Fascism is the union of government with private business against the People.
"To The States, or any one of them, or to any city of The States: Resist much, Obey little; Once unquestioning obedience, at once fully enslaved; Once fully enslaved, no nation, state, city, ever afterward resumes its liberty." from "Caution" by Walt Whitman

Friday, March 14, 2014

"Debtor nation: Americans pay interest on $163 billion held by top tech firms overseas"

2014-03-14 from "RT News" [http://rt.com/usa/google-microsoft-debt-offshore-710]:
United States taxpayers make large interest payments to the top four technology firms for the $163 billion in US government debt the companies own and shelter in tax-free offshore accounts.
United States taxpayers make large interest payments to the top four technology firms for the $163 billion in US government debt the companies own and shelter in tax-free offshore accounts.
Apple, Cisco Systems, Google, and Microsoft legally hold $124 billion in US Treasury securities and $39 billion in US government agency debt in accounts overseas, allowing them to avoid the 35 percent (maximum) corporate tax rate in the United States, according to Securities & Exchange Commission reports.
Together, the companies would be the 14th biggest overseas holder of Treasury securities, just ahead of countries like Norway, Singapore, and India.
“If a US multinational puts its offshore cash into a US bank and uses the money to buy US treasuries, stocks and bonds, those funds ought to be treated as having been repatriated and subject to US tax,” Sen. Carl Levin, chair of the Senate permanent subcommittee on investigations told the Bureau of Investigative Journalism.
Combined, the four top technology giants have $255 billion in “cash, cash equivalents, and marketable securities…in their foreign subsidiaries,” the Bureau of Investigative Journalism reported [http://www.thebureauinvestigates.com/2014/03/12/apple-and-microsoft-among-us-tech-giants-reaping-interest-payments-on-offshore-cash/?_ga=1.211368981.187311748.1394745580].
If that total amount was held onshore, making it subject to being taxed by the US government, it would yield $89 billion – or 17 percent of America’s projected $514 billion budget deficit this year.
Overall, the companies hold $333 billion in domestic and foreign accounts, making them the most lucrative American firms outside the financial sector.
The companies also hold $93.3 billion of corporate, municipal, and sovereign debt.
“This is a ridiculous situation," said University of Michigan professor of law, Reuven Avi-Yonah. “The result is US taxpayers pay interest on this money as opposed to the government receiving taxes. Bringing this cash onshore and taxing it at 35% would significantly help reduce the annual deficit of the US government.”
Cisco Systems, which holds $40.4 billion in cash in foreign subsidiaries and has $27.8 billion in Treasury bonds, was the only firm to respond to the Bureau on the subject of debt held offshore.
“Cisco pays all taxes that are due. The cash held in Cisco’s non-US subsidiaries is generated from Cisco’s international operations. Cisco has approximately 50% of its employees outside the US and Cisco’s sales are approximately 50% from non-US customers,” Cisco said.
“US government obligations have long been one of the most stable investments in the world. The US Congress long ago enacted laws to promote investment in the US by individuals and businesses overseas, including non-US subsidiaries. Any interest income that Cisco receives on its U.S. government obligations is US taxable income to Cisco.”
Microsoft, which holds far more in US securities ($64.9 billion) than the other three, said it “complies with the tax rules in each jurisdiction in which it operates and pays billions of dollars each year in total taxes, including U.S. federal, state, and local taxes and foreign taxes.”
Apple, with $111.3 billion in foreign subsidiaries and $44.5 billion in US debt, did not address the issue, but said it also follows US tax law.
“We not only comply with the laws, but we comply with the spirit of the laws. We don’t depend on tax gimmicks. Apple carefully manages its foreign cash holdings to support its overseas operations in the best interests of its shareholders. Apple pays an extraordinary amount in US taxes.”
Twenty-six of the most powerful American corporations – such as Boeing, General Electric, and Verizon – actually paid no federal income tax from 2008 to 2012, according to a recent report that detailed how Fortune 500 companies exploit tax breaks and loopholes.
The report [http://rt.com/usa/low-corporate-tax-rates-275/], conducted by public advocacy group Citizens for Tax Justice (CTJ), focused on the 288 companies in the Fortune 500 that registered consistent profit every year from 2008 to 2012. Those 288 profitable corporations paid an “effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate,” CTJ stated.
The non-profit group said this lax taxation climate among the most powerful US corporations comes amid an aggressive push by lobby and trade groups on Capitol Hill “to reduce the federal corporate income tax rate, based on the claim that our corporate tax is uncompetitively high compared to other developed nations.”
While the US corporate tax rate is technically the highest among Organization for Economic Cooperation and Development’s 34 member countries, the US Congressional Budget Office found two years ago that the total corporate federal tax amount paid by US companies came to 12.1 percent of profits, the lowest total since 1972.
Besides offshore tax sheltering, CTJ said the companies are allowed to skirt tax rates based on factors that include accelerated asset depreciation based on continued investment, stock options, and industry-specific tax breaks.
On Wednesday, Bloomberg reported that the 317 largest US-based companies have $1.95 trillion held outside the US, an increase of 11.8 percent from last year.

No comments:

Post a Comment