To Understand the Benefits of Tax Reform, Start by Understanding Apple's Taxes

Re:To Understand the Benefits of Tax Reform, Start by Unders... by darawk on Thursday November 09, 2017 @11:17AM (#15663600)

I'm totally for the spirit of your comment. However, taxing borrowing in general seems like an odd move to make, no? Wouldn't that put an undue burden on people who are just borrowing funds legitimately? What's particularly pernicious about the tax avoidance structure you described is that it doesn't seem like there's an easy way to create a rule that captures that case and doesn't ensnare ordinary businesses. Maybe i'm not understanding your point fully though.

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by cletus on Thursday November 09, 2017 @11:41AM (#15663808)

My point was that each $1 borrowed could be treated as repatriating $1 of foreign profits. Companies already report foreign profits and the IRS can discriminate between foreign and domestic profits.

So this wouldn't be taxing borrowing. If you had no foreign profits then you pay no taxes. The point here is that companies borrow are near-zero interest rates because it's MUCH cheaper than repatriating profits and paying 35% tax on them. I can't blame them for that either.

What I'm saying is that borrowing in lieu of repatriating profits basically is repatriating profits and should be taxed as such.

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by valuearb on Thursday November 09, 2017 @03:28PM (#15665620)

Repatriation is the only thing preventing us from losing every large multinational corporation. Other countries corporate income tax systems are so much more attractive to companies and investors already.

Just stop taxing corporate income, it’s a corrosive tax that makes us poorer by driving off investment.

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by darawk on Thursday November 09, 2017 @02:11PM (#15664982)

Ya, but I guess what i'm wondering is how you distinguish between a company who has 'legitimate' foreign profits and a US subsidiary that's taking out a legitimate loan vs. taking out a loan to avoid repatriating profits.

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by cletus on Thursday November 09, 2017 @02:29PM (#15665156)

Why should there be a difference?

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by valuearb on Thursday November 09, 2017 @03:34PM (#15665655)

Why should any multinational base itself in the US under your proposal. Apple could shift HQ to Ireland or China or France or even Germany and net tens of billions a year more.

Apple doesn’t need to manufacture in the US. It doesn’t need to base most marketing/sales/finance in the US. It could leave just software and design in CA, and honestly report far lower US profits, and it wouldn’t owe the US another dime on foreign profits.

In fact, given 2/3s of their profits are international, they should do this now. Why pay the US an additional $10B a year in taxes on computers and phones made in China and shipped everywhere but the US?

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Re:To Understand the Benefits of Tax Reform, Start by Unders... by darawk on Thursday November 09, 2017 @03:22PM (#15665579)

Well, if you don't distinguish...then you're just taxing a company who has a foreign subsidiary and takes out a loan. Which seems sort of arbitrary, no? You wouldn't want to tax that across the board for the same reason that you don't tax loans generally.

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