profits of U.S. companies could damage U.S. multinational corporations.

"His proposals would put American corporations at a great disadvantage, which is a very foolish policy in a competitive global marketplace," said Dan Mitchell of the Cato Institute.

Announced earlier today, the Obama administration's two-part plan would remove tax deductions for companies that take jobs overseas and reduce the amount of taxes lost to overseas tax havens.

"If financial institutions won't cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly," Obama said in announcing the plan today in Washington, adding that the government will also hire 800 new IRS agents to enforce it.

Read more: http://abcnews.go.com/Business/Economy/story?id=7499323&page=1

[CJCRANE]

1. Reccing for Obama

not the business leaders.

[MarjorieG]

2. Tax havens a huge part of AIG London.

Financial istitutions may need to raise capital after the stress tests. Short of raising it on our backs, I don't know how. The admin keeps limiting their opportunistic options, albeit in a less agressive hand than shutting down and taking them over.

[MannyGoldstein]

3. Fantastic, Probably!

Unless Larry Summers is in charge. I'd expect that his scheme would be to pay the corporations to police themselves.

[cosmicone]

4. This will lead to massive inversions and would indeed hurt the US.

An inversion is where a US parent becomes a subsidiary of a foreign corporation so that the subsidiary pays taxes on income derived in the US.

If the parent companies are taxed on income earned entirely abroad, the companies will move their headquarters (and jobs associated with the HQ) to a foreign country and make the US operation a subsidiary.

This will result in a loss of hundreds of thousands of jobs especially at a time when other countries are soliciting US businesses with lucrative tax incentives. What if Microsoft, Oracle, Intel, HP, IBM etc. became headquartered in say Dubai?

[jaxx]

5. Is that saying we're better off letting them evade taxes?

[starroute]

7. So we should just keep letting them blackmail us?

It seems pretty clear from their reactions that the ultimate dream of these corporations is to never be taxed, be able to move capital and operations around the globe freely in search of profits and cheap labor, and to treat the US market for their goods as a captive audiences.

They haven't quite reached that ideal -- but any time anybody suggests reversing the direction of things, they start screaming and making threats to take their bat and go home.

The only effect I can see of giving into their threats time after time is that we get boiled slowly instead of quickly.

It might hurt US pride a bit, but we have to stop acting like the dominant economic power we no longer are and start behaving more like a rising economy. We have to protect domestic industries, encourage research and innovation only to the extent that the results go to benefit the US population as a whole, and threaten any corporation that doesn't play by our rules with the loss of its US markets.

The deeply impoverished Southern states like Alabama and Mississippi are currently falling all over themselves in the attempt to give corporations everything they want, including pre-guaranteed polluting rights -- but it doesn't seem to be doing them a lot of good. Standing up to the corporations instead would be a welcome change.

[cosmicone]

31. There is no blackmail. It is an issue of fairness.

See post #30

[Terry in Austin]

32. Fairness is where everybody pays their share, not dodge it

It's a loophole that's way past due being fixed.

[cosmicone]

34. It is not a loophole.

If a Chinese company operated a US subsidiary, its US derived income is taxed in the US but not in China. Same is true of British, French, Australian, German and other companies.

Taxing world-wide income is only a US phenomenon and it reduces our profitability in global markets. All the companies DO pay taxes on their income derived in the US. It is the income derived outside the US which is at issue.

[ChromeFoundry]

16. Then...

What if Microsoft, Oracle, Intel, HP, IBM etc. became headquartered in say Dubai?

...the U.S. government would embrace OpenSource technologies like they used to! The result would be a benefit to the world, like the space program was in the '60s and '70s.

[CHIMO]

20. So Let

Them make it a subsidiary.

If they are going to make their profits in the country then they have to pay tax on that profit.

It is really simple.

It well past time where corporations can be bigger than governments. Or better, it is well past the time where corporations can control the rules of the majority.

[cosmicone]

30. No one is opposing paying taxes in the US

What is unfair is for the US to tax income earned by a company's subsidiaries abroad. Whatever is earned in the US is already taxed and has no loophole. It is inherently unfair because only US headquartered companies would be paying taxes on income earned abroad but not Chinese/Japanese/Indian/European based companies.

[mbperrin]

38. Actually, most of them DON'T pay taxes here. GAO report:

GAO Reports Most American Corporations Pay No Tax

August 13, 2008 (AP)

Two-thirds of U.S. corporations paid no federal income taxes from 1998-2005, according to a new report from the nonpartisan Government Accounting Office. About 68 percent of foreign companies doing business in the U.S. also avoided corporate taxes during the same period. Collectively, the companies reported trillions of dollars in sales. More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies (66.7%) paid no income tax. About 25% of large U.S. corporations -- those with at least $250 million in assets or $50 million in receipts -- did not pay corporate taxes. The GAO analyzed data from the IRS, examining samples of corporate returns from 1998-2005. For 2005, it examined 110,003 tax returns from among more than 1.2 million corporations doing business inside the United States. Tax figures since 2006 were not examined.

http://forums.contracostatimes.com/topic/gao-reports-most-american-corporations-pay-no-tax

[mbperrin]

37. Let them go to Dubai.

Cultural wonderland! Their employees will be so happy. They can visit
Dubai Wild Wadi Water Park

The Wild Wadi is a water theme park suitable for all the family. Its modern, with a variety of activities and popular with locals and visitors. It is comparable to water parks in Orlando, Florida including the lengthy queues at peak times especially during weekends, school and public holidays.

It is nice to visit when on holiday especially as the weather is always warm and thus suitable for a visit to a water park. It is expensive and its not helped that local visitors are always privy to discounts that many people from overseas are not aware of.
http://www.tripadvisor.com/Travel-g295424-d320708/Dubai:United-Arab-Emirates:Wild.Wadi.Water.Park.html

Lots of Ramadan activities, too!

Yeah, if there are no advantages to being here, and if the infrastructure here is not worth paying for, then by all means, shove off!

Companies don't make markets, people do. And the people with money generally are still here, not there.

[HopeHoops]

6. What a SHOCK!

I expected all of the big business crooks to come out and say "Well, it is about TIME you made us stop cheating! We've hated doing it, but we HAD to!"

[happygoluckytoyou]

8. and their answer is -------------->

I wash born here, an I wash raished here, and dad gum it, I am gonna die here, an no sidewindin' bushwackin', hornswagglin' cracker croaker is gonna rouin me bishen cutter.

[mikeytherat]

28. Now who can argue with that?

Not only was it authentic Frontier gibberish...

mikey_the_rat

[louis-t]

9. And...it begins. "we can't compete, waaaaaah"

Puh-frickin'-lease.:eyes:

[Arkana]

10. Awwww...let's play them a song on the world's smallest violin.

[OhioChick]

11. Screw Them. n/t

[strategery blunder]

12. Maybe they should've thought about that BEFORE doing illegal shit.

Yaknow, there's always the chance that when illegal shit like tax evasion gets out of hand, the gubmint might start noticing.

These greedy fucks got too damn greedy for their own good, and the banking bailout shenanigans quickly got so fucking out of hand that both the government and the taxpayers COULDN'T HELP BUT notice.

So fuck them. If they would've just been content with the trillions in free money we gave them instead of expecting to shove it all where it'd never be seen again, it would not have been anywhere near as noticeable. But hey, why pay taxes on free money falling out of the sky when you can try to hide it, right?

Something about biting the hand that feeds you comes to mind...

[underpants]

19. or they might not have built a business model that depends on tax avoidance

but then that is just me

[twitomy]

24. News Flash

These corps arent doing anything "illegal"...

[McCamy Taylor]

13. Go Obama! Businesses that evade taxes are criminal enterprises no different from the mob.

[Vidar]

14. Toss a few hundred of them in jail.

[Skittles]

21. YES

those crime stats would change quite a bit if all white-collared business suit-wearing crooks and thieves got their due

[ChromeFoundry]

15. Well....

Critics Say Obama's Offshore Tax Shelter Crackdown Will Hurt U.S. Businesses

they have been hurting U.S. citizens for decades...Fuck 'em. Let them move their HQ offshore... then we will tariff the imports! Sounds like a win-win if you ask me. Anything else is a lose-lose for the citizens.

[twitomy]

25. Nothing like cutting your nose to spite your face...

Im not for offshoring by any stretch, nor am I thrilled about getting tax breaks for offshoring..But I am a "happy-balance" kind of guy and the anti-business attitude here is appalling...A poor guy never gave me a job. If Obama wants any hope of getting re-elected there better be some job creation soon. Not sure how encouraging companies to go offshore invert is
going to do that.

[mbperrin]

26. No rich guy ever gave me a job, either.

I have performed many jobs in a 45 year career for pay. In all cases, my value to the business enterprise was more than my pay, because I stayed employed until I decided to quit and move on.

Jobs flow from markets. Richest guy in the world opens a Coach store in Death Valley. It will close.

Most clueless slob in the world opens a sandwich shop downtown Manhattan, will most likely thrive. Why? People with money live there who want things and will pay for them, in this case, quick lunches to get back to the rat race.

Once the smothering blanket of predatory companies is thrown off, jobs will indeed form everywhere there are markets, that is, people with money wanting things. That's here, still, in the USA. Gonna be hard to make that snowcone stand in Somalia work, even though it's really really hot there.

Here is the best market in the world, and if someone wishes to abandon it, they are more than welcome to their lawful Darwinian outcome.

[twitomy]

27. Yes I basically agree with what your saying...

But realize it could be a double edge sword...If too many abandon, There wont be enough people with jobs in Manhatten to buy that sandwich...

Seems to me we need a Ying/Yang approach to capital and labor.. Capital seems to have had the better
of it for a long time, but swinging it out of balance the other way can be counter-productive as well.

[brentspeak]

17. MULTINATIONAL business leaders, that is

Small and mid-size businesses have been getting the raw-end of the stick for too long, thanks to the cozy tax advantages the multinationals receive.

[underpants]

18. Thank GOD they were allowed a voice

:sarcasm:

CNN (Wolf) lead this story not with the proposal from Obama but with the counter arguments. It was the epitome of the modern news industry.

[mbperrin]

22. In other news, serial killers claim that laws that make murder illegal

ruin their business.....

So?

[mbperrin]

23. Any actual void created by inversions or other abandonment of this

country will be speedily filled by domestic entrepreneurs. Let the welfare kings go! Sell those imported workers in Dubai a buncha shit.

Oh, wait, those imported workers have gone home! Oh noes!!!

Well, let 'em throw it in the ocean, then.

[Mari333]

29. PLEASE people!! write to your CONGRESSPERSONS

send them as MANY letters and emails as you can
make it a habit to do so everyday
already, multinationals have sent 200 letters to Obama admin wanting to stop the new tax laws that keep them from outsourcing and profitting off of slave labour..
so HERE! send emails, letters..tell Congress to back this up!! some of the dems are balking because they are deep in the pockets of the corporations...let them know HELL will occur if they dont back this

heres contact info to find your congresscritter
dont let the multinationals be the only ones heard...

http://www.visi.com/juan/congress/

[OhioChick]

33. I've been doing this for some time, Mari....everyone should write.

This should not be:

GAO: 83% of big U.S companies, contractors use offshore tax havens

The Government Accountability Office (GAO) has just issued a report showing that most of the nation's largest public companies and government contractors rely on offshore subsidiaries to do business and cut their tax bills. Some of these same firms — including big banks and insurers — have already received tens of billions in taxpayer money from the federal bailout fund.

Citigroup, Bank of America, Morgan Stanley, American International Group, American Express have set up hundreds of tax-haven subsidiaries, the report states. All have taken billions from the bailout fund. Pepsi and Caterpillar, both of which have received billions in tax dollars from being major government contractors, also shelter revenue in offshore subsidiaries, The Washington Post says.

There's a big "but," however: It's legal under the U.S. tax code.

Also, as the Post notes, GAO auditors did not review the companies' transactions to independently verify that the subsidiaries helped the companies reduce their tax burden. The GAO said only that the companies had subsidiaries located in jurisdictions considered tax havens and that historically the purpose of those subsidiaries is to cut tax costs.

More: http://blogs.usatoday.com/ondeadline/2009/01/gao-most-big-us.html

[Name removed]

35. Deleted message

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[WriteDown]

36. Good its about time that Apple paid their fair share...

Companies like Apple that manufacture in China will take huge losses due to this. Get ready for that 600$ ipod to hit stores soon. :shrug:

I don't think people have enough knowledge of this issue.