Anarchism, communism (and now tea party republicans) all share the delusional fantasy of a world where strong central government does not exist, because everything magically works on its own without it.
Talk about a delusional fantasy. Communism has only ever existed solely through the strong arm of the government.
The millionaire host really doesn't want to pay more than 50% and then pulls the old 'what about my poor 6 kids' private tuition' routine. The millionaire hosts made their money doing what they're doing in the clip - they make their money arguing about why they shouldn't pay more tax.
The point they made about it not making a difference only works if it's applied to everything. Don't tax this portion here because it's only 10% of government spending, don't tax that portion there because it's only 5%. If it was all taxed at a reasonable rate then it would make a difference.
The main area of contention seems to always be paying for things they don't agree with. Maybe the government needs to make something like an Amazon wishlist of things they'd like to fund and if wealthy people agree to fund them then they qualify for a better tax rate. Companies are always saying things to the effect that if they get better rates they'll hire more people or invest in infrastructure but they lie about it as the stats show, lower tax rates haven't resulted in higher economic growth. Apple presumably wants to save about $20-30b on repatriation tax but rather than just saving it, why don't they commit to a plan to invest it like using it to build the best networking infrastructure in the world from which they'd profit? They'd make $50/m from at least 30m subscribers ($1.5b revenue per month). If they committed to that then they'd deserve the tax cut because they'd be employing hundreds of thousands of people and boosting the entire country's infrastructure but not if they just ask for it and give nothing in return.
The wishlist setup wouldn't mean they'd only fund these causes but it would mean that they'd be assured the bulk of their tax was going to something they were happy with. It might seem unfair to lower income individuals not getting to choose what their tax money goes to but their individual contributions aren't significant enough to warrant that choice. When the choices run out then they have to just pay tax as normal but I could see it helping a lot of tax avoiders feel that their tax money is being used for something they promote.
The millionaire host really doesn't want to pay more than 50% and then pulls the old 'what about my poor 6 kids' private tuition' routine. The millionaire hosts made their money doing what they're doing in the clip - they make their money arguing about why they shouldn't pay more tax.
The point they made about it not making a difference only works if it's applied to everything. Don't tax this portion here because it's only 10% of government spending, don't tax that portion there because it's only 5%. If it was all taxed at a reasonable rate then it would make a difference.
The main area of contention seems to always be paying for things they don't agree with. Maybe the government needs to make something like an Amazon wishlist of things they'd like to fund and if wealthy people agree to fund them then they qualify for a better tax rate. Companies are always saying things to the effect that if they get better rates they'll hire more people or invest in infrastructure but they lie about it as the stats show, lower tax rates haven't resulted in higher economic growth. Apple presumably wants to save about $20-30b on repatriation tax but rather than just saving it, why don't they commit to a plan to invest it like using it to build the best networking infrastructure in the world from which they'd profit? They'd make $50/m from at least 30m subscribers ($1.5b revenue per month). If they committed to that then they'd deserve the tax cut because they'd be employing hundreds of thousands of people and boosting the entire country's infrastructure but not if they just ask for it and give nothing in return.
The wishlist setup wouldn't mean they'd only fund these causes but it would mean that they'd be assured the bulk of their tax was going to something they were happy with. It might seem unfair to lower income individuals not getting to choose what their tax money goes to but their individual contributions aren't significant enough to warrant that choice. When the choices run out then they have to just pay tax as normal but I could see it helping a lot of tax avoiders feel that their tax money is being used for something they promote.
LOL! Complete nonsense. Any person who feels compelled to pay more taxes is certainly free to do so. In fact, I dare them to throw their money away. They won't be millionaires for long. Just don't force others to support their pretzel logic.
The main area of contention seems to always be paying for things they don't agree with.
Exactly!
As to your point of the internet infrastructure, Apple will do that regardless, if it makes economic and strategic sense to do so. If it only makes economic or strategic sense to do so because of government tinkering with the financial aspect, then it is essentially a government subsidy.
As to your point about every company digging up the road to lay fibre, that's not realistic either. If it made economic sense to do so, why would you care, and if it didn't make economic sense to do so (much more likely), then companies would form strategic partnerships to get that done.
Any person who feels compelled to pay more taxes is certainly free to do so. They won't be millionaires for long.
If you're already a millionaire, paying a higher tax rate won't undo that. Taxes come off earnings, not current possessions. High tax rates on the rich just slow the rate at which they increase their possessions.
The main area of contention seems to always be paying for things they don't agree with.
Exactly!
Right but things outside your own area of interest have to be paid for. For example, you might pay for school buses but don't have kids. If you choose to have kids then you'd benefit from it because having kids costs a lot. You might contribute to someone's education now and they might end up being your employee or employer years later.
As to your point of the internet infrastructure, Apple will do that regardless, if it makes economic and strategic sense to do so.
That's not good enough. They've benefitted from having a healthy, prosperous, safe environment in which to conduct their business and they have a responsibility to reinvest in that infrastructure. That's how it works. People seem to think that developed Western countries are owed nothing in taxes and their own success is all down to their good ideas and it just so happens that their customers are well enough off to be able to pay for their products. Just because people ignore the process by which a civilized society comes about doesn't mean that it came for free and that it shouldn't be funded. There's a billionaire who shares a lot of the same interests as the anti-tax people:
"In 2005, Mark Cuban gave an interview to Slate in which he shared his literary love for “The Fountainhead,” a book by the libertarian philosopher Ayn Rand.
“I loved it. I don’t know how many times I have read it, but it got to the point where I had to stop because I would get too fired up.”"
and even he says paying taxes is the right thing to do:
“Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write,” Cuban wrote. “Your second thought will be “what a great problem to have,” and your third should be a recognition that in paying your taxes, you are helping to support millions of Americans that are not as fortunate as you.”
In the audio clip in the 2nd link, he says that he'd like more transparency in what the government does because he'd like them to put up projects that need to be done and he says he could get a lot of them done more efficiently. The government does this all the time though with private contractors and what do the contractors do? They see it's public money, which nobody is accountable for and bill way more than usual. The healthcare, military, and finance industries are doing this and nobody is blaming them for the excessive spending. They are selling essential services so the government can't say no to it and the government gets blamed for the cost. Blame the private sellers who are taking taxpayer money and not paying their taxes.
As to your point about every company digging up the road to lay fibre, that's not realistic either. If it made economic sense to do so, why would you care, and if it didn't make economic sense to do so (much more likely), then companies would form strategic partnerships to get that done.
That hasn't happened though. It doesn't make economic sense to dig up every road and companies aren't sharing their infrastructure, which creates a free-market-formed monopoly.
If you're already a millionaire, paying a higher tax rate won't undo that. Taxes come off earnings, not current possessions. High tax rates on the rich just slow the rate at which they increase their possessions.
Right but things outside your own area of interest have to be paid for. For example, you might pay for school buses but don't have kids. If you choose to have kids then you'd benefit from it because having kids costs a lot. You might contribute to someone's education now and they might end up being your employee or employer years later.
That's not good enough. They've benefitted from having a healthy, prosperous, safe environment in which to conduct their business and they have a responsibility to reinvest in that infrastructure. That's how it works. People seem to think that developed Western countries are owed nothing in taxes and their own success is all down to their good ideas and it just so happens that their customers are well enough off to be able to pay for their products. Just because people ignore the process by which a civilized society comes about doesn't mean that it came for free and that it shouldn't be funded. There's a billionaire who shares a lot of the same interests as the anti-tax people:
"In 2005, Mark Cuban gave an interview to Slate in which he shared his literary love for “The Fountainhead,” a book by the libertarian philosopher Ayn Rand.
“I loved it. I don’t know how many times I have read it, but it got to the point where I had to stop because I would get too fired up.”"
and even he says paying taxes is the right thing to do:
“Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write,” Cuban wrote. “Your second thought will be “what a great problem to have,” and your third should be a recognition that in paying your taxes, you are helping to support millions of Americans that are not as fortunate as you.”
In the audio clip in the 2nd link, he says that he'd like more transparency in what the government does because he'd like them to put up projects that need to be done and he says he could get a lot of them done more efficiently. The government does this all the time though with private contractors and what do the contractors do? They see it's public money, which nobody is accountable for and bill way more than usual. The healthcare, military, and finance industries are doing this and nobody is blaming them for the excessive spending. They are selling essential services so the government can't say no to it and the government gets blamed for the cost. Blame the private sellers who are taking taxpayer money and not paying their taxes.
That hasn't happened though. It doesn't make economic sense to dig up every road and companies aren't sharing their infrastructure, which creates a free-market-formed monopoly.
They're going to have to be forced to share their existing infrastructure to resolve it or rebuild it as a public utility.
It should be fairly common knowledge by now that even if the US government confiscated every single dollar of every millionaire and billionaire in the US, it would barely put a dent in the crushingly large debt that has accumulated. The problem is spending, not tax collection.
Also, Mark Cuban isn't a Libertarian or an Objectivist as far as I can tell (those aren't the same thing, by the way). He's just a canny businessman. His positions on Net Neutrality and taxation indicate he says one thing, but practices another. No self-respecting Objectivist would demand greater intrusion by government.
Obama's fixing of the loophole of overseas profits is now going to see those who argued that Apple and other companies that were 'just doing what they legally could' suddenly find some other line of argument now, I suspect.
Quote:
US President Barack Obama plans to close a tax loophole that allows US firms to avoid paying taxes on overseas profits, the White House says.
His 2016 budget will impose a one-off 14% tax on US profits stashed overseas, as well as a 19% tax on any future profits as they are earned.
The $238bn (£158bn) raised will be used to fund road projects in the US.
Obama's fixing of the loophole of overseas profits is now going to see those who argued that Apple and other companies that were 'just doing what they legally could' suddenly find some other line of argument now, I suspect.
Nothing Obama proposes at this point is going anywhere. He's a lame duck and he can make any pie-in-the-sky proposal he wants. He knows better, but by floating these impossible ideas it gives him "ammunition" to use against those darn "obstructionist Republicans". He's a snake, that's for sure.
---Go Seahawks!--- (I'd rather see the Broncos there, but that didn't quite pan out)
Obama's fixing of the loophole of overseas profits is now going to see those who argued that Apple and other companies that were 'just doing what they legally could' suddenly find some other line of argument now, I suspect.
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
Nothing is ever clear with politicians they are the lowest form of life on this planet and even attributing life to them is generous. If I had my way anyone who wants to go into politics would not be allowed to.
It should be fairly common knowledge by now that even if the US government confiscated every single dollar of every millionaire and billionaire in the US, it would barely put a dent in the crushingly large debt that has accumulated. The problem is spending, not tax collection.
The federal reserve says total owned assets are $80.7t:
Debt is $17t = 21%. We're not talking about taking owned assets though, that's what people say to make it sound as though the government wants to turn rich people into poor people i.e punish success. Rich people are already rich, higher tax rates just slow their wealth growth rate.
I suspect the debt will always go up anyway because it's not a fixed measure remember, you have to adjust for inflation:
They try and twist the numbers by removing some of the expenditures on page 2 but you can reach any conclusion if you take data out of the consideration. Some people argue that having debt is good:
It shouldn't be too much but how much is too much? What they should really do is give a measure of acceptable deficits and unsafe so there's a target. Clearly 0 is not the target.
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas.
Doubt it and it's not as simple as that. Apple is founded in the US, they'll always be a US company and they'll always be due tax there. It's not like they can register a subsidiary to do it and they can't just give their cash away to a separate company registered elsewhere because the shareholders would never allow that.
If it went ahead they could eliminate the repatriation tax. They wouldn't need to tax overseas income and then tax it to repatriate it. 14% and 19% are fair rates but they have to allow for some tax already being paid abroad. If a company already paid 25% then 19% on top is too high. If they've paid a country's full 25% rate, they should have a zero rate tax and repatriation. Most likely US companies will try to minimize tax abroad to say 10-15% and then return the remainder 10-15% to the US, leaving them with 75%.
If it went ahead they could eliminate the repatriation tax. They wouldn't need to tax overseas income and then tax it to repatriate it. 14% and 19% are fair rates but they have to allow for some tax already being paid abroad. If a company already paid 25% then 19% on top is too high. If they've paid a country's full 25% rate, they should have a zero rate tax and repatriation. Most likely US companies will try to minimize tax abroad to say 10-15% and then return the remainder 10-15% to the US, leaving them with 75%.
They already do that via foreign tax credits. That's why I refer to the 35% number as clueless nonsense. I would point out that part of the reason for the gap in wealth isn't the rich paying taxes on income. Some taxes actually shake out in weird ways, but toward the top most of their money is made by appreciation of assets. With things such as real estate, it can be taxed as income if they sell something within two years. If they sit on it long enough, it's taxed as capital gains, even though speculative purchases are basically income. That kind of ridiculous behavior is essentially enabled by inflationary policy though. I mean even if they're taxed a bit more on it, the problem of an extreme division in purchasing power remains.
The argument brought against a repatriation holiday is that the companies will use most if not all the money on buybacks and dividends and the amount that will be spent on things like hiring and factories will be minuscule in comparison.
Stock buybacks and dividends are shareholder distributions. The guiding principle for shareholder distributions is to do what is in the best interests of shareholders. If a company can generate a better return hanging on to the cash than a shareholder could with a dividend/buyback, then the company should hang on to the cash. A company does a stock buyback if it believes that the stock is undervalued. This assessment is not going to change just because a company all of a sudden has a bunch of cash on hand. The same goes for dividends. Just because bring their cash into the US due to a repatriation tax holiday does not automatically imply that all of it will be spent on dividends/buybacks. Given where the market is, I don't know if that many companies are going to do stock buybacks.
Also, it seems that the shareholder class is considered synonymous with the 1%. I don't think this is an accurate classification. Mutual funds and institutional investors count as shareholders. Many middle-class Americans have retirement accounts that invest in these mutual funds. As a result, a shareholder distribution isn't just for the 1%.
Corporations are holding $2 trillion in overseas profits. That's $2 trillion unavailable to spend in the United States. If Congress were to pass a repatriation tax holiday, $2 trillion could come into the United States. The fact that $2 trillion is now available to spend in the US ought count for at least something.
Corporations are holding $2 trillion in overseas profits. That's $2 trillion unavailable to spend in the United States. If Congress were to pass a repatriation tax holiday, $2 trillion could come into the United States. The fact that $2 trillion is now available to spend in the US ought count for at least something.
That has been contested many times. The argument for a repatriation holiday was typically based around lobbying where the largest corporations claimed that funds were tied up, which might otherwise be used to build infrastructure. This is not typically the case, as smaller businesses that are more likely to have that kind of problem are less likely to be able to afford such elaborate accounting. Money doesn't have to be held in another country though. It merely has to be held by a non-US subsidiary. I don't personally have an issue with changes to broader tax laws, but tax holidays thus far have always been stupid and justified by misinformation.
Given where the market is, I don't know if that many companies are going to do stock buybacks.
Just leaving the cash dormant is worse for the economy but ideally it would be spent on growth opportunities for the company. Depleting it for shareholders doesn't give the company any return. Unlike an employee, shareholders don't do anything to create value.
it seems that the shareholder class is considered synonymous with the 1%. I don't think this is an accurate classification. Mutual funds and institutional investors count as shareholders. Many middle-class Americans have retirement accounts that invest in these mutual funds. As a result, a shareholder distribution isn't just for the 1%.
I don't really think that people are always aware their retirement funds are being invested given their surprise when they find out they became worthless, not to mention the fund managers tend to make far more than the people they invest for. Workers also don't make huge returns that way because they are only investing a fraction of their salary and the funds are for security not growth. The big returns come from private equity and venture capital. It's rare for a public company to make 20x ROI in a couple of years:
"Google just bought Nest for $3.2 billion cash, and that means the startup’s early investors Kleiner Perkins Caufield Byers and Shasta Ventures have struck it rich. Multiple sources say Kleiner invested $20 million in Nest and got a 20X return to pull in $400 million."
"Accel Partners' $12.7 million investment in Facebook in 2005 gave the firm a 15% stake. Accel's stake (less Breyer's personal one) represents 190 million class Bshares, valued at over $9.0 billion."
"Russian Internet holding company, Digital Sky, grabbed 1.96% of Facebook stock in May of 2009 when it spent $200 million at a $10 billion valuation. Digital Sky, which is largely backed by a wealthy Russian oligarch, is the owner of Facebook clone VKontakte, the largest social network in Russia. Under the direction of Managing Partner, Yuri Milner (pictured), Digital Sky has also amassed sizeable positions in Zynga and Groupon, and is reportedly in talks to buy a substantial stake in Twitter. Their Facebook investment is worth $4.6b."
They use wealth to buy ownership of private companies relatively cheaply and then float them to the public for massive gains.
Public companies can make significant returns but people who work full-time jobs don't have the spare capital nor the time to invest. If a company like Apple makes 10x return then someone with $10k invested comes away with $90k profit minus tax, barely enough to by themselves a home but someone with $1m invested makes $9m minus tax, which would be enough to buy 25 homes they can rent out. Asset growth is higher when you already have more wealth.
Corporations are holding $2 trillion in overseas profits. That's $2 trillion unavailable to spend in the United States. If Congress were to pass a repatriation tax holiday, $2 trillion could come into the United States. The fact that $2 trillion is now available to spend in the US ought count for at least something.
You can say that about any tax though. Imagine if the 99% found a way to hide most of their taxable income, you wouldn't justify hundreds of millions of people getting tax breaks just because of all the potential revenue, it's revenue that is expected from them to be part of a functional society. A tax holiday is a special consideration that's reserved for the greedy people at the top who have the opportunity to hide their taxable income because for some reason they think that a millionaire paying $500k is more of a sacrifice than someone on $25k paying $5k. What are they sacrificing? They are left with over $500k so their quality of life can still be 25x better than the person on $25k.
I would point out that part of the reason for the gap in wealth isn't the rich paying taxes on income. Some taxes actually shake out in weird ways, but toward the top most of their money is made by appreciation of assets. With things such as real estate, it can be taxed as income if they sell something within two years. If they sit on it long enough, it's taxed as capital gains, even though speculative purchases are basically income. That kind of ridiculous behavior is essentially enabled by inflationary policy though. I mean even if they're taxed a bit more on it, the problem of an extreme division in purchasing power remains.
Asset growth is definitely the bigger issue, taxes just play a part in this. You can see this from employee vs employer and investor examples:
employee makes $25k, has a pension fund and is taxed, no shares
employer has 1,000 employees in a company making $100m revenue $25m net income, has say 51% shares
venture capitalist millionaire invested in company to fund it going public owned 49% shares
The 1,000 employees are the ones maintaining the company value yet the two people at the top there get 1000x more return from it than each of them and it's more when you consider than the employee takes on debt with interest to buy a property, car, education whereas the people at the top have no debt. When you compare disposable income, the ratio will go up to over 5,000x difference.
It all really just comes down to ownership. If someone declared that they owned all of the land in a country then in order to reside there, other people would have to reward the owner with work and production. We saw this happen in real-time with ISIS where they went from nothing to taking ownership of natural resources by force and becoming millionaires:
It's all about saying a resource or an idea belongs to someone and other people recognise that ownership and then exchange their own services or assets for a part of it. People don't like the question of how much should a person be allowed to own because it violates personal property rights but ownership comes about because of man-made systems. If someone seizes land by force in a lawless state then it doesn't really count as earned. If that's passed down to future generations then it's not earned either. If someone builds a company on a stolen idea (e.g Samsung) is that ownership to be respected?
The reason for the way it's setup is that if people are allocated property without earning it then they don't all feel they have to earn it. People are forced to be destitute, hungry and to go without by default to force them to contribute. However, that clearly isn't necessary. Some of the wealthiest people in the world started out wealthy or middle class, 80% in fact:
In the 2nd link they make the point that wealthy people like Mitt Romney call themselves self-made despite inheriting wealth and privilege. That's the case with Stuart Varney in the earlier clip talking about how he worked his way up but the position he's in now only exists because the billionaire running the show wants to hear what he has to say. He doesn't see any unearned privilege in being paid a 6 figure salary for sitting in front of a camera spouting offensive rhetoric all day long.
There's a TV documentary where they pull up the stark contrast between rich and poor families:
[VIDEO]
[VIDEO]
The way the children react is the most honest and around 3:30 in the 2nd video, you can see how people who are born into a more privileged upbringing don't realise what others have to live with. One of the episodes shows where a self-made millionaire thought that you could work your way out of anything:
"I thought it was criminal that she was so bright and so willing, and yet was stuck in very menial jobs.
I assumed that the reason Caroline hadn't been able to get a job in law was because she was doing something wrong. She hadn't explored the right contacts, or been tenacious enough.
So he hit the phones himself, calling people he knew in the legal world, convinced that he could 'sort her out'. He's still flabbergasted that he could not. To get to the Bar (she wanted to be a lawyer), all these people need this pupillage year, yet it is effectively a closed shop. There are so few places, and so little opportunity.'"
It shouldn't come as a surprise because wealthy people always say 'just get a job', 'don't be lazy', 'stop being poor'. Then they say companies won't bother offering jobs unless they get tax breaks. Then when the tax breaks arrive and the jobs still aren't offered, they say companies don't owe people jobs. It's an oppressive system by design because it places the control of upwards mobility in the hands of wealthy people who are only motivated by their own interests.
Taxation won't fix it entirely but it's more effective than not taxing because higher taxes correlate with higher economic growth, the 2nd link seems to be missing the graphs but the first has some:
"Anyone telling you that lower tax rates lead to faster economic growth in the U.S. either should begin by explaining why this time it’s different or has nothing useful to say about the subject.
Now, the non-defense piece of government spending is the stuff Republicans and libertarians really hate – welfare, fighting epidemics, infrastructure, etc. And it turns out that for much of the sample, in years when that bad stuff has made up a bigger part of the economy, the economy went on to grow more quickly from that year to the next."
Increasing taxation improves the economy because the government uses it in jobs programs. Handing it to shareholders turns it into assets.
The government needs to be more transparent about costs, especially what private companies are billing them - name and shame the private healthcare and military companies that are profiteering from taxpayers and other companies will compete for the contracts to reduce spending. They can also have a list of projects that need help and private companies can be assured their input is having a positive change. That can come with tax incentives.
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
It is a loophole; which is not the same thing as tax evasion. A loophole is essentially a legally valid exploit that leverages an opportunity resulting in an outcome that was unforeseen or unintended by those who legislated the opportunity. In Australia, Apple paid a paltry AU$80.3 M in tax on revenue of AU$6 Billion. That is around 1.3% in tax I think. The tax legislation which allowed that sort of outcome, was never formulated with the intent to legitimately allow it. It was allowed by a loophole.
Talk about a delusional fantasy. Communism has only ever existed solely through the strong arm of the government.
A "true" delusional fantasy would be believing that the government is actually run by the President and "other elected officials" ...instead of the financial / pentagon bunch that the (General and) former President Eisenhower warned us about in his last speech as President.
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
You may not realize this, but you are incorrect. You are mistaking ideological points of what you think should be taxable with current tax law. The money itself doesn't have to reside outside of the US. The stipulation is that it's held by non-US subsidiaries and considered to be perpetually invested outside the US (oddly that includes being held within the US by non-US subsidiaries). Now your suggestion is that it shouldn't be taxable, because it was earned outside the US. That may or may not be true. I'll explain if necessary, but I do sometimes make errors on the details.
Yes I understand that the money is usually sitting in US bank accounts which are owned by the Apple foreign subsidiary.
My larger point is if Congress were to pass a law which says that the foreign subsidiaries of American-headquartered companies WILL be taxed in the US then the outcome of that would be fairly predictable. If facing a $70b tax bill Apple would be prudent to shutter Campus 2, move headquarters to a less-retarded jurisdiction, and maintain a SUBSIDIARY in the US, just like every other non-American company doing business in the US now does without harassment.
You can't be the only country on the planet imposing a draconian tax grab on OVERSEAS earnings and expect too many multinationals to ever headquarter there.
Comments
http://uk.businessinsider.com/an-american-uses-britain-nhs-2015-1
an interesting perspective from someone who has used both types of healthcare systems.
Talk about a delusional fantasy. Communism has only ever existed solely through the strong arm of the government.
[VIDEO]
http://patrioticmillionaires.org
The millionaire host really doesn't want to pay more than 50% and then pulls the old 'what about my poor 6 kids' private tuition' routine. The millionaire hosts made their money doing what they're doing in the clip - they make their money arguing about why they shouldn't pay more tax.
The point they made about it not making a difference only works if it's applied to everything. Don't tax this portion here because it's only 10% of government spending, don't tax that portion there because it's only 5%. If it was all taxed at a reasonable rate then it would make a difference.
The main area of contention seems to always be paying for things they don't agree with. Maybe the government needs to make something like an Amazon wishlist of things they'd like to fund and if wealthy people agree to fund them then they qualify for a better tax rate. Companies are always saying things to the effect that if they get better rates they'll hire more people or invest in infrastructure but they lie about it as the stats show, lower tax rates haven't resulted in higher economic growth. Apple presumably wants to save about $20-30b on repatriation tax but rather than just saving it, why don't they commit to a plan to invest it like using it to build the best networking infrastructure in the world from which they'd profit? They'd make $50/m from at least 30m subscribers ($1.5b revenue per month). If they committed to that then they'd deserve the tax cut because they'd be employing hundreds of thousands of people and boosting the entire country's infrastructure but not if they just ask for it and give nothing in return.
The wishlist setup wouldn't mean they'd only fund these causes but it would mean that they'd be assured the bulk of their tax was going to something they were happy with. It might seem unfair to lower income individuals not getting to choose what their tax money goes to but their individual contributions aren't significant enough to warrant that choice. When the choices run out then they have to just pay tax as normal but I could see it helping a lot of tax avoiders feel that their tax money is being used for something they promote.
LOL! Complete nonsense. Any person who feels compelled to pay more taxes is certainly free to do so. In fact, I dare them to throw their money away. They won't be millionaires for long. Just don't force others to support their pretzel logic.
The main area of contention seems to always be paying for things they don't agree with.
Exactly!
As to your point of the internet infrastructure, Apple will do that regardless, if it makes economic and strategic sense to do so. If it only makes economic or strategic sense to do so because of government tinkering with the financial aspect, then it is essentially a government subsidy.
As to your point about every company digging up the road to lay fibre, that's not realistic either. If it made economic sense to do so, why would you care, and if it didn't make economic sense to do so (much more likely), then companies would form strategic partnerships to get that done.
If you're already a millionaire, paying a higher tax rate won't undo that. Taxes come off earnings, not current possessions. High tax rates on the rich just slow the rate at which they increase their possessions.
Right but things outside your own area of interest have to be paid for. For example, you might pay for school buses but don't have kids. If you choose to have kids then you'd benefit from it because having kids costs a lot. You might contribute to someone's education now and they might end up being your employee or employer years later.
That's not good enough. They've benefitted from having a healthy, prosperous, safe environment in which to conduct their business and they have a responsibility to reinvest in that infrastructure. That's how it works. People seem to think that developed Western countries are owed nothing in taxes and their own success is all down to their good ideas and it just so happens that their customers are well enough off to be able to pay for their products. Just because people ignore the process by which a civilized society comes about doesn't mean that it came for free and that it shouldn't be funded. There's a billionaire who shares a lot of the same interests as the anti-tax people:
"In 2005, Mark Cuban gave an interview to Slate in which he shared his literary love for “The Fountainhead,” a book by the libertarian philosopher Ayn Rand.
“I loved it. I don’t know how many times I have read it, but it got to the point where I had to stop because I would get too fired up.”"
and even he says paying taxes is the right thing to do:
http://blogs.wsj.com/moneybeat/2014/07/25/mark-cuban-on-tax-inversions-if-you-move-overseas-im-selling-your-stock/
http://abcnews.go.com/blogs/politics/2011/09/mark-cuban-get-rich-and-then-pay-your-taxes/
“Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write,” Cuban wrote. “Your second thought will be “what a great problem to have,” and your third should be a recognition that in paying your taxes, you are helping to support millions of Americans that are not as fortunate as you.”
In the audio clip in the 2nd link, he says that he'd like more transparency in what the government does because he'd like them to put up projects that need to be done and he says he could get a lot of them done more efficiently. The government does this all the time though with private contractors and what do the contractors do? They see it's public money, which nobody is accountable for and bill way more than usual. The healthcare, military, and finance industries are doing this and nobody is blaming them for the excessive spending. They are selling essential services so the government can't say no to it and the government gets blamed for the cost. Blame the private sellers who are taking taxpayer money and not paying their taxes.
That hasn't happened though. It doesn't make economic sense to dig up every road and companies aren't sharing their infrastructure, which creates a free-market-formed monopoly.
http://www.huffingtonpost.com/2014/03/04/cable-company-map_n_4892435.html
You think Comcast would get away with this if they weren't a monopoly?
http://consumerist.com/2015/01/30/comcast-is-also-changing-customers-names-to-whore-and-dummy/
The UK has this problem too with the biggest telecoms provider because they built up the infrastructure decades ago and retain control:
http://www.uswitch.com/broadband/news/2014/11/broadband_coalition_forms_to_challenge_bt_monopoly_/
They're going to have to be forced to share their existing infrastructure to resolve it or rebuild it as a public utility.
If you're already a millionaire, paying a higher tax rate won't undo that. Taxes come off earnings, not current possessions. High tax rates on the rich just slow the rate at which they increase their possessions.
Right but things outside your own area of interest have to be paid for. For example, you might pay for school buses but don't have kids. If you choose to have kids then you'd benefit from it because having kids costs a lot. You might contribute to someone's education now and they might end up being your employee or employer years later.
That's not good enough. They've benefitted from having a healthy, prosperous, safe environment in which to conduct their business and they have a responsibility to reinvest in that infrastructure. That's how it works. People seem to think that developed Western countries are owed nothing in taxes and their own success is all down to their good ideas and it just so happens that their customers are well enough off to be able to pay for their products. Just because people ignore the process by which a civilized society comes about doesn't mean that it came for free and that it shouldn't be funded. There's a billionaire who shares a lot of the same interests as the anti-tax people:
"In 2005, Mark Cuban gave an interview to Slate in which he shared his literary love for “The Fountainhead,” a book by the libertarian philosopher Ayn Rand.
“I loved it. I don’t know how many times I have read it, but it got to the point where I had to stop because I would get too fired up.”"
and even he says paying taxes is the right thing to do:
http://blogs.wsj.com/moneybeat/2014/07/25/mark-cuban-on-tax-inversions-if-you-move-overseas-im-selling-your-stock/
http://abcnews.go.com/blogs/politics/2011/09/mark-cuban-get-rich-and-then-pay-your-taxes/
“Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write,” Cuban wrote. “Your second thought will be “what a great problem to have,” and your third should be a recognition that in paying your taxes, you are helping to support millions of Americans that are not as fortunate as you.”
In the audio clip in the 2nd link, he says that he'd like more transparency in what the government does because he'd like them to put up projects that need to be done and he says he could get a lot of them done more efficiently. The government does this all the time though with private contractors and what do the contractors do? They see it's public money, which nobody is accountable for and bill way more than usual. The healthcare, military, and finance industries are doing this and nobody is blaming them for the excessive spending. They are selling essential services so the government can't say no to it and the government gets blamed for the cost. Blame the private sellers who are taking taxpayer money and not paying their taxes.
That hasn't happened though. It doesn't make economic sense to dig up every road and companies aren't sharing their infrastructure, which creates a free-market-formed monopoly.
http://www.huffingtonpost.com/2014/03/04/cable-company-map_n_4892435.html
You think Comcast would get away with this if they weren't a monopoly?
http://consumerist.com/2015/01/30/comcast-is-also-changing-customers-names-to-whore-and-dummy/
The UK has this problem too with the biggest telecoms provider because they built up the infrastructure decades ago and retain control:
http://www.uswitch.com/broadband/news/2014/11/broadband_coalition_forms_to_challenge_bt_monopoly_/
They're going to have to be forced to share their existing infrastructure to resolve it or rebuild it as a public utility.
It should be fairly common knowledge by now that even if the US government confiscated every single dollar of every millionaire and billionaire in the US, it would barely put a dent in the crushingly large debt that has accumulated. The problem is spending, not tax collection.
Also, Mark Cuban isn't a Libertarian or an Objectivist as far as I can tell (those aren't the same thing, by the way). He's just a canny businessman. His positions on Net Neutrality and taxation indicate he says one thing, but practices another. No self-respecting Objectivist would demand greater intrusion by government.
Obama's fixing of the loophole of overseas profits is now going to see those who argued that Apple and other companies that were 'just doing what they legally could' suddenly find some other line of argument now, I suspect.
US President Barack Obama plans to close a tax loophole that allows US firms to avoid paying taxes on overseas profits, the White House says.
His 2016 budget will impose a one-off 14% tax on US profits stashed overseas, as well as a 19% tax on any future profits as they are earned.
The $238bn (£158bn) raised will be used to fund road projects in the US.
http://www.bbc.com/news/business-31085912
Obama's fixing of the loophole of overseas profits is now going to see those who argued that Apple and other companies that were 'just doing what they legally could' suddenly find some other line of argument now, I suspect.
http://www.bbc.com/news/business-31085912
Nothing Obama proposes at this point is going anywhere. He's a lame duck and he can make any pie-in-the-sky proposal he wants. He knows better, but by floating these impossible ideas it gives him "ammunition" to use against those darn "obstructionist Republicans". He's a snake, that's for sure.
---Go Seahawks!--- (I'd rather see the Broncos there, but that didn't quite pan out)
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
Nothing is ever clear with politicians they are the lowest form of life on this planet and even attributing life to them is generous. If I had my way anyone who wants to go into politics would not be allowed to.
The federal reserve says total owned assets are $80.7t:
http://www.wsj.com/articles/SB10001424052702303824204579423183397213204
Debt is $17t = 21%. We're not talking about taking owned assets though, that's what people say to make it sound as though the government wants to turn rich people into poor people i.e punish success. Rich people are already rich, higher tax rates just slow their wealth growth rate.
I suspect the debt will always go up anyway because it's not a fixed measure remember, you have to adjust for inflation:
http://www.forbes.com/sites/danielmitchell/2012/05/24/mirror-mirror-on-the-wall-which-president-is-the-biggest-spender-of-all/
They try and twist the numbers by removing some of the expenditures on page 2 but you can reach any conclusion if you take data out of the consideration. Some people argue that having debt is good:
http://www.forbes.com/sites/johntharvey/2012/07/18/why-you-should-love-government-deficits/
It shouldn't be too much but how much is too much? What they should really do is give a measure of acceptable deficits and unsafe so there's a target. Clearly 0 is not the target.
Unless it's to break up a free-market-formed monopoly.
Doubt it and it's not as simple as that. Apple is founded in the US, they'll always be a US company and they'll always be due tax there. It's not like they can register a subsidiary to do it and they can't just give their cash away to a separate company registered elsewhere because the shareholders would never allow that.
If it went ahead they could eliminate the repatriation tax. They wouldn't need to tax overseas income and then tax it to repatriate it. 14% and 19% are fair rates but they have to allow for some tax already being paid abroad. If a company already paid 25% then 19% on top is too high. If they've paid a country's full 25% rate, they should have a zero rate tax and repatriation. Most likely US companies will try to minimize tax abroad to say 10-15% and then return the remainder 10-15% to the US, leaving them with 75%.
If it went ahead they could eliminate the repatriation tax. They wouldn't need to tax overseas income and then tax it to repatriate it. 14% and 19% are fair rates but they have to allow for some tax already being paid abroad. If a company already paid 25% then 19% on top is too high. If they've paid a country's full 25% rate, they should have a zero rate tax and repatriation. Most likely US companies will try to minimize tax abroad to say 10-15% and then return the remainder 10-15% to the US, leaving them with 75%.
They already do that via foreign tax credits. That's why I refer to the 35% number as clueless nonsense. I would point out that part of the reason for the gap in wealth isn't the rich paying taxes on income. Some taxes actually shake out in weird ways, but toward the top most of their money is made by appreciation of assets. With things such as real estate, it can be taxed as income if they sell something within two years. If they sit on it long enough, it's taxed as capital gains, even though speculative purchases are basically income. That kind of ridiculous behavior is essentially enabled by inflationary policy though. I mean even if they're taxed a bit more on it, the problem of an extreme division in purchasing power remains.
The argument brought against a repatriation holiday is that the companies will use most if not all the money on buybacks and dividends and the amount that will be spent on things like hiring and factories will be minuscule in comparison.
Stock buybacks and dividends are shareholder distributions. The guiding principle for shareholder distributions is to do what is in the best interests of shareholders. If a company can generate a better return hanging on to the cash than a shareholder could with a dividend/buyback, then the company should hang on to the cash. A company does a stock buyback if it believes that the stock is undervalued. This assessment is not going to change just because a company all of a sudden has a bunch of cash on hand. The same goes for dividends. Just because bring their cash into the US due to a repatriation tax holiday does not automatically imply that all of it will be spent on dividends/buybacks. Given where the market is, I don't know if that many companies are going to do stock buybacks.
Also, it seems that the shareholder class is considered synonymous with the 1%. I don't think this is an accurate classification. Mutual funds and institutional investors count as shareholders. Many middle-class Americans have retirement accounts that invest in these mutual funds. As a result, a shareholder distribution isn't just for the 1%.
Corporations are holding $2 trillion in overseas profits. That's $2 trillion unavailable to spend in the United States. If Congress were to pass a repatriation tax holiday, $2 trillion could come into the United States. The fact that $2 trillion is now available to spend in the US ought count for at least something.
Corporations are holding $2 trillion in overseas profits. That's $2 trillion unavailable to spend in the United States. If Congress were to pass a repatriation tax holiday, $2 trillion could come into the United States. The fact that $2 trillion is now available to spend in the US ought count for at least something.
http://www.wsj.com/articles/SB10001424127887323301104578255663224471212
That has been contested many times. The argument for a repatriation holiday was typically based around lobbying where the largest corporations claimed that funds were tied up, which might otherwise be used to build infrastructure. This is not typically the case, as smaller businesses that are more likely to have that kind of problem are less likely to be able to afford such elaborate accounting. Money doesn't have to be held in another country though. It merely has to be held by a non-US subsidiary. I don't personally have an issue with changes to broader tax laws, but tax holidays thus far have always been stupid and justified by misinformation.
Just leaving the cash dormant is worse for the economy but ideally it would be spent on growth opportunities for the company. Depleting it for shareholders doesn't give the company any return. Unlike an employee, shareholders don't do anything to create value.
I don't really think that people are always aware their retirement funds are being invested given their surprise when they find out they became worthless, not to mention the fund managers tend to make far more than the people they invest for. Workers also don't make huge returns that way because they are only investing a fraction of their salary and the funds are for security not growth. The big returns come from private equity and venture capital. It's rare for a public company to make 20x ROI in a couple of years:
http://techcrunch.com/2014/01/13/nest-investors-strike-it-rich/
"Google just bought Nest for $3.2 billion cash, and that means the startup’s early investors Kleiner Perkins Caufield Byers and Shasta Ventures have struck it rich. Multiple sources say Kleiner invested $20 million in Nest and got a 20X return to pull in $400 million."
http://whoownsfacebook.com
"Accel Partners' $12.7 million investment in Facebook in 2005 gave the firm a 15% stake. Accel's stake (less Breyer's personal one) represents 190 million class Bshares, valued at over $9.0 billion."
"Russian Internet holding company, Digital Sky, grabbed 1.96% of Facebook stock in May of 2009 when it spent $200 million at a $10 billion valuation. Digital Sky, which is largely backed by a wealthy Russian oligarch, is the owner of Facebook clone VKontakte, the largest social network in Russia. Under the direction of Managing Partner, Yuri Milner (pictured), Digital Sky has also amassed sizeable positions in Zynga and Groupon, and is reportedly in talks to buy a substantial stake in Twitter. Their Facebook investment is worth $4.6b."
This is the Bain Capital types:
http://en.wikipedia.org/wiki/Bain_Capital
http://www.businessinsider.com/these-are-the-richest-private-equity-moguls-in-the-world-2012-3?op=1
They use wealth to buy ownership of private companies relatively cheaply and then float them to the public for massive gains.
Public companies can make significant returns but people who work full-time jobs don't have the spare capital nor the time to invest. If a company like Apple makes 10x return then someone with $10k invested comes away with $90k profit minus tax, barely enough to by themselves a home but someone with $1m invested makes $9m minus tax, which would be enough to buy 25 homes they can rent out. Asset growth is higher when you already have more wealth.
You can say that about any tax though. Imagine if the 99% found a way to hide most of their taxable income, you wouldn't justify hundreds of millions of people getting tax breaks just because of all the potential revenue, it's revenue that is expected from them to be part of a functional society. A tax holiday is a special consideration that's reserved for the greedy people at the top who have the opportunity to hide their taxable income because for some reason they think that a millionaire paying $500k is more of a sacrifice than someone on $25k paying $5k. What are they sacrificing? They are left with over $500k so their quality of life can still be 25x better than the person on $25k.
Yes, it's only because they have paid hardly any tax abroad that anywhere near 35% is due.
Asset growth is definitely the bigger issue, taxes just play a part in this. You can see this from employee vs employer and investor examples:
employee makes $25k, has a pension fund and is taxed, no shares
employer has 1,000 employees in a company making $100m revenue $25m net income, has say 51% shares
venture capitalist millionaire invested in company to fund it going public owned 49% shares
The 1,000 employees are the ones maintaining the company value yet the two people at the top there get 1000x more return from it than each of them and it's more when you consider than the employee takes on debt with interest to buy a property, car, education whereas the people at the top have no debt. When you compare disposable income, the ratio will go up to over 5,000x difference.
It all really just comes down to ownership. If someone declared that they owned all of the land in a country then in order to reside there, other people would have to reward the owner with work and production. We saw this happen in real-time with ISIS where they went from nothing to taking ownership of natural resources by force and becoming millionaires:
http://abcnews.go.com/International/isis-makes-million-day-selling-oil-analysts/story?id=24814359
It's all about saying a resource or an idea belongs to someone and other people recognise that ownership and then exchange their own services or assets for a part of it. People don't like the question of how much should a person be allowed to own because it violates personal property rights but ownership comes about because of man-made systems. If someone seizes land by force in a lawless state then it doesn't really count as earned. If that's passed down to future generations then it's not earned either. If someone builds a company on a stolen idea (e.g Samsung) is that ownership to be respected?
The reason for the way it's setup is that if people are allocated property without earning it then they don't all feel they have to earn it. People are forced to be destitute, hungry and to go without by default to force them to contribute. However, that clearly isn't necessary. Some of the wealthiest people in the world started out wealthy or middle class, 80% in fact:
http://www.chicagobooth.edu/capideas/magazine/summer-2013/billionaires-self-made
http://inequality.org/selfmade-myth-hallucinating-rich/
http://www.theguardian.com/commentisfree/2012/sep/24/mitt-romney-self-creation-myth
In the 2nd link they make the point that wealthy people like Mitt Romney call themselves self-made despite inheriting wealth and privilege. That's the case with Stuart Varney in the earlier clip talking about how he worked his way up but the position he's in now only exists because the billionaire running the show wants to hear what he has to say. He doesn't see any unearned privilege in being paid a 6 figure salary for sitting in front of a camera spouting offensive rhetoric all day long.
There's a TV documentary where they pull up the stark contrast between rich and poor families:
[VIDEO]
[VIDEO]
The way the children react is the most honest and around 3:30 in the 2nd video, you can see how people who are born into a more privileged upbringing don't realise what others have to live with. One of the episodes shows where a self-made millionaire thought that you could work your way out of anything:
http://www.dailymail.co.uk/femail/article-1262602/How-half-lives-Hes-self-tycoon-Shes-single-mum-debt-But-met-TV-came-away-money-buy-.html
"I thought it was criminal that she was so bright and so willing, and yet was stuck in very menial jobs.
I assumed that the reason Caroline hadn't been able to get a job in law was because she was doing something wrong. She hadn't explored the right contacts, or been tenacious enough.
So he hit the phones himself, calling people he knew in the legal world, convinced that he could 'sort her out'. He's still flabbergasted that he could not. To get to the Bar (she wanted to be a lawyer), all these people need this pupillage year, yet it is effectively a closed shop. There are so few places, and so little opportunity.'"
It shouldn't come as a surprise because wealthy people always say 'just get a job', 'don't be lazy', 'stop being poor'. Then they say companies won't bother offering jobs unless they get tax breaks. Then when the tax breaks arrive and the jobs still aren't offered, they say companies don't owe people jobs. It's an oppressive system by design because it places the control of upwards mobility in the hands of wealthy people who are only motivated by their own interests.
Taxation won't fix it entirely but it's more effective than not taxing because higher taxes correlate with higher economic growth, the 2nd link seems to be missing the graphs but the first has some:
http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9
http://www.businessinsider.com/a-few-graphs-on-real-gdp-growth-rates-versus-taxes-and-the-size-of-government-2011-2
"Anyone telling you that lower tax rates lead to faster economic growth in the U.S. either should begin by explaining why this time it’s different or has nothing useful to say about the subject.
Now, the non-defense piece of government spending is the stuff Republicans and libertarians really hate – welfare, fighting epidemics, infrastructure, etc. And it turns out that for much of the sample, in years when that bad stuff has made up a bigger part of the economy, the economy went on to grow more quickly from that year to the next."
Increasing taxation improves the economy because the government uses it in jobs programs. Handing it to shareholders turns it into assets.
The government needs to be more transparent about costs, especially what private companies are billing them - name and shame the private healthcare and military companies that are profiteering from taxpayers and other companies will compete for the contracts to reduce spending. They can also have a list of projects that need help and private companies can be assured their input is having a positive change. That can come with tax incentives.
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
It is a loophole; which is not the same thing as tax evasion. A loophole is essentially a legally valid exploit that leverages an opportunity resulting in an outcome that was unforeseen or unintended by those who legislated the opportunity. In Australia, Apple paid a paltry AU$80.3 M in tax on revenue of AU$6 Billion. That is around 1.3% in tax I think. The tax legislation which allowed that sort of outcome, was never formulated with the intent to legitimately allow it. It was allowed by a loophole.
Talk about a delusional fantasy. Communism has only ever existed solely through the strong arm of the government.
A "true" delusional fantasy would be believing that the government is actually run by the President and "other elected officials" ...instead of the financial / pentagon bunch that the (General and) former President Eisenhower warned us about in his last speech as President.
It's not a loophole! It was money that was earned outside the United States!
This will never pass Congress, but if it did it would result in almost, if not every multinational corporation currently residing in the U.S. to start planning to move headquarters overseas. It's incredibly naive for anyone to believe that such a tax grabbing scheme could be successful.
You may not realize this, but you are incorrect. You are mistaking ideological points of what you think should be taxable with current tax law. The money itself doesn't have to reside outside of the US. The stipulation is that it's held by non-US subsidiaries and considered to be perpetually invested outside the US (oddly that includes being held within the US by non-US subsidiaries). Now your suggestion is that it shouldn't be taxable, because it was earned outside the US. That may or may not be true. I'll explain if necessary, but I do sometimes make errors on the details.
My larger point is if Congress were to pass a law which says that the foreign subsidiaries of American-headquartered companies WILL be taxed in the US then the outcome of that would be fairly predictable. If facing a $70b tax bill Apple would be prudent to shutter Campus 2, move headquarters to a less-retarded jurisdiction, and maintain a SUBSIDIARY in the US, just like every other non-American company doing business in the US now does without harassment.
You can't be the only country on the planet imposing a draconian tax grab on OVERSEAS earnings and expect too many multinationals to ever headquarter there.