🚀 go-pugleaf

J. Clarke <jclarke...@gmail.com> writes:
> "Reverse inversion".  What's "spurious" about it?  US corporate taxes
> were ludicrously high--they are less so now but still US companies are
> taxed on foreign sales at a much higher level than non-US companies.

starting in 80s, large companies started to create separate subsidiary
corporations where they could book profits. posterchild were airlines
where they set up ticket selling as separate corporate subsidiary.
Airline operations (with 90% of employees) were operating at break-even
or loss ... and all the profit was booked in the ticket sales
corporation. airline operations could be operating at substantial
loss, even tho the parent company was operating at substantial profit
(ticket sales where all the profit was booked more than offset
losses). Later they could even declare bankruptcy for airline operations
and dump the employee pension plans on the gov.

after turn of century, congress seemed to further loosen definition of
separate corporation.  posterchild is large US equipment maker that
manufactures in the US, sells and delivers to companies in the US. They
sent up a distriborship in country where they have negotiated trivial
tax rate. They transfer the (made in the US) equipment to the offshore
distriborship books at cost, which then "sells" to US customers. All
profit is booked in the offshore distriborship even tho equipment is
made in the US, sold to US customers and delivered to US customers.

even tho corparate tax rate was 35%, many large US corporations are
paying 5% or less (or even declaring loss) ... so effective overall
corporate tax revenue was more like 11%.

Gimmick hasn't only been used in US. Many countries have found that
Apple has sent things up that tax revenue as percent of sales in that
country is small single digits (foreign sales issue is mostly
obfuscation and misdirection).

Apple's $85 million tax bill is a fraction of its almost $8 billion
revenue
http://www.smh.com.au/business/the-economy/apples-85-million-tax-bill-is-a-fraction-of-its-almost-8-billion-revenue-20160126-gmej0z.html

Apple paid $85 million in Australian income tax last year, despite
making almost $8 billion in local revenue, accounts filed with the
corporate regulator show.

...

Apple's double Irish

Apple has been accused of using a "double Irish sandwich with Dutch
associations" structure that allows it to route profits through Ireland
and significantly reduce tax.

... snip ...

aka 1% ... process regularly used around the world.


.....

posts mentioning tax evasion, tax havens, tax avoidance
http://www.garlic.com/~lynn/submisc.html#tax.evasion

lots of leaks ... but not solely limited to tax evasion, tax
advoidance, etc
https://www.icij.org/
luxembourg
https://www.icij.org/investigations/luxembourg-leaks/
panama papers
https://panamapapers.icij.org/
paradise papers
https://www.icij.org/investigations/paradise-papers/

recent GE references:
http://www.garlic.com/~lynn/2018.html#19 In Praise of Hierarchy
http://www.garlic.com/~lynn/2018.html#108 GE's $31 billion pension nightmare

financialization destroying US corporate culture starting late 70s &
early 80s
http://www.garlic.com/~lynn/2018.html#25 Trump's Infrastructure Plan Is Actually Pence's--And It's All About Privatization
http://www.garlic.com/~lynn/2018.html#52 How a Misfit Group of Computer Geeks and English Majors Transformed Wall Street
http://www.garlic.com/~lynn/2018.html#104 Tax Cut for Stock Buybacks