Originally published at: http://boingboing.net/2016/12/09/apples-tax-dodging-offshore.html
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In the 50s corporations paid 30% of taxes, by the 70s it was 20% and now it is 2%
The rest is all passed on to the suckers who pay. And the Double Irish, Dutch sandwich is not just Google or Apple
it is pretty much most of the large multinationals who have the accounting sophistication - forget patriotism the allegiance is to the bottom line. Although small business employs a lot more people and is not sophisticated enough to play this game.
Just reading Treasure Islands which estimates that something like $29 trillion US is hidden in
offshore accounts and it is not just corporations, or rich individuals or organized crime, it is governments (in fact one of those treasure islands is Manhattan because the US allows foreign corporations to do the same.
The Elf affair in France was a real eye-opener for French investigators because it shows just how much money was kept in slush funds in Gabon for decades of various French governments to use (both left and right) when they wanted to pay someone off or supply arms etc. And of course the losers there were the various citizens of those African post colonial countries whose resources were stolen while they lived in poverty. As they say the British and French left the colonies via the front door but came back in through the side window.
Another interesting factoid (maybe this from a Freakonomics) podcast about cash is that the current estimated amount of US currency is $1.5 trillion and while in the 70s something like 20% was 100 dollar bills, now it is 80%. How often do people use a $100 bill? The implication here is that is easy to carry in briefcases or pallets etc for various illegal tax avoiding transactions.
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I’m not sure what the outrage is. Treasury bills are patriotic; if you don’t want people buying them, then work towards a balanced budget.
The off-shore funds, while totally legal, should not be rewarded with a tax holiday. But that’s a totally separate matter than where they are invested.
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Anybody who buys T-Bills is effectively subsidizing the American Government, not ripping it off.
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I took Economics in high school, and it’s been a while (Tiffany was on the charts), but wouldn’t a balanced budget include debt? E.g. “We needed to spend $500M, we had $350M and issued bonds to cover the rest.” As opposed to “We needed to spend $500M, and we did just that, in spite of having only $350M” which (I guess) is a deficit?
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Well, do you want an OLED touch bar? Or do you want usable roadways? That’s what I thought. Now kiss the Apple Watch, serf.
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Yes, debt and deficit are two different things.
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OK. I just thought it was possible to have debt and a balanced budget.
Like I said, it’s been a while, at which time I was most certainly distracted.
(Yeah, yeah, I know, “LMGTFY”…)
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The government is starving because Apple… invested in the government?
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Yeah, I was saying you’re correct.
Running a deficit is when debt exceeds revenue.
ETA: And in fact, the various incarnations of our US national bank system have used debt was a way to increase revenue. There’s a lot more to it than this, but the simplest example is that creditors can, in certain cases, be taxed on debt. That’s one of many ways debt is an essential part of the economy. Deficit is trickier. It’s generally not a benefit, but it only becomes dangerous to the economy if markets begin to respond as though the US government might default. That’s never happened, but the tax plan Trump laid out during the election would, if adhered to, lead to a deficit that can’t be balanced, and then markets will begin to abandon the US dollar.
That’s not speculative. It’s happened several times to national governments throughout history past and recent. And unlike Greece, we won’t have the EU to bail us out. Unless Congress forces the incoming administration to amend its tax plan, or the administration does it on their own, the results will be very bad for Americans indeed.
Corporations and the ultra-rich will be able to stave off the crisis longer by also abandoning the US dollar, but that will accelerate the floor falling out from underneath the world’s biggest economy, which will, in short order, knock over the others like dominoes. Hopefully someone can get it through Trump’s head that his family’s fortune will eventually succumb too if he goes through with his road-map to causing a global depression. Otherwise we are good and truly up Shit Creek without a paddle.
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Maybe starving is a strong word, but the gov’t is required to pay Apple that money back with interest, no? Last I checked, the gov’t isn’t giving me my tax money back with interest…
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Right, but in the meantime, Apple’s buying Treasury Bills, so they’re quite literally paying the US government a whole ton of money to buy bills that pay back with interest over time. Seems mutually beneficial, but I’m no tax advisor, so what do I know?
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“Seems mutually beneficial” — seems being the key word. Any scheme that is so totally profitable to a single corporation is almost certainly corrupt. How long is it going to take for us to learn the lessons that George Orwell was trying to teach 70 years ago?
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More than 70 years, apparently…
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A minority of Americans somehow managed to elect someone to the Presidency that the vast majority of the country doesn’t want in office, but we have no recourse. Perhaps the 1/4 of the country who chose an Orwellian government can answer that question?
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It is. If you’re running a balanced budget, you’re not ADDING to the debt, but the debt is never going to be paid off completely. Nor should it be - you’d have to cut every social program, and raise taxes to astronomical levels, and even then you’d never have enough money to pay off the debt entirely (since people would just start working off the books, as was/is the case in Greece).
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Yep, you and @GulliverFoyle are right, and it was a conscious distinction I made when I posted. I wanted to talk in pragmatic actions - the first step to no debt is to commit to a balanced budget. Then you can lower the debt.
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… more about economics than Cory Doctorow…
My main takeaway from Economics was to stock up on physical gold, except gold’s too expensive, so buy silver. That way, when inflation is so high that we’re like the Weimar Republic (at least as the economics teacher described it to us), we can simply go turn in one of our gold or silver bars and buy dinner.
However, this presumes two things:
- That if things ever reached such a point, I wouldn’t be shot, and my carcass eaten, when I leave the house, and
- That the photographic process which makes silver so valuable will not be replaced by something better in the early 1990s or so, and that that process won’t be rendered obsolete by inexpensive digital photography.
Long story short I do not own any precious metal bullion (I may have some old Knorr bullion though).
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The rich and stupid think that they can avoid the crash. Not sure how due to the dollar being the “standard” for now. If it collapses, then everything else falls as well. Time to start reading up on how to grow my own food.
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