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from the luxembourg-shuffle-fulfilled-by-amazon dept.
In 2012, something like US$80 billion worth of multinationals' profits worked on their suntans in Bermuda, according to an international report into profit-shuffling and tax avoidance.
Oxfam, the Tax Justice Network, the Global Alliance for Tax Justice, and Public Services International have put their heads and wallets together to fund a report into how multinationals are picking the pockets of G20 nations.
In one way, it's no surprise: the world's top economies are, pretty much by definition, the places where multinationals will make the most money. However, they also have the best resources to try and get companies to pay their taxes, and if the Oxfam et al report is accurate, they're getting gamed hand-over-fist.
The report says just twelve countries (the USA, Germany, Canada, China, Brazil, France, Mexico, India, the UK, Spain and Australia) account for 90 per cent of US multinationals' “missing” profits.
Those profits get processed through various implementations of the “Irish-Dutch sandwich” to be booked in low-tax countries like the Netherlands, Ireland, Luxembourg, Switzerland and Bermuda.
If the numbers are accurate (the report's authors put a number of caveats on the data), then between $500 and $700 billion gets shuffled around in this way, which is how Bermuda found itself home to $80 billion worth of profits in 2012 (its GDP in the same year was a paltry $5.47 billion).
(Score: 2, Insightful) by khallow on Thursday November 12 2015, @03:13PM
The problem is a large portion of the western world, especially the U.S., believe that the government is the enemy, and companies are your friend.
How is that a problem (assuming there are people who think corporations are friends)? It continues to amaze me how people can be so concerned say about Google's low grade data collection on its customers because it is an evil corporation while ignoring the far more intrusive and prevalent spying by the NSA. It's like they don't even know what power is. As a US citizen who sees things like NSA, ATF, or the EPA play their games, why should I be more concerned about a multinational who is simply avoiding paying some taxes? Especially when I'm not a big fan of paying lots of taxes either?
The problem is the natural state of companies is to coallese into enormous multinationals that we have to deal with. And while there are the anarchists who go round burning down cafes, they are few and far between, there is a middle road between the idiots on the one side and the idiots on the other. It's not even a fine line.
The answer is business creation not let's dig the hole deeper by passing regulation encouraging further multinational buildup. The key characteristic of any oligopoly is high barrier to entry.
My local independent cafe owner - with 1 store - pays more in tax that Starbucks - with 800 stores. That's not right. The solution isn't to remove the tax the local cafe pays, it's to make Starbucks pay 800 times as much as that local cafe.
Ah yes, we see the incredible abuses of the multinational, not paying 5.6 million pounds per year in taxes to UK authorities. That is indeed so much worse than the NSA intercepting every cell phone call you ever made.
(Score: 5, Insightful) by Runaway1956 on Thursday November 12 2015, @03:25PM
"The answer is business creation"
The problem is, large corporations don't create jobs. In lean times, they get rid of jobs, and in fat times, they let small businesses and entrepreneurs take all the risk - then buy those out. Large corporations don't create jobs, or business.
Think back a couple decades. Who made home computers popular? It wasn't Ma Bell, AT&T, or even IBM. The little guys came up with the ideas, they built the prototypes, they proved the ideas, they borrowed money to start production, and they borrowed more money to advertise their wares. Some of those little people went on to become millionaires and billionaires, but they were the little people back then. Love him or hate him, Steve Jobs was just some weenie from a college town with big ideas that no sane CEO would consider backing.
(Score: 1) by khallow on Thursday November 12 2015, @03:42PM
The problem is, large corporations don't create jobs.
If you have substantial business creation, it's not a problem. If you don't have enough business creation, then this problem doesn't stand out from all the other problems your society will have. I certainly would never consider it "the" problem no matter the circumstances.
(Score: 1) by DutchUncle on Thursday November 12 2015, @04:37PM
Straw man much? In truth I agree with your concerns about the NSA, but that is a separate issue from this one, and this should be easier to deal with precisely because it doesn't have any supposed benefit to hide behind. People can argue that the NSA is "keeping us safe" (we both disagree, but people can argue it), but NOBODY can make a useful case that shuffling money around to the least-tax venue benefits ANY of the countries involved.
(Score: 1) by khallow on Thursday November 12 2015, @05:38PM
In truth I agree with your concerns about the NSA, but that is a separate issue from this one, and this should be easier to deal with precisely because it doesn't have any supposed benefit to hide behind.
I disagree. One of the big consequences was a huge loss of business for US firms. But the rabid anti-corporation people aren't going to ally with organizations that they wrongly perceive as being the worst threat. Instead, the NSA got a free pass.
People can argue that the NSA is "keeping us safe" (we both disagree, but people can argue it), but NOBODY can make a useful case that shuffling money around to the least-tax venue benefits ANY of the countries involved.
It benefits the country with the low tax rate that is taking in this money. They get a lot of revenue without having to provide a lot of services.
(Score: 2) by bob_super on Thursday November 12 2015, @05:33PM
> As a US citizen who sees things like NSA, ATF, or the EPA play their games,
> why should I be more concerned about a multinational who is simply avoiding paying some taxes?
Nice that you put the EPA in the data collector argument... Apparently, the EPA trusts it's customer's data so much they don't need to check tailpipes. So oppressive...
More seriously...
The state registers your birth, provides your infrastructure, from roads to passports through safe water and food, and also your security so your children may enjoy all of it. The state also taxes you and provides for your health (directly and indirectly) and retirement. That's called civilization, and you are expected to pay your fair share.
Does the state really need to know your every move for this? Of course not! The availability of tech to do it has allowed some to go insanely overboard, in ways McCarthy, the KGB and the Stasi could only wet-dream of. But there is a legitimate basis for your country knowing most parts of your life.
There is no legitimate excuse to dodge taxes. If they are too high for the competitive environment, here's a ballot box, and here's Citizens United. Pay your share until you get enough people to agree that the rules need a tweak.
(Score: 1) by khallow on Thursday November 12 2015, @06:21PM
Nice that you put the EPA in the data collector argument... Apparently, the EPA trusts it's customer's data so much they don't need to check tailpipes. So oppressive...
I didn't say data collector. EPA games are more invasive and disruptive than that. For example, consider these three things: liability for pollution, wetlands, and the emissions ratchet. The EPA is notorious for creating tremendous pollution liabilities for lawful businesses. Superfund, for example, retroactively and illegally changes the status of pollution activities, and then follows up with vastly inefficient and costly mitigation approaches that have imposed vast costs on US businesses. This also has led to a business in environmental inspections since one can become liable for clean up of pollutants on land they purchase even if the previous land owner deliberately hid the pollution from the purchaser.
Wetlands are basically a nebulous term that can be stretched to cover any plot of land with poor drainage. The EPA has abused this to a staggering degree over the decades. For example, the EPA forced [washingtonpost.com] an Idaho couple, Mike and Chantell Sackett to cease construction on their home because part of the property was deemed to be wetlands. The EPA then had the gall to claim that the couple could not sue on the grounds that the couple first had to pay fines (up to $75k per day) and revert the supposed wetlands back to its previous state before they could have standing to sue the EPA to challenge the EPA's decision on their property.
Finally, what do I mean by the emissions ratchet? This is a process by which the EPA continues to demand more and more stringent control of pollutants without regard to the actual danger of these pollutants or their natural levels in the environment. There are some cases, such as with discharge of arsenic and selenium where the level of the pollutants is at or below the natural background concentrations of these materials (though fortunately, the EPA appears to currently allow polluters to ease up on their pollution controls if they can demonstrate the release of pollution would still be at a lower concentration than is natural). The nuclear industry is notoriously affected with ridiculously light levels of various radioactive isotope releases permitted.
There is no legitimate excuse to dodge taxes. If they are too high for the competitive environment, here's a ballot box, and here's Citizens United. Pay your share until you get enough people to agree that the rules need a tweak.
You have these same tools BTW to enforce your opinion of what "legitimate" is. Go for it.
(Score: 2) by DeathMonkey on Thursday November 12 2015, @07:02PM
...believe that the government is the enemy... How is that a problem...
Using a model that simplistic on a problem that complex isn't going to turn out well.
(Score: 1) by khallow on Thursday November 12 2015, @11:04PM
(Score: 2) by LoRdTAW on Thursday November 12 2015, @07:40PM
Why is Google, et al., hiding taxes somehow less bad than the NSA spying on people? Why can't both be bad?
And second, any American should rightly be plenty pissed at both because if Google didn't pay taxes, that means the little guys paid the taxes that built the NSA spying programs. Google didn't pay their fair share.
(Score: 1) by khallow on Thursday November 12 2015, @11:03PM
Why is Google, et al., hiding taxes somehow less bad than the NSA spying on people?
Do you really need me to answer that question? Do you really think it is equivalently bad to legally avoid paying some taxes rather to illegally spy on hundreds of millions of people?
And second, any American should rightly be plenty pissed at both because if Google didn't pay taxes, that means the little guys paid the taxes that built the NSA spying programs. Google didn't pay their fair share.
Yea, let's rage at those terrible Google people.