Quick question about taxes and offshore companies.

[Massacure]

Let's say a corporation has their corporate headquarters somewhere outside the United States. Can the U.S. government tax them on all profits made inside the U.S. and just not allow them to sell things in the country if they refuse to pay? Does the U.S. government currently do this?

[FloridaPat]

1. That's my understanding. The idea to "move" offshore is so not to

pay taxes on sales outside the country.

[Name removed]

6. Deleted message

Message removed by moderator. Click here to review the message board rules.

[stevebreeze]

2. They certainly COULD tax corporations in this way, they do not

In fact states could also tax corporations on profits generated within their states, and do not. If my memory is correct (somewhat questionable) California tried to change to a system of this sort but it went down in flames in a monstrous surge of lobbying and campaign finance dollars.

For instance if 50% of the goods sold by corporation A were produced in a given state it follows that that state should be able to tax on 50% of the profits of corporation A. However that is not how it works. Accounting practices allow them to cost shift profits overseas and out of state. for instance if you are building bikes, you could build most of the components here and ship the wheels in from overseas. You could , on paper set the cost of the wheels so that is where most of the profits of the bike are made. since the profit is made by your overseas subsidiary and not the corp in this country, most of the corporate taxes are avoided.

[Massacure]

3. I'm talking about taxing the profit of everything sold not produced

[EVDebs]

4. The Bushites are repatriating, temporarily , some of that money

Capital Repatriation

http://www.americanshareholders.com/news/asa-repat-08-1...

to the tune of around $350 billion of 'Hot Money' see

http://www.pubgouv.com/essai/hot_money.htm

That's what is keeping the economy treading water...so far.

[FormerDittoHead]

5. They shift taxable income overseas...

So for example, according to David Clay Johnston, one of the many techniques the do is to transfer trademark rights overseas.

So, when you buy "huggies" with the obligatory copyrighted Disney character (as if my 13 month old knows Donald Duck from Mickey Mouse, but I prefer Huggies) a 'royalty' is paid to the offshore company.

This is very easy to do with intellectual property, where everything can be done on paper, nothing has to be made overseas or imported, etc...