Tuesday, March 29, 2011

Follow Up on Swearing and Tax Dodgers

Big boy blogger Andrew Sullivan adds to the swearing textbook that I'll never get to use by comparing the most commonly used profanity in England and on the American East Coast.

The Daily Beast reports that GE is not the only company to dodge paying taxes.
Last year, Google reduced its tax burden by $3.1 billion by altering its tax practices. Boeing hasn’t paid any federal corporate income taxes in the last three years, despite earning $10 billion in domestic pre-tax profit. Pharmaceutical companies Pfizer, Eli Lilly, and Forest Laboratories habitually avoid paying U.S. income taxes by recording profits in a country a world away from where the sales occur. (For reference, interactive explanations of the tax strategies of Google and GE can be found here and here.) A study released in 2008 by the Government Accountability Office concluded that 57 percent of U.S. companies doing business in the country paid “no federal income taxes for at least one year between 1998 and 2005.”
The frightening part is that
“Companies don’t even have to be creative,” says Robert Willens, a taxation professor at Columbia Business School. “All they have to do is attribute or ascribe as much income as possible to foreign subsidiaries.” Companies register their intangible assets—intellectual property, for example—and income outside of the U.S. and register their liabilities and expenses in the U.S. to effectually reduce their taxable domestic income. Ireland and the Caribbean Islands are common tax havens.
I have to sardonically wonder if that lack of creativity is why China is becoming an economic juggernaut and the US is lagging behind

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