The Bureau of Investigative Journalism reports this morning that:
The US government makes vast interest payments to technology giants including Apple and Microsoft on the billions of dollars they shelter from tax offshore.
A trawl of Securities & Exchange Commission (SEC) disclosures shows that Apple, Microsoft, Google and Cisco Systems hold $163 billion in US government debt, earning these companies substantial sums in interest.
This means American taxpayers in effect pay interest to tech giants on their offshore cash which is held there for tax reduction purposes.
There is no suggestion that any of the companies' activities are in any way unlawful.
You couldn't make it up, could you? These companies hide billions offshore to avoid paying US tax and then lend the money they're hiding to the US Treasury to help make good the deficit their behaviour is fuelling, and get paid for the privilege of doing so.
When systems get this rotten the problem is they get in danger of collapse. That's what troubles me about this story. It questions the viability of government and society itself when a few take it for, to use the vernacular, such a blarant ride. That is a precursor to serious instability and breakdown.
The US has to overcome these blatant abuses if its society is to survive, but the portents are not good.
Worry, after you have read the story in full.
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The idea is simple and that is to get leverage over the state using debt as a weapon, while pretending to come to its aid.
The apologists can’t see that if Google, Apple etc paid tax on the basis of where their economic activities actually take place instead of on an edifice of legal fictions then the state would have the resources it needs to operate and then would not need to borrow the funds….
Instead we all become victims of financialization, which despite the crash in 2008 is still out of control and morphing into financial fascism..
@Thermustbeanotherway
“The apologists can’t see that if Google, Apple etc paid tax on the basis of where their economic activities actually take place”
This is indeed the point. They do pay tax on where the economic activity takes place – these are the non-US based revenues of these companies. To repatriate that money back to the US would incur another much larger tax hit, because of the US super high corp tax rates.
“The idea is simple and that is to get leverage over the state using debt as a weapon”
This is more conspiracy theory than fact. The reality is, that these companies are sitting on huge cash piles offshore and it you get virtually nothing leaving it in a bank account (and indeed a negative return once inflation is taken into account). So they invest in the safest, most liquid assets possible to generate enough eturn to beat inflation, which happen to be US treasuries for the most part.
As if owning even billions of USTs give you any leverage over the US government, with it’s trillions in debt.
I think the time has come to stop you continually misrepresenting the truth on this site.
Anyone but a fool can see that Google does not make its profits in Bermuda: it makes them in the UK, India, Finland and everywhere else where it charges for its advertising but refuses to pay the appropriate taxes on the revenue it generates as a result
You deny this
You are also denying that the US head office of the company should pay taxes on the operations that it oversees, having given credit for tax paid locally. That is also a deliberate misrepresentation by you of what should really be taking place and as such I think your time on this site has come to an end. My readers do not need to be subjected to the continual misinformation that you supply on the site, presumably because you are paid to do so.
Please do not call again
So Richard, you’re arguing that the companies are avoiding US tax as you say:
“These companies hide billions offshore to avoid paying US tax”
but you also argue that Google
“does not make its profits in Bermuda: it makes them in the UK, India, Finland and everywhere else where it charges for its advertising”
So how are such companies avoiding US tax if the profits would not be taxed in the US even if you did change the way international tax laws work to the way you think they should work?
Talking of which, if I buy a building in Eire, staff it with sales people who are Eire citizens, who travel to work on Eire public transport, who go to Eire publicly funded hospitals if they fall ill and whose children go to Eire publicly funded schools are you saying that the tax on the profit on an advert which one of those sales people sells to someone who lives in Monaco should be paid to the Monaco government because that’s where the customer happens to be living?
I have answered this question very many times already
Your comment has been posted further to point 5 of the comments policy to which attention is drawn.
OK I agree 100% with you RM. But I do wonder why the US Government does not take action. It can’t all be about the control that these companies wield,presumably
the US Government is grateful to have these as American companies, the US has always acted demonstrably in it own interests throughout history (and that’s not a recent feature).