Thursday, October 21, 2010

Make Them Pay

The most ridiculous idea I've seen recently is the one floating around to give the corporations a tax holiday on their accumulated overseas earnings. Here's the main facts: A company creates an overseas subsidiary to do business in other countries. It makes money and pays taxes wherever it operates, such as in Europe or Asia. The company also takes an accounting charge to US earnings for the taxes due to the US, but the actual payment is deferred until the cash is brought back to the US. The company receives a credit on its US taxes for the foreign taxes paid on that income - thus NO double taxation.

Now they want to get out of this tax liability - one already booked and owed. The overseas countries got their taxes, but the US - the home country which provides them existence - would not. That is utterly ridiculous.

Example: Cisco Systems with its CEO, John ("JohnBoy") Chambers. He co-authored an op-ed in the WSJ yesterday asking for this tax break. His co-author was president of Oracle. Both of them make millions of $ a year, but want more.

"One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.

"But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here."

This article and the entire argument is first class sophistry. The companies have ALREADY booked the taxes they OWE to the US. There is no "penalty" - the tax is owed.

In the first place, the only money the company cannot reinvest is the money they OWE to the US government. The rest of the money - up to 65% - can be reinvested. Second, they already OWE that money and have reported that liability to their shareholders. Third, nothing makes them actually invest that money - they can use it for executive salaries or dividends or whatever. Claiming this is a job issue is a total LIE. US interest rates are extremely low. The companies can easily finance new investment for jobs with long term bonds. They are simply lying when they say this tax break is needed.

All JohnBoy and his clique want is another free ride to get more executive pay via stock options and other massive pay packages.

Here's a better idea: tax the entire worldwide earnings NOW. Let's collect this long overdue debt. Close this overseas earnings loophole forever.

Use the money to pay down US debt.

Word of the Day

"Coxcomb" - noun [$10]
Coxcomb means an ostentatiously conceited man, a dandy.
Sentence: Corporate coxcombs seem to think the world revolves around them, that they are Dukes or Princes. It's time to bring them down to learn about the common man & woman. Make them pay.


Bud said...

U.S. officials say conditions aren't ripe for a global accord on currencies like the 1985 Plaza accord to push the dollar down. The goal, another senior Treasury official told reporters, is an agreement to "pursue a cooperative approach" that would, even without explicit pledges, lead China and smaller countries in its shadow to let their exchange rates appreciate.

and there you's the official policy of the US government to devalue the dollar 50%...........why else would they mention the Plaza accord??...........cuz after that...........the dollar got chopped in half

dollar tankaroo

Bud said...

there is a global currency war underway.......wake up is this good for the common man ???

stop with this nonsense about caring or fighting for the common's a hoax and i ain't buyin it

PS.......when the last time the Bman talked to a common man???? well it was at the Harvard club........when he yelled at the waitor for bringin him the wrong drink

Bud said...

Mr. Geithner emphasized that the U.S. is not pursuing a deliberate policy of devaluing the dollar. Earlier this week, speaking in Palo Alto, Calif., he said that no country can "devalue its way to prosperity and competitiveness."


Bud said...

inflation check :

bought some fruit at Publix last night..............bananas 69 cents a lb...........i can't recall ever payin that much..............gala apples .......1.79/lb

i guess the common man won't be eating fruit anytime soon............let it fall my ass

Bunkerman said...

the dollar was so high in 1985 it was guting the entire US mfg. & farm sector. Volcker was a neutron bomb for US industry.

Bunkerman said...

Let it fall, let it fall, let it fall.

The rest of the world should get off the backs off the US common man, and stop seducing him-her into buying their stuff with cheap debt.

Let it fall.

Bunkerman said...

I think US "double secret" policy is to devalue 50% vs. China and some other emerging market countries, but stay same vs. Europe.

Don't know vs. Japan.

Spin-em said...

Bub...should you be bustin clinks balls while your talkin about Pepperidge farms??

Frosty said...

Bunky...lil education for you...when Sal's rants get out of control a change is at hand...THE DOLLAR HAS BOTTOMED, at least through the end of the year...there I said it.

Bunkerman said...

lol frsoty.

I'll have to check with Krypto to see if more selling is called for.

Spin-em said...

Does that mean Bunky wins his own helmet??...Mav wins and wam bam thank you maam... Donde esta Mav??

Bunkerman said...

so far, mfl leads on the 2nd half helmet for HIGH

Frosty is #2

Bman #3

mav - out of contention

Spin, the cellar - double out of contention.

Bud - did not play - was in Pawtucket playing triple A ball at the time ...

for CLOSE, frosty leads is this is the close.

Frosty said...

Beefer game plan….handshake timmmyyyy before he gets on his knees in front of chinnlleee budstyle down at the blueoyster, raise rates 25bps….start bringing the lever in largest position, darkdollar…nonono rush stock sales until caught red handed, then rush the exits, cause common man some pain, then put the floor in…wash rinse repeat….that sound about right Bunky.

Bunkerman said...

putting it in American dialect, I figure a modest, multi-day pullback soon, then a run to new post Panic highs for year end.

Beefers need a good payday.

Frosty said...

douchedouchedouche...sorry, something stuck in my throat...thought my post much more eloquent...philistine :)

Bunkerman said...

no doubt yours was much more poetic - I re-ararnged the lines into free verse:

Beefer game plan….

timmmyyyy before he
gets on his knees
in front of chinnlleee
down at the blueoyster,
raise rates 25bps….

start bringing the lever in largest position,

nonono rush stock sales until caught red handed,
then rush the exits,
cause common man some pain,
then put the floor in…

wash rinse repeat….

that sound about right Bunky.

Bud said...

wow Bman...............i'm glad you find the destruction of the nations currency a can you be so cavalier ???

is the Bman bloodlines really from that great patriot general sherman ?? seems to me like he from the benedict arnold chain

Bunkerman said...

ancestors fought for Sherman - I'm not descended from him.

Also fought for Washington

Even against Indians in French & Indian war

I'm pro-common man; protecting the dollar at cost of common man jobs is a bad idea; that pro-dollar policy favors the Ruling wealthy classes vs. the common man.

mfl59 said...

Jobs? Where are the jobs sir? You sound like Dick Blumenthal!!!

Spin-em said...

who would golf or pal around with Bud if this is not an act...for real...Im worried about the cops

Bunkerman said...

To paraphrase the "Great Commoner" (quiz - who's that?)

Thou shalt not crucify the common man on a cross of Green.

That was the original "strong dollar" fight - the common man lost it and suffered immensely in the Depression of 1893.

The Big Money bosses & House of Morgan won it.

Bunkerman said...

US jobs will come ... faster if US would stop taxing jobs so heavily.

mfl59 said...

Uhhh spin doesnt he sandbag his own friends? what a guy indeed!!! Its no act sir...

Bunkerman said...

Original: Let it Snow
(think if vaughn Monroe singing it)
Oh the weather outside is frightful,
But the fire is so delightful,
And since we've no place to go,
Let It Snow! Let It Snow! Let It Snow!

The Bman Version
Oh the economy was quite
But a falling buck is so delightful,
And since there are no jobs at all,
Let is fall, let it fall, let it fall.

Bunkerman said...

imagine Bman with belting that out is in deep, rich baritone voice


Frosty said...

"let him swing"

Spin-em said... dug deep for that indexer...cripes..LOOOOOOOL