Obama Wants to End Corp Off Shore Tax Havens

[Gratiot]

Obama Wants to End Tax Rules That Save Companies $190 Billion

May 4 (Bloomberg) -- President Barack Obama will propose today to outlaw three offshore tax-avoidance techniques U.S. companies such as Caterpillar Inc. and Procter & Gamble Co. want to use to save $190 billion over the next decade and make it riskier for Americans to stash money in tax-haven banks.
Obama and Treasury Secretary Timothy Geithner will target a strategy that allows U.S.-based multinational companies to effectively hide from the Internal Revenue Service the role their foreign subsidiaries play in shifting profits into low-tax jurisdictions such as the Cayman Islands, an administration official said.
The proposal, affecting tax rules known as “check the box,” would net $86.5 billion in revenue between 2011-2019 by overhauling regulations created in Democrat Bill Clinton’s administration and later written into law by a Republican- controlled Congress after Clinton tried to withdraw the rules.

LINK - Yahoo/Bloomberg

[Gratiot]

While I'm hesitant on the timing, I have to give Obama credit on this one.  Albeit, how it's implemented may leave a lot to be desired.

[thundley4]

This is a great idea.   As if high wages aren't driving manufacturing out of the US, let's jack up the taxes on the few companies that still make products here. I wonder how closing these "loopholes" will affect the big three car makers, or will 0Bama somehow manage to leave loopholes in place for the UAW owners?

[Lord Undies]

Is Obarry now singlehandedly changing tax laws?  I'm so confused these days.  What is congress and the Supreme Court all about these days? 

[Gratiot]

This is a great idea.   As if high wages aren't driving manufacturing out of the US, let's jack up the taxes on the few companies that still make products here. I wonder how closing these "loopholes" will affect the big three car makers, or will 0Bama somehow manage to leave loopholes in place for the UAW owners?

Of all the major companies which it has been known, as taking advantage of these recently introduced tax havens.  I'm unaware of the auto makers being among them.

I don't think the problem is so much that they're paying "high" taxes, as it is that they're skipping out on almost all of their tax liabilities by utilizing these subsidiaries.  Which serve no other purpose, than to hide profits.

While I agree it may be disruptive with the initial implementation, I'm not sure it's a bad thing depending on how it's done.  As it's ludicrous that we allow some of our largest corporations, to establish an office in the Bermuda's, and than skip out on their tax liabilities.  

[Lord Undies]

Of all the major companies which it has been known, as taking advantage of these recently introduced tax havens.  I'm unaware of the auto makers being among them.

I don't think the problem is so much that they're paying "high" taxes, as it is that they're skipping out on almost all of their tax liabilities by utilizing these subsidiaries.  Which serve no other purpose, than to hide profits.

While I agree it may be disruptive with the initial implementation, I'm not sure it's a bad thing depending on how it's done.  As it's ludicrous that we allow some of our largest corporations, to establish an office in the Bermuda's, and than skip out on their tax liabilities.  

You advocate corporations paying taxes?  Corporations do not pay taxes.  Each and every attempt to squeeze more money out of e-ville corporations is just another tax on the consumer.  All corporate taxes should be abolished immediately.  People pay taxes.  Corporations make money for people. 

[Gratiot]

You advocate corporations paying taxes?  Corporations do not pay taxes.  Each and every attempt to squeeze more money out of e-ville corporations is just another tax on the consumer.  All corporate taxes should be abolished immediately.  People pay taxes.  Corporations make money for people. 

I'm actually inclined to agree with you.  However, our tax code and structure is not aligned with that philosophy.  That being the case, these corporations are given an unjust market edge and boost to their shareholders at the arguable expense of our nation..  Granted it's quite likely that we're both counted among their shareholders, to some not insignificant extent. 

[USA4ME]

Doesn't matter in the long run, corps and individuals who want to tuck money away will find a way to do it.  All this is going to do is add an extra layer or layers to hide behind, but the wheels of gov't turn slowly, and big corps and individuals have tax attorneys who find the loopholes and the leaks, and they'll move quicker than the gov't can ever hope to create laws.  They may catch a few smaller corps and individuals who will find no advantage to adding the extra layer(s) of anonymity, but the big corps and the mega-rich will pay the extra because the savings is still too significant.

For example, this is from the article:

For individuals, Obama will propose shifting the burden of proof when the IRS believes money is being hidden offshore. In cases where individuals bank with financial institutions that haven’t agreed to report certain account information to the IRS, the individual will have to prove he or she doesn’t own the account, rather than requiring the IRS to prove ownership.

How do they not already know an individual owns the account, you might ask.  What individuals do is go overseas, open up a corp, loan the money to the corp, make yourself the officer, and the account isn't a personal account, now it's a foreign corp that makes money but it's not subject to US taxes.

Now you have to prove you don't own the account.  Easy enough.  For a fee, some gov't will be more than happy to create a person who never existed who then becomes owner of the account.  So who owns the account?  Ping Pong Tang owns the account, just ask China they have the paperwork on him.  In the meanwhile, John Smith still controls the account (wink, wink).

That's probably too simple, there's more complicated ways to create a maze for any gov't snoopers, no doubt.  Like I said, they'll add layers.

.

[DumbAss Tanker]

You advocate corporations paying taxes?  Corporations do not pay taxes.  Each and every attempt to squeeze more money out of e-ville corporations is just another tax on the consumer.  All corporate taxes should be abolished immediately.  People pay taxes.  Corporations make money for people. 

True factually, but by the same token, looking at it as a system, that also means it doesn't matter which end you take it out from, so why not tax half a million corporations instead of 100 million individuals, after all the corporation represents a node of control in the flow that is vastly more efficient to deal with for regulation, reporting and payment. 

Taxing a corporation does have the additional feature that only its own consumers take the hit instead of distributing the same tax overhead over the entire taxed population, artificially lowering the corporation's cost of doing business at the expense of all those who do not consume its products - e.g., while you can fairly argue that Dell doesn't pay taxes, the people who buy its products do, that nonetheless has the net positive that ONLY the consumers of Dell's products are paying those taxes. 

[NHSparky]

But by the same token, you eliminate the offshore havens, now you have to add to the layers previously discussed, which means guess what?  You have to add to the existing bureaucracy digging through those layers; ergo, bigger government, meaning the need for more taxes, more layers, more bureaucracy...until the whole system implodes upon itself.

We're closer to that implosion than many may think.

[Lord Undies]

True factually, but by the same token, looking at it as a system, that also means it doesn't matter which end you take it out from, so why not tax half a million corporations instead of 100 million individuals, after all the corporation represents a node of control in the flow that is vastly more efficient to deal with for regulation, reporting and payment. 

Taxing a corporation does have the additional feature that only its own consumers take the hit instead of distributing the same tax overhead over the entire taxed population, artificially lowering the corporation's cost of doing business at the expense of all those who do not consume its products - e.g., while you can fairly argue that Dell doesn't pay taxes, the people who buy its products do, that nonetheless has the net positive that ONLY the consumers of Dell's products are paying those taxes. 

Good enough, but not quite jiving with my idea that government has no place in the financial contract between consumers and businesses.  It amounts to a backdoor taxation of the consumer with the consumer having no idea how much the purchase price is benefiting government. 

It's a piece of the gigantic puzzle we are never allowed to solve:  How much do we as individual really pay in taxes?

Which leads to my orignal point that only people, be it an individual or a targeted group made up of people, pay taxes.     

[thundley4]

Of all the major companies which it has been known, as taking advantage of these recently introduced tax havens.  I'm unaware of the auto makers being among them.

Most of the American car manufacturers also have subsidiaries, or part ownership in companies in Europe and Asia. To think that they have not taken advantange of some of the same tax loopholes is ridiculous.

Dems tend to call any and tax breaks, loopholes.