How Companies Are Bypassing The U.S. High Income-Tax Rate

@iSynic

Easy enough to answer: the US government allows this to continue because they have a choice between losing out on some tax money or forcing the companies in question to pay said taxes.

If they force the companies to pay the higher taxes, those companies will likely move to another country, and the US government does not want to be directly responsible for tens of thousands of high paying tech jobs moving overseas.

There are two ways to stop this practice:

1. The high-tax countries could force the low-tax countries to become high-tax, requiring a one-world government. (This is the solution we're likely to see in our lifetimes.)
2. The FairTax bill could be passed and signed, which would eliminate investment and income taxes, replacing them with a national sales tax. (It's a bit more complex than that, and the sales tax would come out of existing prices, but you get the idea.) Thus, companies would invest in American investments instead of making Irish profits and depositing them in Cayman banks.

One is slavery, a boot stamping on the face of free people forever, and the other is a pro-growth, pro-investment, pro-economy system which would outlaw the IRS, and which is more progressive mathematically than any tax system in the world.

Google's founders are liberals supporting the likes of Gavin Newsom, yet they dodge taxes. Hypocrites!!!!!

I love how the idea that these companies worked hard to make that money and maybe will be able to pay programmers and engineers better if they get to keep their earnings never enters the mind of a socialist. Its always whining about how much money we lost because these greedy corporations do sneaky bad things. Do you REALLY believe our government would do something useful with that money? Really? You still think that? After all the debt and all the lies and all the failed multi-hundred billion dollar programs? You still think that money will teach your kids something? Or hire another fireman?

Note "intellectual property" is a long word for patents. The trick is to patent something random, transfer that patent to a foreign firm that you own, then license the patent back to yourself for a % royalty of turnover that ensure you make barely any profits. Why this works is that many countries (esp. Ireland but others too) do not tax income on patents.

It's one reason these firms all love patents, especially on software. It is a solid ripoff, because the exemption on tax for patent royalties is meant to promote innovation, but of course it doesn't. It's just a carefully constructed loophole.

Now the good news is that you don't need a 'real' patent for this to work, any patent claim, even one that's not granted, will do. So anyone firm with turnover of above a small amount can use this to legally shift profits overseas.

Enjoy!

Don't blame the business, folks! Hate to say it, but the US Tax Laws are pretty much Anti-Business. LOWER TAX RATES = MORE BUSINESS, and MORE JOBS folks. It's truly not Rocket Science. STOP SPENDING our Kids', Grandkids', & great-Grandkids' money, Uncle Sam, and things will improve for ALL ("....Rising Tide lifts all boats...."). On top of this, we'll be able to stop borrowing from China and get them paid off, thereby significantly improving our economy and security as a nation. Got to use the "Supermarket Mentality" folks - charge a lot less for products, just sell a lot more of them as a result; lower tax rate = more business/jobs, = more people paying into the Tax System = the same or more funds available. Pay taxes on a common scale - those that can purchase can afford the taxes, those that can't, won't purchase. Self-Regulating, and STILL promotes the Free Market System - FAIRLY. Sorry to ramble, but IT'S ALL RELATED! Get out of business' and the workforce's way ane pockets, Uncle Sam! ALL will benefit!

And how much personal income tax is collected by the US ? And how much capital gains tax is collected? From above mentioned companies?

The current salary (2010) for rank-and-file members of the House and Senate is $174,000 per year.
Senate Leadership
Majority Party Leader - $193,400
Minority Party Leader - $193,400

House Leadership
Speaker of the House - $223,500
Majority Leader - $193,400
Minority Leader - $193,400

There are 535 people in congress. Each state has 2 senators which is 100 and there are 435 representatives.

While the average American workers (March 25th 2009) earns $52,000.

Somehow I suspect Google/etc are better (more efficient) managed than the congress.

But then again I dont live in the US so who am I to speak. Myself, I live in a country where more or less 55% of what I make goes to income tax and corp. tax is at 26.3%. Capital Gains Tax you ask? Oh, its a steady 30%. Yup, I live in entrepreneur paradise.

So let's say we plug this loophole and these large corporations have to start paying much higher tax bills. They have an obligation to satisfy their investors, so they must compensate for those higher expenses... maybe they raise prices, maybe they higher fewer people, maybe they buy less from their vendors. If they don't satisfy their investors, the investment funds go elsewhere... maybe even overseas. Is that a better outcome? You have to look at the whole chain, not just one link.

Forex for all.

Sad how people like Rat9 have no clue about the reality of corporate dominance and making money on the backs and the infrastructure (like freeways, for example) of We The People.

Tax Tips:

Why dont the US, despite the issues with the constitution, start collecting capital gains tax from non us citizen trading us stocks?
And no, it wouldnt be complicated to implement. The procedure is more or less allready in place today and goes under the name "W8-BEN". The difference would just be that the brokerfirm instead of delivering the (taxfree) money would deduct 10-15% and deliver it to the IRS..

And no, it wouldnt scare investors off since tax paid in one place can in any country be used as a write-off. Well, unless we are talking about Offshore places with no taxes at all :-)

hi; i wanna the diagrams about of ERP system.

I think it is ridiculous that American companies and American citizens are required to pay taxes on their worldwide income. I believe that the US should only be able to tax economic activity within its own borders and nowhere else. Countries like Hong Kong, Singapore, and many more do not doubly tax its companies or citizens on foreign income. US companies earning foreign income are responsible to pay taxes to the respective country in which it is earned, and should only have to pay taxes there. US companies are at a huge disadvantage if they are doubly taxed having to pay both US taxes, and taxes to the foreign country where they earned their money. I do not believe that Google or any other company is being unethical by LEGALLY avoiding US corporate income tax from money earned in a foreign country. The companies have a responsibility to their stockholders, and should avoid unnecessary costs such as taxes whenever they can do it legally. The US has the 2nd highest corporate tax rate in the world after Japan's, and it would greatly help investment to the US by greatly lowering the corporate tax.

I think Leona Helmsley said it best: "Only little people pay taxes." The larger the disparity between high and low incomes the more power the high incomes have to evade their responsibilities. Enormous income is leveraged by other accumulated advantages. Likewise, over the past 30 years in America, average earners have seen their incomes flatten and have seen a simultaneous loss of powers and influences in other areas.

Now for something completely different...Switzerland has become a new Tax Haven, too!? The Cayman Islands are amoung the Knights who "no longer say Ni!"

Americans against taxation: Let's be crystal clear about where your tax money goes. 50% of every dollar collected is spent on 'military' spending. That does not mean nice shiny new armour suits to protect the blood of your soldiers overseas. That means money into the pockets of the largest corporations in the US: General Dynamics, Halliburton, Raytheon, and the rest of the Fortune 500 who are military defence contractors. So think twice when you say you want the government to stop spending tax dollars.

I have a couple questions, where do corporations get the money to pay taxes? Why can't we understand that corporations are TAX COLLECTORS not TAXPAYERS?

2/3 of all public corporations pay zero income taxes yet are viewed as persons by the U.S. legal system while externalizing all possible activities onto publicly paid for resources to increase share holder profit as fast as possible (their only reason for existence and what they are obligated to pursue under U.S. law). Corporate welfare in the U.S. is ten times that of all social welfare aggregated. Furthermore, they were and remain instrumental in the detrimental "free" trade legislation that has hollowed out the country's jobs, wealth, and innovation to foreign host countries and workers both abroad and insourced on visa (66,000 per year on non-immigrant visas to displace American workers in this Great Recession right now).

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