San Francisco's Chinese Bridge

[LS2JSTS]

Originally Posted By: Al
Originally Posted By: PandaBear

Money extracted by business - shuffled to an off shore account and pay foreign tax = Worst

Worst > bad > good.

No its money Business Earned (their money). 'If' they send it offshore its just like we shuffle our money offshore when we go to Wallyworld and buy Chinese stuff.


Agree, it's their money. But our tax code shouldn't allow it to be "shuffled" off shore until it's been taxed.

After it's been taxed, they can do whatever they want with their net profits.

 

[buster]

"Where Profits Come From " great paper.

http://levyforecast.com/our-research/the-profits-perspective/

 

[LS2JSTS]

The "depreciation drain"...

...I like that!

 

[mechanicx]

Originally Posted By: LS2JSTS
Originally Posted By: Al
Originally Posted By: PandaBear

Money extracted by business - shuffled to an off shore account and pay foreign tax = Worst

Worst > bad > good.

No its money Business Earned (their money). 'If' they send it offshore its just like we shuffle our money offshore when we go to Wallyworld and buy Chinese stuff.


Agree, it's their money. But our tax code shouldn't allow it to be "shuffled" off shore until it's been taxed.

After it's been taxed, they can do whatever they want with their net profits.


Exactly, I think Al is mishmashing gross income and net income. Most people can't shuffle their gross income offshore before it is taxed. When we go to Walmart and buy China products, not saying it's good but it's not entirely the consumers' fault, it's done with net income. There's too many loopholes and accounting tricks that make it easy for a business to report an artificially low taxable income.

 

[PandaBear]

Originally Posted By: Al
Originally Posted By: PandaBear

Money extracted by business - shuffled to an off shore account and pay foreign tax = Worst

Worst > bad > good.

No its money Business Earned (their money). 'If' they send it offshore its just like we shuffle our money offshore when we go to Wallyworld and buy Chinese stuff.


So it is earned if it is siphoned away from the economy by businesses, but it is "drained" or "wasted" if it is by the government. Even if both of them may or may not be spend back in the economy?

Actually, the "earned" money is more likely to be gone forever away from the circulation of your perpetual money making trickle down machine than the government tax / toll / fee money "drained" or "wasted" back into the economy. Do they get double counted as "earned" later by the businesses? Don't they cancel each other out in some way?

Like I said, you are just cooking the book.

Like I pointed out earlier as you said, it is "their money" when it is in businesses and it is "our money" if it is in government.

 

[PandaBear]

Originally Posted By: LS2JSTS
Originally Posted By: PandaBear


Money extracted by business - shuffled to an off shore account and pay foreign tax = Worst


In your opinion, is this the exception, or the rule?

You seem to post this argument all the time as if it is a widespread and common business practice. While I would never and could never honestly argue that it doesn't happen, we both know and acknowledge that it does. But to suggest it is common practice is just wrong...look at all the companies with under 500 employees, even those that are multi national and you'll see that the vast majority of them dont utilize the holding company tax dodges allowed by our convoluted tax codes. Even many larger corporations have never utilized these tax dodges...IMO, it's a shame that the companies that dont follow these ghost corporate off shore holding company practices get painted with the same brush as those that do.

As far as those that do....I agree with you, the loopholes should be slammed shut...I know of at least one Michigan company that I avoid their products for just this reason. The founders sons even took the extraordinary step of renouncing their citizenship and moving the bulk of their wealth off shore, taking up citizenship and corporate presence in some island nation who acts more like a partner in crime rather than a regulatory body. Meanwhile the factories and the products are still made here and sold here and the profits are still being stolen from here....in these specific instances I find this practice despicable, but I refuse to believe it is the rule rather than the exception unless you can provide substantial evidence to the contrary. I've seen the lists of the companies that do this stuff, they are clearly in the minority as far as total numbers.


It is the rule for any large scale import businesses.

 

[LS2JSTS]

Originally Posted By: PandaBear
Originally Posted By: LS2JSTS



In your opinion, is this the exception, or the rule?

You seem to post this argument all the time as if it is a widespread and common business practice. While I would never and could never honestly argue that it doesn't happen, we both know and acknowledge that it does. But to suggest it is common practice is just wrong...look at all the companies with under 500 employees, even those that are multi national and you'll see that the vast majority of them dont utilize the holding company tax dodges allowed by our convoluted tax codes. Even many larger corporations have never utilized these tax dodges... but I refuse to believe it is the rule rather than the exception unless you can provide substantial evidence to the contrary. I've seen the lists of the companies that do this stuff, they are clearly in the minority as far as total numbers.


It is the rule for any large scale import businesses.


So, in other words the answer is NO it's not a general business practice utilized by the majority of businesses operating in America. Just a certain vaguely defined sub segment that you portray as reflecting the majority.

If it is as widespread as you claim, it should be easy to post long lists of companies utilizing these loopholes...as it is every list I've ever seen just regurgitates the same tired names that get kicked around endlessly. The fact is that MOST American corporations do not utilize these loopholes...although like I clearly acknowledge, many do....but in that realm I agree with you that ability should be shut down.

 

[Al]

Originally Posted By: PandaBear

So it is earned if it is siphoned away from the economy by businesses,
You "choose" to buy a product from a company. They pay taxes on that money and do whatever they want with it.

Quote:
but it is "drained" or "wasted" if it is by the government. Even if both of them may or may not be spend back in the economy?

First it is "extracted" from me. And then they go spend $1.40+ cents on every dollar they collect. They then finance the rest in the form of obligations which ultimately costs us more than the extra 40 cents.. Is that a god thing??

Quote:
Actually, the "earned" money is more likely to be gone forever away from the circulation of your perpetual money making trickle down machine than the government tax / toll / fee money "drained" or "wasted" back into the economy. Do they get double counted as "earned" later by the businesses? Don't they cancel each other out in some way?

You seem to be making up some strong assumptions..like business income goes out of the economy and Government Stimulus which is moneys extracted by force from us and then spent (remember more than that $$) for...."good things"???

[
Quote:
Like I said, you are just cooking the book.

I'm not cooking anything. I'm trying to explain why Forcible extraction of money is not a good thing.

Quote:
Like I pointed out earlier as you said, it is "their money" when it is in businesses and it is "our money" if it is in government.

You might want to read up on the "Declaration of Independence" and The Constitution of the United States"...the gist of these two Documents is that "We the People" of the United States "are" the Government..whereas "We the People" do not own nor are we "Business". Unfortunately it appears the "We the People" seem to have lost the ability to control our Government.

 

[PandaBear]

Originally Posted By: LS2JSTS
So, in other words the answer is NO it's not a general business practice utilized by the majority of businesses operating in America. Just a certain vaguely defined sub segment that you portray as reflecting the majority.

If it is as widespread as you claim, it should be easy to post long lists of companies utilizing these loopholes...as it is every list I've ever seen just regurgitates the same tired names that get kicked around endlessly. The fact is that MOST American corporations do not utilize these loopholes...although like I clearly acknowledge, many do....but in that realm I agree with you that ability should be shut down.


I'm not calling mom and pop or even a family of franchises of business owners on tax evasion by using tax haven. The number of businesses who use this is small because most of the businesses are small businesses. But the dollar amount being siphoned off as a percentage of all transaction values is huge.

 

[LS2JSTS]

The number of large businesses that utilize this practice is small compared to the number of large businesses that dont. Compared to the number of all businesses it's miniscule.

Quantify the numbers for us...rather than just telling me that the number is huge...prove it, give me some data to review, what is the number as an expression of percentage of GDP...anything. I've looked into this, while I clearly agree it exists and does happen, from all I've read, the size and scope of the problem is a blip when viewed against the whole.

If you have a source or data that proves otherwise, I would gladly like to have that ammo in future discussions about this topic. Believe it or not, I agree with you the loopholes should be closed. But I completely disagree that the problem is as huge as you represent it.

 

[PandaBear]

Originally Posted By: LS2JSTS
The number of large businesses that utilize this practice is small compared to the number of large businesses that dont. Compared to the number of all businesses it's miniscule.

Quantify the numbers for us...rather than just telling me that the number is huge...prove it, give me some data to review, what is the number as an expression of percentage of GDP...anything. I've looked into this, while I clearly agree it exists and does happen, from all I've read, the size and scope of the problem is a blip when viewed against the whole.

If you have a source or data that proves otherwise, I would gladly like to have that ammo in future discussions about this topic. Believe it or not, I agree with you the loopholes should be closed. But I completely disagree that the problem is as huge as you represent it.


http://en.wikipedia.org/wiki/Tax_haven

Tax Justice Network, an anti-tax haven pressure group, suggests that global tax revenue lost to tax havens exceeds US$255 billion per year, although those figures are not widely accepted. Estimates by the OECD suggest that by 2007 capital held offshore amounts to somewhere between US$5 trillion and US$7 trillion, making up approximately 6–8% of total global investments under management. Of this, approximately US$1.4 trillion is estimate to be held in the Cayman Islands alone.[33]

 

[Tempest]

Quote:
What in the world is the difference between consumer spending money directly and doing it indirectly through the government? If an American company and workers were being paid to do the job, they would sure see it as wealth. Plus they would pay taxes including federal, and buy things, possibly from California.

The difference is that the private sector creates wealth, and government extracts it. All government does is move it around to different pockets and your post here reflects that.

Any money used to build this bridge had to come out of someone else's pocket. After you figure in the overhead of government paper pushers, wealth goes down. There is no multiplier affect that is positive, it must be less than 1.

It very much matters where the money comes from. If your logic is correct, then you should have no issues with a 100% tax rate for yourself.

ETA: Government workers, and the people employed by government contractors, don't really pay taxes. Their incomes simply get reduced by a certain amount. Real taxes can only come out of the private sector.

 

[Tempest]

And for those think money to China just disappears, this article shows how valuable China is as a trading partner:
https://www.uschina.org/public/exports/2000_2010/full_state_report.pdf

 

[Tempest]

Originally Posted By: CivicFan
The concept of the multiplier is simple. When you spend a dollar, that is income for someone else. Then that person spends that one dollar which is income for someone other. And it goes on. Of course, you do not spend all of that one dollar. Some of it is saved. That saved money is then loaned to a business which invests. This is not exclusive feature of the dollars spent by the governments. Money, after all, does not care where it came from.

Economic activity has a pattern of turning money over and over. During normal times, it works like a well oiled machine through different mechanisms available in the free market.

It's the abnormal times that require decisive actions by the central banks for monetary policy (interest rate changes) or the executive branch for fiscal policy (spending increases). Both are to encourage economic activity and resumption of the confidence by consumers (70% of all economic activity in the US is consumption) or investors.

Can you please show me where this has ever worked? It certainly isn't working now. Bernanke just came out and said the economy is in bad shape and he doesn't understand why. He believes as you do.

If it doesn't matter where the money comes from, then a full central economy will be just as efficient and prosperous as a free market one. This is something that you necessarily agree with based on this post.

 

[LS2JSTS]

Originally Posted By: PandaBear
Originally Posted By: LS2JSTS
The number of large businesses that utilize this practice is small compared to the number of large businesses that dont. Compared to the number of all businesses it's miniscule.

Quantify the numbers for us...rather than just telling me that the number is huge...prove it, give me some data to review, what is the number as an expression of percentage of GDP...anything. I've looked into this, while I clearly agree it exists and does happen, from all I've read, the size and scope of the problem is a blip when viewed against the whole.

If you have a source or data that proves otherwise, I would gladly like to have that ammo in future discussions about this topic. Believe it or not, I agree with you the loopholes should be closed. But I completely disagree that the problem is as huge as you represent it.


http://en.wikipedia.org/wiki/Tax_haven

Tax Justice Network, an anti-tax haven pressure group, suggests that global tax revenue lost to tax havens exceeds US$255 billion per year, although those figures are not widely accepted. Estimates by the OECD suggest that by 2007 capital held offshore amounts to somewhere between US$5 trillion and US$7 trillion, making up approximately 6–8% of total global investments under management. Of this, approximately US$1.4 trillion is estimate to be held in the Cayman Islands alone.[33]



Sorry, that doesn't even come close. Any data that pertains to American businesses that utilize this practice and what amount it costs the US treasury? You know, the topic we are discussing rather than some vague global figures that are grossly over estimated.

As an example, one article quoted on the wiki link discusses the raw percentage of US businesses that have operations in known tax havens, they claim that number is 59%. Yet they make no effort at all to determine whether those operations are in fact used to funnel cash before taxes out of a jurisdiction and into another. Ford has operations in Tax Haven countries, but they also sell cars and have real operations there as well...no evidence at all that Ford moves income from here to there to avoid taxes, yet they get lumped in with the 59%. Garbage in garbage out.

Again, it shouldnt be happening at all. But even the grossly over estimated global 255 billion/year number that you linked to is a drop in the bucket on a global scale.

 

[Al]

Originally Posted By: Tempest
Bernanke just came out and said the economy is in bad shape and he doesn't understand why. He believes as you do.


Not surprising considering he doesn't seem to realize that Stmulus money is Taxpayer's Money being spent.

Originally Posted By: buster

 

[PandaBear]

Originally Posted By: Al
You "choose" to buy a product from a company. They pay taxes on that money and do whatever they want with it.


I don't care what you choose. As a whole in the market place demand and supply dictate the amount, but the fact still remain, wealth is moving from one pocket to the other as Tempest claimed, both public and private. You and Tempest are just choosing to apply different rule because of your emotion, political believe, and ideology.

Quote:
First it is "extracted" from me. And then they go spend $1.40+ cents on every dollar they collect. They then finance the rest in the form of obligations which ultimately costs us more than the extra 40 cents.. Is that a god thing??


If they do not extract the $1 from you to spend the $1.40, they will be spending $1.40 by borrowing. The $1.4 is made by the private sector and you call that "wealth" from people and businesses who "earned" it.

Quote:
You seem to be making up some strong assumptions..like business income goes out of the economy and Government Stimulus which is moneys extracted by force from us and then spent (remember more than that $$) for...."good things"???


And you seems to make up your mind that government can do no good and businesses can do no wrong when they spend money. That businesses do not have waste and businesses are always investing back instead of hoarding cash doing nothing, and they do not selectively pick only the profitable businesses (UPS, FedEx) and let the government and society as a whole hold the bag (USPS).

Quote:
I'm not cooking anything. I'm trying to explain why Forcible extraction of money is not a good thing.

And ignore the rest of the logic and math along the way. Look, you are ignoring gray area and demand that government always be 100% efficient and expect services (police, education, defense) to just spring up magically for free, and the private sectors providing these services to government "generating wealth" and "earned it" while booking the "waste" on the opposite side of the transactions.

I still call it what it is, a wash, and book cooking.

Quote:
You might want to read up on the "Declaration of Independence" and The Constitution of the United States"...the gist of these two Documents is that "We the People" of the United States "are" the Government..whereas "We the People" do not own nor are we "Business". Unfortunately it appears the "We the People" seem to have lost the ability to control our Government.


I read it in high school, and it doesn't mention anywhere that citizen get a free ride (both low/no tax and entitlement) at all, just representation with tax. Nor did it ever mention that government must not be in competition with businesses in the private sector, nor did it mention that government is suppose to spend double digit percentage in war machine as kick back to campaign contribution, etc.

 

[Tempest]

Quote:
As a whole in the market place demand and supply dictate the amount, but the fact still remain, wealth is moving from one pocket to the other as Tempest claimed, both public and private. You and Tempest are just choosing to apply different rule because of your emotion, political believe, and ideology.

Where does wealth come from?

 

[mechanicx]

Originally Posted By: Tempest
Quote:
As a whole in the market place demand and supply dictate the amount, but the fact still remain, wealth is moving from one pocket to the other as Tempest claimed, both public and private. You and Tempest are just choosing to apply different rule because of your emotion, political believe, and ideology.

Where does wealth come from?


From productive work that could be performed in the private or public sector, profit or non-profit, duh. But you seem to narrowly define wealth as money in a person's back account regardless of how they acquired it anywhere in the world.

 

[SteveSRT8]

Forget emotion, political beliefs and ideology.

Just think about your own well being, security, etc.

I wonder how many small biz owners are just like me. I'd like to hire another man but the outlook is bleak so I hesitate to do so as we take employees into our family and treat them like such.

I'd also like to buy a new van and machinery, a 60k purchase! But I don't want to spend the money due to the aforementioned economic climate.

Small biz like me is the real economy here, we create more jobs period. When we're down you are all hurt, despite what you think.

Some of the folks here have a lot to learn about REALITY, lots of great economic theory here. With idiots like Bernanke and Geithner running the economy we seem to be doomed.