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G.E.’s Strategies Let It Avoid Taxes Altogether

Discussion in 'Sports and News' started by YankeeFan, Mar 24, 2011.

Page 4 of 10
  1. LongTimeListener

    LongTimeListener Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    Glad you brought up repatriation, because major tech companies are launching a lobbying offensive aimed at just that brand of bullshit.

    http://money.cnn.com/2011/02/16/news/companies/repatriation_lobby.fortune/index.htm?source=yahoo_quote

    They say they want to bring $1 trillion back here at 5 percent rates instead of 35 percent rate. In return, they just by-good-golly promise that they'll spend the cash here! Only the last round of repatriation yielded as much as 92 percent of the cash going straight back to stockholders and absolutely no job creation.

    Apple and Cisco are among the companies leading the charge. As the theory goes, this would give the companies the capital they need to do the kind of spending that creates jobs. However, there is the slight discrepancy that those two companies already are sitting on cash reserves exceeding $90 billion that they will not, no way, no how, spend. (Apple in particular has even faced some shareholder questions about why its stash is so large.)

    Repatriation: great for stockholders, good for congresspeople, useless for workers and a pit crater in the budget. So, in short, it will probably pass.
     
    LongTimeListener, Mar 25, 2011
    #37
  2. RickStain

    RickStain Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    Outsourcing and productivity have made the American worker nearly irrelevant. No amount of government cajoling will change that.
     
    RickStain, Mar 25, 2011
    #38
  3. trifectarich

    trifectarich Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    And we wonder why there's a deep hatred of our elected officials.
     
    trifectarich, Mar 25, 2011
    #39
  4. doctorquant

    doctorquant Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    You're assuming, of course, that NONE of that fresh revenue would result in fresh expenditures. I think I might take the other side of that trade!
     
    doctorquant, Mar 25, 2011
    #40
  5. poindexter

    poindexter Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    Don't forget that GE got bailed out.

    http://seekingalpha.com/article/105984-general-electric-gets-a-140b-bailout-what-s-the-point-of-aaa

    What a fucking country.
     
    poindexter, Mar 25, 2011
    #41
  6. Baron Scicluna

    Baron Scicluna Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    Gets taken right off the top.

    CEO writes a $1 million check to his congressman. Congressman's office puts it in the bank, writes a $500K check to the government, same day.

    If money is hidden in any ways, automatic jail time for the guilty party.
     
    Baron Scicluna, Mar 25, 2011
    #42
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    FYI, 60 Minutes has a piece scheduled to air on Sunday about U.S. corps shifting money to overseas tax havens. They focus on Zug, Switzerland, a town of 26,000 people, which has 30,000 companies registered in the area. The U.S. corporate tax rate of 35 percent is among the highest in the world. So companies register in places such as Zug, to get a more reasonable rate -- 15 percent there. John Chambers, CEO of Cisco Systems, has camera time talking about the $40 billion his company has trapped overseas, because if it comes into the U.S. it is tagged for taxes. That money stays overseas, building plants and bringing top-level jobs overseas. His message is that the U.S. tax code not only keeps money out of the treasury, it also encourages American companies to move and keep capital abroad.
     
    The Big Ragu, Mar 25, 2011
    #43
  8. LongTimeListener

    LongTimeListener Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    As I pointed out earlier, the last round of repatriation served only to enrich the shareholders with no effect on job creation, and John Chambers' comments about reinvesting the money here would carry a lot more weight if Cisco were not already sitting on $45 billion in cash reserves that it has no intention of spending.
     
    LongTimeListener, Mar 25, 2011
    #44
  9. Azrael

    Azrael Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    By percentage, US Federal corporate tax rates for the biggest companies are lower than they were in 1949 or 1970 or 1982. Go figure.

    http://www.taxfoundation.org/research/show/2140.html
     
    Azrael, Mar 25, 2011
    #45
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    We don't need repatriation or corporate tax holidays. That is the same exact bullshit. Companies are lobbying for it again, for the same reason they lobby for anything. It's for their benefit.

    We don't need gimmicks wrapped inside the corrupt code we already have.

    It would be nice if we could scrap the tax code and to make it simpler, easier and so straightforward that politicians can't throw earmarks into bills every other week to add a few pages here and there giving favors to companies and industries that contributed to their campaigns.

    And LongTime, Cisco has more than $40 billion in cash sitting overseas. It has only $3 billion in cash in the U.S. Stating that it has no intention of spending that cash is ridiculous. The company is floundering. They are in the midst of a stock buyback program to try to bring the stock price, which has taken a beating, back up. They have announced their first dividend ever. And they keep making new debt offerings -- they have more than $12 billion in long-term debt already and just announced the issuance of another $4 billion.

    The company is floundering. The $40 billion in cash sitting overseas (from foreign sales) is useless to the company, unless it can bring it back to the U.S. That is the reason Chambers has been such a strong advocate for the tax holiday. Cisco is going to have to repatriate some of that overseas cash with or without a tax holiday, in order to sustain its stock repurchase program (which has failed miserable) and pay the dividend and try other things, including acquisitions, to try to revitalize the company. They would prefer to repatriate the cash without getting socked with taxes.
     
    The Big Ragu, Mar 25, 2011
    #46
  11. The Big Ragu

    The Big Ragu Moderator Staff Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    Azrael, Corporate tax rates in Switzerland range, but generally sock these companies for around 15 percent. In Ireland corporations pay 12.5 percent.

    In the U.S., the corporate tax rate is 35 percent.

    We live in a way more global world than we did in 1949 or 1970 or 1982.

    Switzerland and Ireland are very stable places to headquarter.

    What is the incentive NOT to move subsidiaries there and keep millions, and sometimes billions, of dollars rather than handing them away?
     
    The Big Ragu, Mar 25, 2011
    #47
  12. LongTimeListener

    LongTimeListener Well-Known Member

    Re: G.E.’s Strategies Let It Avoid Taxes Altogether

    That's a good explanation, Ragu. I thank you for enlightening me.

    Maybe this is just too much of making high finance and government seem like poker ... but if Team USA knows Cisco is going to need to bring that money back no matter what, why would they let them off the hook? I guess that goes back to lobbying and gumming up the tax code to one's own benefit.
     
    LongTimeListener, Mar 25, 2011
    #48
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