In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not.
How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either.
No issues? LOL.... How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?
If nothing else, the war itself creates those issues! |
.... "An eye for an eye...."
No issues in the sense that this is how business has always been done between blocs.
Eye for an eye, tit for tat or whatever you want to call it.
It would be different if one of the parties was abusing its leverage to make the other buckle under the strain but that isn't the case here. Although the UK and Brexit consequences may see that happening at some point in that particular case. But then again, the UK would have put itself into a weak position, and wilfully.
Every sovereign state has the logical right to manage its trade affairs as it sees fit. Sometimes there will be treaties which may limit the scope of action but they can take their own decisions and live or die (economically speaking) by them.
The US, in this case, obviously has the same right.
Something completely different is an escalation in measures which lead to dramatic changes in the status quo.
In this case the EU/US trade agreement may be impacted but most Europeans would probably celebrate that.
There is a difference between managing affairs and tit-for-tat trade wars, protectionism, etc...
In the end, dumping and protectionism are simply two sides of the same coin. And its why we have organizations like the WTO. When countries indulge in tit-for-tat trade wars everybody loses (except the 1%)
It's why we have international rules of order that support global trade.
Yes, but AFAIK, things haven't escalated beyond what established rules allow for. At least yet.
I would disagree.
While there are multiple examples, in this case the USTR seems to see itself as the Derek Chauvin of trade -- ready to kneel on the neck of any nation who dares challenge the U.S.
Or, to put it another way, I think you're normalizing Trump's nationalistic policies.
Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
That is not how it works. The cost of corporate taxes flows through to the customer. That is how business works. Everyone would be actually better off with no corporate / business tax. The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of. You want more economic activity? Reduce or eliminate taxes on it. Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed. The government will get its share in the end anyway.
That's the theory. At least conservative theory.
But in today's broken broken financial world, corporations seem able to not pay much of any taxes regardless of revenue or profit -- and instead of passing the savings on to customers or investing in themselves they pass the savings on to stock holders as stock buybacks.
It's why the U.S. Treasury Secretary announced we need to put an end to the race to the bottom.
In the same way that non-US sovereign nations are free to tax anyone how they see fit within treaty frameworks, the US is also free to do the same, be it 'retaliatory' or not.
How it will be seen outside the US on a political level is something the US will have factored in and accepted, so no issues there either.
No issues? LOL.... How is war -- whether it be a shooting war, nuclear war, cold war, ideological war or trade war -- have "No Issues"?
If nothing else, the war itself creates those issues! |
.... "An eye for an eye...."
No issues in the sense that this is how business has always been done between blocs.
Eye for an eye, tit for tat or whatever you want to call it.
It would be different if one of the parties was abusing its leverage to make the other buckle under the strain but that isn't the case here. Although the UK and Brexit consequences may see that happening at some point in that particular case. But then again, the UK would have put itself into a weak position, and wilfully.
Every sovereign state has the logical right to manage its trade affairs as it sees fit. Sometimes there will be treaties which may limit the scope of action but they can take their own decisions and live or die (economically speaking) by them.
The US, in this case, obviously has the same right.
Something completely different is an escalation in measures which lead to dramatic changes in the status quo.
In this case the EU/US trade agreement may be impacted but most Europeans would probably celebrate that.
There is a difference between managing affairs and tit-for-tat trade wars, protectionism, etc...
In the end, dumping and protectionism are simply two sides of the same coin. And its why we have organizations like the WTO. When countries indulge in tit-for-tat trade wars everybody loses (except the 1%)
It's why we have international rules of order that support global trade.
Yes, but AFAIK, things haven't escalated beyond what established rules allow for. At least yet.
I would disagree.
While there are multiple examples, in this case the USTR seems to see itself as the Derek Chauvin of trade -- ready to kneel on the neck of any nation who dares challenge the U.S.
Or, to put it another way, I think you're normalizing Trump's nationalistic policies.
In the case of China you are freakishly correct. The US actually used the term 'chokepoint' in its reports.
That was tacit admission to US strategic planning errors on technology and manufacturing and also that the 'rulebook' no longer applied. It would simply bludgeon its way through to stopping China any way it could and with the sole purpose of not losing predominance in technology.
The situation we are in with regards to the EU isn't like the China situation yet, although the US did cross many red lines under Trump. Biden will not be able to correct those mistakes as the EU has already taken its decision. Trump was just a wake call but in reality the EU had already chosen its path. All Trump achieved was getting everyone to accelerate those plans.
The EU is playing by the book. The WTO late last year authorised EU tariffs against the US to the tune of $4bn, since postponed for four months while both sides work things out.
Like I said, this is how these things work and there is no issue with the US taking countermeasures.
If things do escalate, obviously it will be a different situation.
Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
That is not how it works. The cost of corporate taxes flows through to the customer. That is how business works. Everyone would be actually better off with no corporate / business tax. The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of. You want more economic activity? Reduce or eliminate taxes on it. Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed. The government will get its share in the end anyway.
That's the theory. At least conservative theory.
But in today's broken broken financial world, corporations seem able to not pay much of any taxes regardless of revenue or profit -- and instead of passing the savings on to customers or investing in themselves they pass the savings on to stock holders as stock buybacks.
It's why the U.S. Treasury Secretary announced we need to put an end to the race to the bottom.
A lot of big corporations only seem to pay not much taxes on their profits when accounting for the low corporate tax rate they paid on their overseas profits, that are still overseas. But they will have to pay the US corporate tax rate on those profits if they were to spend those profits in the US.
Not sure with other countries, but with US public own corporations, they can not buy back their own stocks with money that has not been taxed in the US. There is no tax savings with this money. It's the same with dividend payouts. The profits corporations use to pay shareholders a dividend must first be taxed in the US. This is the main reason why "qualified dividends" are taxed at the long term capital gains rate. That money has already been taxed as profit at the corporate level. Apple can not use the profits they have sitting overseas that has been taxed overseas (at a very low interest rate), to buy back their own stocks or use it to pay their dividend, unless that money gets taxed in the US.
Plus with public own companies, any corporate money left after legally paying all the taxes on it, belongs to the shareholders. So they are not "passing" the savings on to shareholders as stock buybacks, they are returning their money to them. And buybacks can be (and is considered by most) ..... "investing in themselves" ...... if the corporation thinks their stock is under valued. A lot of corporations do buybacks from time to time, to make up for the stocks they hand out to their employees as part of their pay package. This prevents the dilution of shares to their shareholders, by not having to issue new shares or to make up for the new shares they already issued, for this purpose.
Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
That is not how it works. The cost of corporate taxes flows through to the customer. That is how business works. Everyone would be actually better off with no corporate / business tax. The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of. You want more economic activity? Reduce or eliminate taxes on it. Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed. The government will get its share in the end anyway.
That's the theory. At least conservative theory.
But in today's broken broken financial world, corporations seem able to not pay much of any taxes regardless of revenue or profit -- and instead of passing the savings on to customers or investing in themselves they pass the savings on to stock holders as stock buybacks.
It's why the U.S. Treasury Secretary announced we need to put an end to the race to the bottom.
A lot of big corporations only seem to pay not much taxes on their profits when accounting for the low corporate tax rate they paid on their overseas profits, that are still overseas. But they will have to pay the US corporate tax rate on those profits if they were to spend those profits in the US.
Not sure with other countries, but with US public own corporations, they can not buy back their own stocks with money that has not been taxed in the US. There is no tax savings with this money. It's the same with dividend payouts. The profits corporations use to pay shareholders a dividend must first be taxed in the US. This is the main reason why "qualified dividends" are taxed at the long term capital gains rate. That money has already been taxed as profit at the corporate level. Apple can not use the profits they have sitting overseas that has been taxed overseas (at a very low interest rate), to buy back their own stocks or use it to pay their dividend, unless that money gets taxed in the US.
Plus with public own companies, any corporate money left after legally paying all the taxes on it, belongs to the shareholders. So they are not "passing" the savings on to shareholders as stock buybacks, they are returning their money to them. And buybacks can be (and is considered by most) ..... "investing in themselves" ...... if the corporation thinks their stock is under valued. A lot of corporations do buybacks from time to time, to make up for the stocks they hand out to their employees as part of their pay package. This prevents the dilution of shares to their shareholders, by not having to issue new shares or to make up for the new shares they already issued, for this purpose.
You're assuming that that corporation actually pays taxes at all.
The U.S. tax rate has been a joke. It's the maximum rate a corporation can pay. In reality, loopholes and deductions often take that rate down to zero.
Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
That is not how it works. The cost of corporate taxes flows through to the customer. That is how business works. Everyone would be actually better off with no corporate / business tax. The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of. You want more economic activity? Reduce or eliminate taxes on it. Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed. The government will get its share in the end anyway.
That's the theory. At least conservative theory.
But in today's broken broken financial world, corporations seem able to not pay much of any taxes regardless of revenue or profit -- and instead of passing the savings on to customers or investing in themselves they pass the savings on to stock holders as stock buybacks.
It's why the U.S. Treasury Secretary announced we need to put an end to the race to the bottom.
A lot of big corporations only seem to pay not much taxes on their profits when accounting for the low corporate tax rate they paid on their overseas profits, that are still overseas. But they will have to pay the US corporate tax rate on those profits if they were to spend those profits in the US.
Not sure with other countries, but with US public own corporations, they can not buy back their own stocks with money that has not been taxed in the US. There is no tax savings with this money. It's the same with dividend payouts. The profits corporations use to pay shareholders a dividend must first be taxed in the US. This is the main reason why "qualified dividends" are taxed at the long term capital gains rate. That money has already been taxed as profit at the corporate level. Apple can not use the profits they have sitting overseas that has been taxed overseas (at a very low interest rate), to buy back their own stocks or use it to pay their dividend, unless that money gets taxed in the US.
Plus with public own companies, any corporate money left after legally paying all the taxes on it, belongs to the shareholders. So they are not "passing" the savings on to shareholders as stock buybacks, they are returning their money to them. And buybacks can be (and is considered by most) ..... "investing in themselves" ...... if the corporation thinks their stock is under valued. A lot of corporations do buybacks from time to time, to make up for the stocks they hand out to their employees as part of their pay package. This prevents the dilution of shares to their shareholders, by not having to issue new shares or to make up for the new shares they already issued, for this purpose.
You're assuming that that corporation actually pays taxes at all.
The U.S. tax rate has been a joke. It's the maximum rate a corporation can pay. In reality, loopholes and deductions often take that rate down to zero.
You are the one assuming corporations do not pay any taxes at all. Even the profits they are holding overseas has been taxed by the country to whom they reported the profit. If a corporation did not pay any US taxes, they had no taxable profit to report and would not be able to do a buyback. A corporation can not borrow money for a buyback, as that is not allowed under SEC rules.
Show me a corporation that had not ever paid any taxes on their US profits. I'm not talking about for a year to two when they had very little or no US profit to report. Revenue is not profit. Taxable profit is AFTER all legal loopholes and deductions are deducted from revenue. So to say that a corporation didn't pay any taxes on their profit because of loopholes and deductions, don't make sense.
About 45% of US citizens with income, pays no taxes and many used legal loopholes and deductions to do that. They would be stupid if they didn't and paid taxes on income, when they legally didn't have to.
And NO, loopholes and deductions DO NOT take the corporate tax rate to zero, it can bring down the EFFECTIVE tax rate to zero. The corporate tax rate remains 21% on all reported profit, after using all legal loopholes and deductions.
And just because a corporation paid zero corporate taxes doesn't mean that they didn't contribute in any way to IRS tax revenue. Here's an example that would first appear to be a rip off to taxpayers ........
Say that Amazon was looking at the prospect of paying corporate tax on $100M in profit. But instead, they used all of that $100M to pay their top executives bonuses. You would of course have a fit and claim that Amazon got away with paying zero taxes on their profit by using loopholes and deductions. But here's what really would happen if they did that.
Bonuses are salary and thus deductible as a business expense. But salary is subject to payroll taxes and reported as income for the receiver. Since all of Amazon top executives are probably in the top marginal income tax bracket, that translate to 37% in income taxes, along with the 15.3% in payroll taxes. So instead of receiving 21% in corporate taxes on that $100M, the IRS got over 52.3% in other taxes. Then there's the State income tax that will be collected from the executives that lives in States with a State income tax. In CA, that could mean another 10 to 13% went to taxes. Which would you think the government would prefer Amazon to do with that $100M?
It is always better for the government and the economy if corporations were to spend all of their revenue, rather than to pay corporate taxes on any of it. Amazon did this and more, for over tens years when they first started. A good year for Amazon back then was when they lost less than expected. But you can't say that just because Amazon didn't pay any corporate taxes in those years that the government did not receive any tax revenue at all, from Amazon spending more than all of their revenue on deductions like capital improvements, stock options, job creation, expanding, etc.. Spending that ended up contributing to Fed and State income taxes, payroll taxes, sale taxes, property taxes and local business taxes, that far out weigh the benefit of what the IRS would have collected with the 35% corporate tax rate at the time.
The biggest contribution corporations make to government tax revenue is the creation of jobs. Income and payroll taxes account for over 85% of all IRS tax revenue. (Not including State income taxes.) Corporate taxes only accounts for about 7 to 10%. And salaries, wages and benifits are tax deductions and for most corporations, the largest tax deduction. And that is not a bad thing.
Only .1% of all business are classified as large corporations, while 99.9% of all business are classified as small businesses. But large corporations accounts for over 50% of the jobs in the US.That accounts for a lot of income and payroll taxes collected every year, from just .1% of the businesses in the US. Whether they had to pay any corporate taxes or not.
Developers will just get less money from the sales of digital goods and services, so they will raise prices accordingly.
This is a factor that the taxers ignore. The current administration wants to raise corporate tax rates to pay for it’s multi-trillion dollar infrastructure project. What’s so hard to understand that those tax increases will be passed on to the consumer in the form of higher prices? That’s the problem with the ‘tax the rich’ argument sold to the masses. The masses wind up paying for it anyway. Taxes will, in effect, will be raised on the middle class as they always are, just through the back door of the corporate tax rate.
With that kind of logic no company should pay taxes, which is insane! Companies that have multibillion dollar profits can certainly pay more corporate tax without needing to raise prices. And there is a limit to how much companies can raise prices, otherwise they will lose sales and profits! What governments should avoid is increasing taxes that have a direct impact on price of goods
That is not how it works. The cost of corporate taxes flows through to the customer. That is how business works. Everyone would be actually better off with no corporate / business tax. The maxim is you tax the things you want less of and reduce or eliminate taxes on things / behaviors you want more of. You want more economic activity? Reduce or eliminate taxes on it. Workers will get paid more and companies will invest more, which in the end will mean more and better economic activity which will lead to better wages -- which get taxed. The government will get its share in the end anyway.
That's the theory. At least conservative theory.
But in today's broken broken financial world, corporations seem able to not pay much of any taxes regardless of revenue or profit -- and instead of passing the savings on to customers or investing in themselves they pass the savings on to stock holders as stock buybacks.
It's why the U.S. Treasury Secretary announced we need to put an end to the race to the bottom.
A lot of big corporations only seem to pay not much taxes on their profits when accounting for the low corporate tax rate they paid on their overseas profits, that are still overseas. But they will have to pay the US corporate tax rate on those profits if they were to spend those profits in the US.
Not sure with other countries, but with US public own corporations, they can not buy back their own stocks with money that has not been taxed in the US. There is no tax savings with this money. It's the same with dividend payouts. The profits corporations use to pay shareholders a dividend must first be taxed in the US. This is the main reason why "qualified dividends" are taxed at the long term capital gains rate. That money has already been taxed as profit at the corporate level. Apple can not use the profits they have sitting overseas that has been taxed overseas (at a very low interest rate), to buy back their own stocks or use it to pay their dividend, unless that money gets taxed in the US.
Plus with public own companies, any corporate money left after legally paying all the taxes on it, belongs to the shareholders. So they are not "passing" the savings on to shareholders as stock buybacks, they are returning their money to them. And buybacks can be (and is considered by most) ..... "investing in themselves" ...... if the corporation thinks their stock is under valued. A lot of corporations do buybacks from time to time, to make up for the stocks they hand out to their employees as part of their pay package. This prevents the dilution of shares to their shareholders, by not having to issue new shares or to make up for the new shares they already issued, for this purpose.
You're assuming that that corporation actually pays taxes at all.
The U.S. tax rate has been a joke. It's the maximum rate a corporation can pay. In reality, loopholes and deductions often take that rate down to zero.
You are the one assuming corporations do not pay any taxes at all. Even the profits they are holding overseas has been taxed by the country to whom they reported the profit. If a corporation did not pay any US taxes, they had no taxable profit to report and would not be able to do a buyback. A corporation can not borrow money for a buyback, as that is not allowed under SEC rules.
Show me a corporation that had not ever paid any taxes on their US profits. I'm not talking about for a year to two when they had very little or no US profit to report. Revenue is not profit. Taxable profit is AFTER all legal loopholes and deductions are deducted from revenue. So to say that a corporation didn't pay any taxes on their profit because of loopholes and deductions, don't make sense.
About 45% of US citizens with income, pays no taxes and many used legal loopholes and deductions to do that. They would be stupid if they didn't and paid taxes on income, when they legally didn't have to.
And NO, loopholes and deductions DO NOT take the corporate tax rate to zero, it can bring down the EFFECTIVE tax rate to zero. The corporate tax rate remains 21% on all reported profit, after using all legal loopholes and deductions.
And just because a corporation paid zero corporate taxes doesn't mean that they didn't contribute in any way to IRS tax revenue. Here's an example that would first appear to be a rip off to taxpayers ........
Say that Amazon was looking at the prospect of paying corporate tax on $100M in profit. But instead, they used all of that $100M to pay their top executives bonuses. You would of course have a fit and claim that Amazon got away with paying zero taxes on their profit by using loopholes and deductions. But here's what really would happen if they did that.
Bonuses are salary and thus deductible as a business expense. But salary is subject to payroll taxes and reported as income for the receiver. Since all of Amazon top executives are probably in the top marginal income tax bracket, that translate to 37% in income taxes, along with the 15.3% in payroll taxes. So instead of receiving 21% in corporate taxes on that $100M, the IRS got over 52.3% in other taxes. Then there's the State income tax that will be collected from the executives that lives in States with a State income tax. In CA, that could mean another 10 to 13% went to taxes. Which would you think the government would prefer Amazon to do with that $100M?
It is always better for the government and the economy if corporations were to spend all of their revenue, rather than to pay corporate taxes on any of it. Amazon did this and more, for over tens years when they first started. A good year for Amazon back then was when they lost less than expected. But you can't say that just because Amazon didn't pay any corporate taxes in those years that the government did not receive any tax revenue at all, from Amazon spending more than all of their revenue on deductions like capital improvements, stock options, job creation, expanding, etc.. Spending that ended up contributing to Fed and State income taxes, payroll taxes, sale taxes, property taxes and local business taxes, that far out weigh the benefit of what the IRS would have collected with the 35% corporate tax rate at the time.
The biggest contribution corporations make to government tax revenue is the creation of jobs. Income and payroll taxes account for over 85% of all IRS tax revenue. (Not including State income taxes.) Corporate taxes only accounts for about 7 to 10%. And salaries, wages and benifits are tax deductions and for most corporations, the largest tax deduction. And that is not a bad thing.
Only .1% of all business are classified as large corporations, while 99.9% of all business are classified as small businesses. But large corporations accounts for over 50% of the jobs in the US.That accounts for a lot of income and payroll taxes collected every year, from just .1% of the businesses in the US. Whether they had to pay any corporate taxes or not.
Sorry, but too many U.S. corporations (along with the 1%) pay little if any taxes. That needs to change.
You pretty much point that out yourself when you said the main (only?) contribution corporations is to create the lower class and middle class jobs for people who do pay taxes.
Trickle down doesn't trickle down. It just leaves the little guy carrying the tax burden of the wealthy.
Comments
That was tacit admission to US strategic planning errors on technology and manufacturing and also that the 'rulebook' no longer applied. It would simply bludgeon its way through to stopping China any way it could and with the sole purpose of not losing predominance in technology.
The situation we are in with regards to the EU isn't like the China situation yet, although the US did cross many red lines under Trump. Biden will not be able to correct those mistakes as the EU has already taken its decision. Trump was just a wake call but in reality the EU had already chosen its path. All Trump achieved was getting everyone to accelerate those plans.
The EU is playing by the book. The WTO late last year authorised EU tariffs against the US to the tune of $4bn, since postponed for four months while both sides work things out.
Like I said, this is how these things work and there is no issue with the US taking countermeasures.
If things do escalate, obviously it will be a different situation.
Not sure with other countries, but with US public own corporations, they can not buy back their own stocks with money that has not been taxed in the US. There is no tax savings with this money. It's the same with dividend payouts. The profits corporations use to pay shareholders a dividend must first be taxed in the US. This is the main reason why "qualified dividends" are taxed at the long term capital gains rate. That money has already been taxed as profit at the corporate level. Apple can not use the profits they have sitting overseas that has been taxed overseas (at a very low interest rate), to buy back their own stocks or use it to pay their dividend, unless that money gets taxed in the US.
Plus with public own companies, any corporate money left after legally paying all the taxes on it, belongs to the shareholders. So they are not "passing" the savings on to shareholders as stock buybacks, they are returning their money to them. And buybacks can be (and is considered by most) ..... "investing in themselves" ...... if the corporation thinks their stock is under valued. A lot of corporations do buybacks from time to time, to make up for the stocks they hand out to their employees as part of their pay package. This prevents the dilution of shares to their shareholders, by not having to issue new shares or to make up for the new shares they already issued, for this purpose.
If a corporation did not pay any US taxes, they had no taxable profit to report and would not be able to do a buyback. A corporation can not borrow money for a buyback, as that is not allowed under SEC rules.
Show me a corporation that had not ever paid any taxes on their US profits. I'm not talking about for a year to two when they had very little or no US profit to report. Revenue is not profit. Taxable profit is AFTER all legal loopholes and deductions are deducted from revenue. So to say that a corporation didn't pay any taxes on their profit because of loopholes and deductions, don't make sense.
About 45% of US citizens with income, pays no taxes and many used legal loopholes and deductions to do that. They would be stupid if they didn't and paid taxes on income, when they legally didn't have to.
And NO, loopholes and deductions DO NOT take the corporate tax rate to zero, it can bring down the EFFECTIVE tax rate to zero. The corporate tax rate remains 21% on all reported profit, after using all legal loopholes and deductions.
And just because a corporation paid zero corporate taxes doesn't mean that they didn't contribute in any way to IRS tax revenue. Here's an example that would first appear to be a rip off to taxpayers ........
Say that Amazon was looking at the prospect of paying corporate tax on $100M in profit. But instead, they used all of that $100M to pay their top executives bonuses. You would of course have a fit and claim that Amazon got away with paying zero taxes on their profit by using loopholes and deductions. But here's what really would happen if they did that.
Bonuses are salary and thus deductible as a business expense. But salary is subject to payroll taxes and reported as income for the receiver. Since all of Amazon top executives are probably in the top marginal income tax bracket, that translate to 37% in income taxes, along with the 15.3% in payroll taxes. So instead of receiving 21% in corporate taxes on that $100M, the IRS got over 52.3% in other taxes. Then there's the State income tax that will be collected from the executives that lives in States with a State income tax. In CA, that could mean another 10 to 13% went to taxes. Which would you think the government would prefer Amazon to do with that $100M?
It is always better for the government and the economy if corporations were to spend all of their revenue, rather than to pay corporate taxes on any of it. Amazon did this and more, for over tens years when they first started. A good year for Amazon back then was when they lost less than expected. But you can't say that just because Amazon didn't pay any corporate taxes in those years that the government did not receive any tax revenue at all, from Amazon spending more than all of their revenue on deductions like capital improvements, stock options, job creation, expanding, etc.. Spending that ended up contributing to Fed and State income taxes, payroll taxes, sale taxes, property taxes and local business taxes, that far out weigh the benefit of what the IRS would have collected with the 35% corporate tax rate at the time.
The biggest contribution corporations make to government tax revenue is the creation of jobs. Income and payroll taxes account for over 85% of all IRS tax revenue. (Not including State income taxes.) Corporate taxes only accounts for about 7 to 10%. And salaries, wages and benifits are tax deductions and for most corporations, the largest tax deduction. And that is not a bad thing.
Only .1% of all business are classified as large corporations, while 99.9% of all business are classified as small businesses. But large corporations accounts for over 50% of the jobs in the US.That accounts for a lot of income and payroll taxes collected every year, from just .1% of the businesses in the US. Whether they had to pay any corporate taxes or not.