Stories
Slash Boxes
Comments

SoylentNews is people

posted by n1 on Thursday November 12 2015, @01:24PM   Printer-friendly
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).


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 3, Interesting) by Phoenix666 on Thursday November 12 2015, @04:53PM

    by Phoenix666 (552) on Thursday November 12 2015, @04:53PM (#262215) Journal

    If we really want to level the playing field, we should tax income, property, and capital gains steeply above a certain level. That means there's no more incentive for the billionaires to amass 50 trophy homes, or give themselves multi-million dollar golden parachutes, or what-have-you. Financial transactions ought to be taxed heavily above a certain level; Wall Street people add zero value to the world with their numbers games, so they should at most eke out a subsistence living. After all, they're not doing any real work, so why should they roll in cash? Be a worthless parasite, earn like a worthless parasite, ie., very little.

    --
    Washington DC delenda est.
    Starting Score:    1  point
    Moderation   +1  
       Interesting=1, Total=1
    Extra 'Interesting' Modifier   0  
    Karma-Bonus Modifier   +1  

    Total Score:   3  
  • (Score: 0) by Anonymous Coward on Thursday November 12 2015, @10:53PM

    by Anonymous Coward on Thursday November 12 2015, @10:53PM (#262395)

    steeply above a certain level

    This sounds similar to the so-called "progressive" income tax that was tried, with disastrous results, during the Eisenhower era.

    • (Score: 2) by NotSanguine on Friday November 13 2015, @12:53AM

      by NotSanguine (285) <NotSanguineNO@SPAMSoylentNews.Org> on Friday November 13 2015, @12:53AM (#262435) Homepage Journal

      steeply above a certain level

      This sounds similar to the so-called "progressive" income tax that was tried, with disastrous results, during the Eisenhower era.

      You lost me there. Please explain [wikipedia.org] what the hell you're talking about?

      --
      No, no, you're not thinking; you're just being logical. --Niels Bohr
      • (Score: 2) by Runaway1956 on Friday November 13 2015, @03:48AM

        by Runaway1956 (2926) Subscriber Badge on Friday November 13 2015, @03:48AM (#262492) Journal

        Quick read on progressive tax rates. Maximum taxes could approach 100% on income above a certain level. The purpose of the taxes was to pay off debts incurred in the world war. For certain values of "failed", I suppose it can be claimed that the tax structure was a failure.

        Despite such claims, the wealthy didn't become impoverished while these taxes were in place. In fact, the wealthy continued to grow more wealthy, albeit at a slower rate than they might have liked. Individuals were taxed at around 15% for the first $25,000, and that level of income was a "comfortable" income in the '50's. It seems obvious that the poor and the middle class had little to worry about.

        Despite the very high tax rates at the time, huge numbers of people became millionaires. The progressive tax rates were structured to encourage businesses and entrepreneurship. You had to have quite a huge income to get into those top tax brackets.

        "The actual proportion of earnings citizens paid as income taxes in 1945 was far lower: for the poorest 20% of Americans, 1.7%; for the next 20%, 6.2%; for the middle quintile, 8.9%, for the upper-middle 20%, 10%; and for the wealthiest quintile, 20.7%. Tax rates have fallen since then: the current top level is 35% of income above $357,000, or $30,000 in 1945 dollars. Then the median family income was $2,379 per year. Brackets also have simplified (24 in the 1950s, just six today), yet the federal government takes in far more revenue than 60 years ago and citizens complain hugely about being over-taxed."

        I would characterize the tax structure during those years as a resounding success.

        • (Score: 2) by NotSanguine on Friday November 13 2015, @11:05AM

          by NotSanguine (285) <NotSanguineNO@SPAMSoylentNews.Org> on Friday November 13 2015, @11:05AM (#262585) Homepage Journal

          I would characterize the tax structure during those years as a resounding success.

          I would tend to agree. Thanks for the detail, Runaway. I appreciate it.

          I was confused since the U.S. economy was going through its largest expansion *ever* during this time. Apparently, huge growth and prosperity for more Americans than ever before constitutes a failure according to some. I wonder what criteria could be used to assess the effects (in part, the US industrial base being the only one really functioning during this time really helped, as did the the monumental projects of rebuilding Europe, Asia and creating the domestic infrastructure that's now crumbling) of really high taxes on the richest people (with investment in growth and infrastructure being strongly incentivized) during the Eisenhower administration as a failure.

          Hence my confusion as to AC's (apparently) unsubstantiated comment.

          --
          No, no, you're not thinking; you're just being logical. --Niels Bohr
          • (Score: 0) by Anonymous Coward on Friday November 13 2015, @04:45PM

            by Anonymous Coward on Friday November 13 2015, @04:45PM (#262733)

            Let's not be too sanguine.

            The post-war administration was running with some unusual blessings as well as some unusual problems. Extrapolation from that to today is difficult to the point of impossibility.

            Granted, the top marginal rate of income tax was very high, but it turns out to have been largely symbolic because that bracket actually didn't collect much money. It was a class warfare banner, not an actually significantly productive revenue plan.

            Also, most of the growth at the time came from the blessings of demobilisation and a massive increase in the workforce, in education of GIs, and return of productive capacity in a country which had the incredible benefit of an intact industrial infrastructure after the war, and the economic nimbleness to take advantage of it. The super-rich of the day didn't need their incomes to swell their pockets, because they were coining it in so many other ways.

            Today, we have a system much more based on financial instruments ranging from good ol' greenbacks through to exotic things like CDSes. Fewer people live in circumstances where they get much of anything except money (just look at the widespread urbanisation of the USA) and foreign competition for american industry is at an all-time high. Bracket creep has combined with various increased sales and other taxes applied by states and local authorities to take a much larger bite out of the grocery budget of many people who are struggling. People aren't complaining about being overtaxed because of the marginal rate they might pay on their last few dollars of total family income, but because of the totality.

            The post-war government had the incredible luxury of taxing the world's go-to manufacturer, when the main drag on profit was how many widgets could be cranked out in a given week. Sane tax policy then is froth-mouthed insanity today.