Microsoft, Boeing Among Corporations With Billions Stashed in Offshore Tax Havens

Comments

1
Talk about Class Warfare... corporations & their politician friends have really pulled out the big guns in the last few decades. The rest of us? Cannon fodder.
2
Boeing doesn't need as much wealth in offshore tax havens when we have the WA legislature practically providing one here!
3
they dodge taxes because they can. and because they can, if they didn't, they wouldn't be meeting their obligations to the shareholders to maximize profit.

its a neat trick.
4
I want to point out that while we should be taking a hard, hard look at all of these practices, one of the legitimate reasons for having an offshore subsidiary is to conduction major international business. Many of the companies listed do such things.

To stem the tide of the lazy who will cry "SHILL SHILL SHILL" we should read deeply and investigate these closely before making a full judgement rather than relying on a poor summary from The Stranger.
5
@4, there is no need for long hard looks or reading deeply and investigating closely. We (and you) know exactly what's happening and why, and it isn't to "conduction" (sic) international business.
6
@4 Feel free to present your book report on this to the rest of the class on Monday.
7
I'm shocked, SHOCKED, I tell you!
8
The Oxfam study is idiotic. It's clear that nobody involved in its creation knows anything about accounting or tax law.

They multiply accounting income by 35% and then claim that the difference between that and the company's effective tax rate is proof that the company is nefariously dodging corporate income taxes. That's not how taxes work. There are many reasons why a company's effective tax rate will never be equal to the corporate rate, such as loss carryforwards, differences in depreciation calculations, deferred income and expenses, etc. By their logic, you're a bad person if you take any exemptions or deductions on your personal taxes as well because your effective tax rate is also a lot lower than your paycheck times the statutory rate.

"Money Held Offshore" is effectively "any cash held by a foreign subsidiary". For example, Starbucks "stashes" cash in dozens of countries by virtue of operating cafes in those countries. Foreign earnings are generally taxed in the country where they are earned because that's how corporate taxes work in just about every other developed country. The US's worldwide tax system gives companies no incentive to return their foreign earnings to the US because they'd just have to pay taxes on the same earnings again (I know there are deductions for foreign taxes paid, but Ofxam would complain about that as well).

Offshore subsidiaries are bad because, well, they are. The study assumes that any foreign subsidiary not large enough to be disclosed in the 10-K is probably being used for evil. While it is true that offshore subsidiaries can be used by companies to effectively move cash around (intercompany loans, licensing of intangible assets, management fees, etc), but there are plenty of benign reasons as well. Companies generally do have to pay some taxes on cash generated by those subsidiaries if they actually want to use it.

The surest way to get US companies to bring their foreign earnings back home is for Congress to adopt a modern territorial tax system. If you hate tax accountants and corporate lawyers, you can take comfort in the fact that this would have the added effect of putting a whole lot of them out of work.