This is a good case why the US should lower corporate taxes to a rate that is competitive with other jurisdictions, or just get rid of them all-together. Corporations don't actually pay taxes even when they do; it's the consumers who pay for them in the form of increased prices (tax is just passed on as an expense). Better to collect the tax at time of sale (VAT) - perhaps on a sliding scale.
I wish I could use the same shenanigans that these companies get away with using to avoid paying their taxes. I could just imagine my conversation with the IRS:<p>"No, no, no, IRS, you don't understand! My employer didn't hire me. They hired my fictitious doppleganger who lives in the Bahamas, where there's no income tax. I license my name and know-how to him for a monthly fee. My invisible clone then does all the work remotely and earns the pay check. But, since we're really the same person, he should be able to transfer those earnings here to me tax free! Why should I have to wait for a tax holiday to use all this money? It's so unfair!!!"<p>These companies pulling this B.S. need to man up and pay their taxes like the rest of us.
As usual, this is the key takeaway, imo:<p><i>"None of this is illegal. Far from it. A corporation owes it to its shareholders to keep its tax bill as small as possible."</i>
>Apple reported it had $137.7 billion in offshore accounts. The CTJ report also found that Cisco had $48 billion, HP had $38 billion, Google nearly $39 billion, and Oracle $26 billion offshore
Perhaps this is another incentive to start/incorporate companies in countries where larger companies have large cash piles and low taxes where a higher priced acquisition might happen compared to what would happen in the United States. I'm not sure, but Skype could be a good example here.
Don't they have to bring it back at some point if they want to pay that as dividends? (i.e. if the shareholders want that money?)<p>Or are they counting on an eventual tax break on repatriations?
I know this is oversimplified and there are unintended consequences I haven't considered, but:<p>Seems like a tax holiday, structured with the right incentives (ie X% must be invested in US-based stuff .. Real estate, jobs, etc.) would be a win for everyone. Politicians get an economic stimulus that doesn't directly cost taxpayers money from the budget/treasury, and the companies get to bring back that foreign $$ at a reduced rate.