Currency controls (taxing money movements out of a country) have serious problems. Foreign investment would dry up because they won't want any profits or capital gains taxed on exit. Domestic firms will suffer a severe penalty on trying to invest abroad, giving foreign companies that can a big competitive advantage. Buying foreign stuff would become more expensive, so the cost of foreign made goods would shoot up, also the cost of imported parts and commodities for local industries would rocket, killing domestic industry competitiveness. You'd have to also tax assets and goods moved abroad because otherwise people would buy stuff locally and sell it abroad as a tax dodge. Basically your whole economy would become massively distorted.

If you want corporations acting in the public good, form Public Benefit Companies[1]. Until then, there is no reason to sacrifice shareholder confidence or profit potential to make the world a better place.

[1]: https://en.wikipedia.org/wiki/Public-benefit_corporation

Seems like that's a proposal that's trivial to exploit, I can think of at least a couple of ways off the top of my head: shell companies funds-shuffling, related companies wash buying/selling, etc.

Adding in another market distortion isn't going to help matters, you only create opportunities for people to game the system in an ever increasing effort to explore the law of unintended consequences.

Those funds are held (usually) as US Treasury securities, or are at least hedged against any local currency risk, much the same way that any sovereign maintains a certain amount of foreign currency reserve.

The most direct way to solve this issue is simply to say that profits earned in foreign jurisdictions are free from US tax. That's effectively what the British do and it's worked well for them vis a vis tax policy.

The second most direct way to solve this issue is to offer reduced taxes for profits earned overseas. This encourages an export-driven economy because funds earned overseas are taxed less than funds earned here.

The "problem" that everyone seems to be solving is: how do we enable the government to take the money of these evil corporations?

That's the wrong goal.

The best strategy is to align the goals of the country/people and the corporations. We haven't done that for a long time.

I'm not suggesting taking money from "evil" corporations... only in that money made in a locality should be taxed in that locality... getting rid of corporate 'income' taxes in favor of tariffs/vat and money exports would allow for that, with less opportunity for subverting the system, so to speak... At the end of the year, a tax refund could be given if you're a person, and transferred less than 100k out of the country.

It could be a much simpler system, with less bureaucracy needed. There are other possibilities as well. Right now, many corporations are holding onto funds, which doesn't help any economy, and worse, shifting those funds to holding companies to avoid taxes... What I'm suggesting would punish holding onto assets and encourage activity domestically... foreign goods will always be needed, and as such taxes would apply. VAT systems happen in lots of countries.

What makes you think that taxes aren't already being paid in the foreign jurisdictions?

This is a big part of the disconnect: if you (say, as Apple) sell a phone in Munich, you're paying the VAT tax in that country already.

Generally speaking, when you take the profits from your German sales back to the USA, in many (most, save a few exception) cases, you're going to pay corporate taxes on those profits now that they are repatriated back in the USA. So companies are incentivized to keep those profits in overseas jurisdictions to defer the US tax and reinvest in their overseas operations. Considering how much of their actual sales come from overseas, it's no wonder that they pursue this strategy.

EVEN IF a company wanted to be a "good US corporate citizen" and pay more taxes to the government, they'd be at a financial disadvantage to overseas companies doing business in the USA because THOSE companies DON'T have to pay tax on their overseas profits. That's why you see all of these companies set up in "corporate tax havens" that don't tax a single penny of offshore income. For one thing: it's damn easy to do international business through these companies because you effectively have a neutral ground from the perspective of finance. For another: you save money on taxes, allowing you to offer better terms to your customers and partners.

This kind of stuff only matters to the biggest corporations with multinational operations because the regulatory minefield associated with keeping track of laws and regs in lots of different countries is a nightmare and only a few top accounting firms have the talent to master it. Another reason why the law of unintended consequences shifts the tax burden to the little guy: he's not big enough to care about shifting his income overseas. When you create incentives by way of regulatory/tax arbitrage, you make it worth the while of a big multinational to invest the time and effort structure their deals so they take place in offshore jurisdictions.

This isn't money earned over seas, it's money earned in the U.S. then shifted overseas... Results from a few simple searches. Yes, it does only matter to the largest corporations, and investment firms which account for a huge percentage of wealth that further stretches an imbalance in property/wealth where fewer than 100 people have more than half the world's population combined.

I'm all for being able to make insane amounts of money, but there are limits to what is good for greater society and having underutilized holdings overseas for the simple purpose of tax avoidance isn't good for anyone. The money isn't being invested to earn more, and it isn't being spent to improve the economy. It's wasted in a corporate setting.. it should be re-invested, spent or dispersed to the share holders, who should then pay income taxes (baring a VAT/tariff system in place to replace it)

http://www.nytimes.com/2013/05/21/business/apple-avoided-bil...

http://motherboard.vice.com/read/apple-avoids-60-billion-in-...

http://arstechnica.com/business/2015/10/apple-google-microso...

This is incorrect: "Corporations are meant to serve the public good by encouraging investment and limiting liability of investors not involved in decision making" Corporations are meant to do one thing, make money for the share holders at any cost, by not breaking laws or not being caught breaking laws (or rewrite them). Corporate behavior today reflects this.

The key to improving investment is to prevent corporations from moving their wealth to offshore hideaways. The government must ensure that corporations better serve the public good, because many corporations receive multiple benefits from government: reduced taxes (too many), human resources & infrastructure (to name a few)

The comment you replied to isn't saying that all corporations serve the public good, it is saying that the grant of limited liability only makes sense if corporations in general end up being beneficial. If they aren't beneficial, we should stop granting investors limited liability.