I'm not saying they shouldn't be allowed to move no matter what. I'm saying that if they decide to, they should not get a free pass to generate business cost free in the former country. Again it's not quite that simple, but companies do this to dodge taxes plain and simple. If they want to keep making all their money in the home country they should pay the taxes, or at least a comparable rate. Allowing companies to do otherwise is just fucking yourself over out of a severely misguided stance of freedom and economic values.
Its not, I believe in the free market, I don't believe the socialistic perspective you do. You believe companies owe something to the area they are in, they deserve to pay something for their success. I simply believe they can't abuse their workers and they can't damage the environment.
This is what pisses me off. How the fuck is this socialism? How is not letting people skip out on taxes they don't feel like paying socialist? This is what annoys me to no end. Don't have an argument? Just call someone a commy. Hell, it worked in the 1960s. I mean goddamn, it's gotten to the point where doing anything sensible is anti-patriotic. Sorry to seem kind of aggressive there, but lazy accusations of socialism and communism have gotten really fucking tiresome.
Ok, let's dial it back to a dull roar. If this becomes monkeys flinging shit in the zoo, you're going to find out I have more shit to fling than most monkeys. In other words, play nice. Otherwise, I'll be forced to pull this car over. I like this thread very much, and I'd like to keep it around.
Let me ask since Im not that knowledgable about taxes. Aren't personal incomes taxed as well as corporate profits? If a company sets up a shell headquarters overseas but the work force is in America, we still get the workers income tax no? It seems the crux of the debate though is how much does a locality think is proper to tax a company? Wouldn't the fact that companies are fleeing be a sign that taxes are already getting too high? At some point you see diminishing returns. Look at Hollywood and how California's taxes have pushed movie studios to do work almost anywhere but Hollywood. Even their new governor has mentioned something needs to change to draw back business to the state. I agree with toddamus in the respect that I don't think a locality should have some inherent claim on Corporate taxes, at least not some ridiculously high percentage. You don't want companies in your town just because you want an engine for tax revenue. You want them in your town because they can provide incomes for the workers which drives the local economy.
Yes, they do try to dodge taxes, and that's human nature. In most cases, people will try to maximize the benefits of their work while minimizing their costs to perform that work. The problem in the entire system is not the fact that companies don't "play fair" by moving offshore to minimize their tax burden, it's that the powers-that-be never recognize that there is a human component that reacts to the laws they pass. Congress is by far the worst about this, but it goes for state and local governments too. The fact that Congress passes laws and expects everything to remain the same has baffled me for years. Many of you are too young to remember the luxury tax Congress passed in 1991 which ended up being the downfall of GHW Bush. Congress honestly thought that increasing the price of yachts over $100,000 and cars over $30,000 (!!!), among other items, would have no effect on the sales volume of those goods and they would magically collect an additional $9 billion annually in taxes. It only served to kill the luxury boat business and put many middle-class workers out of their jobs. When a corporation sees that it can reduce its tax burden by changing its address, if it is economically viable to do so, then it would be foolish not to. Chasing those companies down and trying to penalize them to recoup the lost revenue typically results in not achieving the desired effect and creating a host of unintended consequences. Congress is so short-sighted that they will likely never realize that the best thing to do is maximize the volume of business and take a lower cut rather than trying to squeeze every last penny out of existing businesses. I have no love for big corporations, but we need to deal with the reality of the situation and understand why these things happen. We'll never change human nature by passing more laws.
One thing countries could do is require that any company doing business there have a locally chartered corporation that is held to the taxation standards of that country. Thus, you effectively never have a foreign corporation doing business and all revenue generated in a given country be taxed to that country. So Apple would pay American taxes in America and Chinese taxes in China, etc and the headquarters of the company would be considerably less relevant since it would basically have an HQ in every country. The ramifications of that, I would assume, would be both huge and filled with unintended consequences, but it would be interesting to see for sure.
A few things on taxes: - American taxes are not high relative to the rest of the first world. I know a lot of pundits like to pretend it is, but it's not. That's not to say you can't find a slice somewhere that is high, but on the whole it isn't the case. You also can't just look at rates and ignore write offs. - This baseless stance of getting more total tax revenue every time time you reduce taxes is bullshit. American history does not support this whatsoever. No it isn't. Let's say I'm a country of 3,000 people. Why not let Wal-Mart come over and pay a 1% rate because fuck it, it's a lot of money to me. Not what happens, but just using an extreme example here to show it's not that simple. i Sometimes yes, but recognizing the obvious human components was kind of what I was talking about. Consequences like them paying for their taxes? What unintended consequences? Hell, bring on the consequences. I'm not talking about squeezing every penny. I'm not sure where you go from 'pay the rate other companies pay' to 'bleed them dry for every last cent'. What do you mean by deal with the reality? Why are you talking about changing human nature? I'm sorry, but I'm really missing what you're trying to get at here. Don't make them do it because they don't want to? I'm sure they would like to pay exactly zero taxes. Throw up our arms and let it all go? And let's step outside corporations for a second here. My uncle makes over 3 million a year. He pays a 10-12% tax rate in evil commy California. I pay more 3x that rate and make significantly less. Why exactly? Yes, he's paying more total, but it's still absolutely ridiculous. I don't know how people ever expect to pay off this debt when we keep slashing taxes for the rich. At 27 I'm sure I'll still be paying it in my 80s if I live that long. People also like to peddle 'trickle down' economics and other assorted crap to justify this stuff and it just doesn't add up. The top 1% saves a much larger portion of their income than the lower brackets who pump that money back into the consumer market. Sure the rich like to spend, but they like to hoard too. We've had rates that were more in line with other tax brackets before and somehow the country managed to not implode...
I actually did read the strip before commenting. There was some good stuff about how the bill is being written in secret and possible stifling effects on the internet, but mostly it was "corporations bad, taxes and government good" leftist tripe. And the economics were way off, and a bit nationalistic. It was hilarious how it mentioned stimulus as a way to create and preserve jobs during a financial crisis, and that the stimulus bill created or preserved around 2 million jobs, but wasn't enough. The stimulus package, supported by Barack Obama and George W. Bush, was over $700 billion! (Per Wikipedia, it ended up being over $800 billion.) For 2 million jobs! That right there should illustrate the folly of stimulus policy. And where did the money come from? More debt with these countries. That's cognitive dissonance. We can't run a trade deficit, but it's fine to borrow $1 trillion per year in perpetuity. You used the power companies in California as an example of the free market? Electricity generation and distribution in this country is far from free market. It is heavily regulated by state governments at the least. In many places it's entirely government run. And to this discussion about corporations dodging taxes, maybe the tax rate is too damned high? Lower taxes and make it easier to start and run a business, and there will be more business creation in this country and fewer businesses will leave the country. That's a much simpler, and more just, solution to the problem.
You should pay a lower rate, there's no doubt about that. But fixing that problem isn't done by raising his taxes, it's by lowering yours. The government debt will never ever be paid, and no attempt will ever be made to pay it. The only way the debt will ever be cleared is by government defaulting on the debt, which it should hurry up and do.
No, it absolutely shouldn't do that. Any hint of default will cause Russia and China to dump bonds onto the market and crash the American economy literally overnight, except it probably wouldn't even take that long. The world wide economy would never ever recovery from it.
Maybe it will, maybe it won't. I don't find it hard to believe neither of us will live to see it, but it's worth pointing out that after WW2 we were in a comparable debt relative to the GDP and for the most part it got paid off. I don't think taxes should be as high as they were then, but doing shit like slashing them in the middle of two fucking wars isn't the smartest long term decision making. [On an unrelated note I also find it funny that the people who want to dump more and more into the military are the same people who insist on not paying for it, but that's another story.]
Of course it would. The people in America and their economic needs wouldn't disappear nor would the rest of the world's. Government borrowing and lending is a burden on the economy of the world, not a benefit. Dropping it would be great. It might actually bring some fiscal sanity to the world's governments for a few years before they went mad and started borrowing and lending again. During those few years maybe something really good could be built. I'm getting misty eyed thinking about it. It's almost utopian. The American government couldn't finance our giant military industrial complex. They might have to stop engaging in pointless unjust wars all over the place. Trade would be a real thing, not these phony arranged trade agreements. The financial system and stock market might gain some sanity as well. Basically, the bubble would pop. But bubbles always and inevitably pop. And that's a good thing. The popping is what rights the economy. It's the solution to malinvestment and waste, not the problem.
Edit: Ok, instead of being a dick... I never said electricity was a free market. It was trying to 'free up' the market that was the problem in the case I illustrated. The idea of just lowering taxes until there doesn't exist a country on this Earth that could lower them further is just utterly unrealistic. We have to build infrastructure for 300 million people in this country, you know, so they can do business and all that cool shit. In Iceland they do not have to build Infrastructure for 300 million people. They could easily charge a way lower rate than we ever could here if it meant sucking up revenue from huge multinationals. And that is the last time I'm throwing out an example like that until someone can explain to me how the case is otherwise.
I did. I understand that taxes in the US are not high compared to other European countries, but just saying that doesn't make it OK. I don't care if taxes are high or not compared to another country, taxes are high in the US. And taxes are higher than most people say because there are so many different taxes levied by our hugely complicated tax system. And at many levels. But even if I concede that corporate taxes here are in line with many other countries, it doesn't mean all of them. And smart businesses will find those with lower taxes or more legal loopholes, and go there. It's in their nature. And if those nations are smart, they will court those businesses to get the tax revenue. I don't see how you've given a viable solution to this "problem" at all. You just propose more control, which is what causes the problem in the first place. Edit before you mention gutting the American revenue system or abandoning social programs or bridges collapsing whatever. Keep this in mind, for all of their inefficiencies and fraud, the American social system is the largest in the history of the world. And the American government itself is the largest and most powerful and richest in the history of the world. It's not hurting for money, and giving it more is too much.
Heres what your "Utopia" would be like: -An immediate crash of the bonds market, the stock market will soon follow. There will be a slight uptick in the commodities market, as tangible assets are typically inverse markets of stocks and bonds. But that will bevel, and then crash, taking the Asian-Pacific market with it. The stock market crash, which usually pushes up the bond market, will not have the same impact since the dollar's value becomes incredibly deflated. -A domino effect is started. Investors start pulling their money from investment banks. Assets go toxic within a week, Bankers cannot sell them off. Mortgage values plummet. Commercial banks react by hiking variable interest rates beyond historical highs. People cannot pay, and lose their homes. The boomerang effect on commodities causes agricultural production and raw materials harvesting to halt since the current assets of goods cannot be offloaded. Prices increase to counteract the debt. Gallons of gas go north of $15 dollars within a month. A gallon of milk will hit around 10 dollars. Grocery stores are cleaned out. -International commerce drags. Higher fuel prices cannot be afforded by global shipping companies. The assets held by the intermediaries starts to deteriorate within 30 months, no one is buying it up. -Without daily necessities, money in the bank becoming nearly worthless in the current climate, and people losing their jobs due to the ripple effect throughout the economy, crime rates will skyrocket. Wars breakout across Asia over natural resource reserves. The EU and Russia both crash. China could hang on a bit longer by turning their industrial production inward, but their economy is heavily reliant on the demand of the west for their enormous supply. Without that, they are overburdened and people begin to starve. This would not right the economy in any forseeable future, the economy would revert back to something similar to the industrial revolution era. If that sounds like something you're into, go live in Greece for a month and report back. They're about to go through a small version of it.
So according to that, Americans pay 36% of all of their income to government at different levels. That's a pretty high tax rate to me. Note the unfunded liabilities at the bottom of $97 trillion. This is a main reason the bubble will pop eventually, no matter what stimulus measures are taken. Some estimates of unfunded liabilities actually reach $200 trillion. Ending government programs entirely, or defaulting on payments, are the only way out of that mess. Since we live in the real world, default is the only possibility. So you can think like Juice and that it will be misery like the world hasn't seen, or like me and think there will be pain, but at least a temporary return to sanity afterword. The non-government debt is disturbing as well.