Originally posted by sh76
Moving headquarters can only work if less than a certain percentage of the company's business is done in the US. In general, moving operations offshore to avoid income tax can be and is done by companies from time to time (movement between states is done for similar reasons) but not all companies can simply move offshore. It's a little more complex than it soun ...[text shortened]... ly opposed to those ideas, but I'm not sure the Republican establishment will be too enthralled.
It is not an income tax that is proposed for corporations' overseas earnings.
In general, a multinational can shift its earnings, profits, losses, revenues, cashflows anywhere it likes in the supply chain without moving any tangible assets whatever. The amount of economic activity in places like the Irish Republic, the Cayman Islands or the Bahamas (for example) bears no relation whatever to the reported earnings of the corporations having a pretend head office the size of a paper file at the back of a cabinet.
Regrettably for the corporations, they have accumulated immense financial assets in places where they can get no value from it. At some point, if they are unable to bring their cash mountain back "onshore" then it is going to sit idle.
The reality is that corporations have huge cash surpluses which are not circulating productively in our global economy, but instead supporting a casino economy that is destabilising everything. If a proportion of that were drawn back into the economy through taxation, it would support the kind of public investment that can revive our economies.
The Tea Party Taliban in the USA has the idiotic notion that Government deficits and taxation are the problem but that is nonsense. The heyday of Laissez Faire and balanced budgets in the US and Britain was the 19th Century and culminated in huge instability, a fearful pattern of false booms and fearful crashes. The UK saw depressed economic activity for much of the century because of its determination to fully pay back national debt after the Napoleonic wars. There was not much of a middle class then and the middle class is again dying under neoliberal economic policies today.
The problem is the failure to tax wealth and the failure to invest in infrastructure. That creates an increasingly unequal society that is not really functional, so it induces social dislocation on a grand scale. The American economy worked best under progressive taxation and expansive public spending policies, albeit it has always excluded up to 50% of the people from full participation.
But the US will not crawl back to its heyday, because the corporations that have owned US politics since perhaps the 1870s are slipping quietly out the free trade back door. The American voters have come to the point where they squeal anxiously for the protection of the one force that will eat them alive - the very corporations that decline to contribute while taking most of the benefit from the modern state. Far from investing in the good American people, the corporations prefer to promote slave conditions in less developed countries, and American jobs will continue to slip overseas. Free trade means the Anglo-Saxon economies are up for sale and the money is not going to the people. The American workforce, like the British, has been starved of a pay rise since the end of the Seventies in the interest of greater corporate profitability. Instead, they have been tricked into levels of personal debt that were once inconceivable and that debt chokes productive economic activity today. Corporate tax reliefs, escalating wealth for the 1%, all that is nonsensical.
Listen carefully. The wealthy and the corporations are cash rich. They do not have a productive use for the additional cash the Tea Party wants them to be given through reduced taxation. The more governments move to a balanced budget or even a surplus, the worse things will get for everyone. The Tea Party Taliban have a death wish.
Trump tax plan
29 Sep '15 15:31
Back to Top