Offshore profits and taxing

[Roadmap2Retire]

As I read another article on offshore cash parking and avoiding US taxes (this time, Gilead), I cant help but wonder why the US government thinks that it has the right to tax worldwide income. A government should only tax what a company earns in that country. Personally I find it annoying when the media reports "the US government is losing..." or "the corporations are using a loophole..."

I realize that its been the system in the US and I hear this even from individuals as well, not just corporations. I have friends who are dual citizens (Canadian and US) and apparently it doesnt matter if you havent lived in the US for decades - you still have to file taxes there as long as you are citizen. Some have resorted to, or atleast considering, simply giving up their US citizenship.

It is no wonder that companies have resorted to tax inversions (like Medtronic) and/or simply moving their HQ to other countries (like Burger King). The US marketplace is something that companies will not necessarily leave, as it is the most lucrative market in the world, but unless there is an overhaul in the tax system, we will keep seeing these stories of cash parked overseas.

/rant

[benjamen]

Eritea (who only do a 2% tax) and the United States are the only countries in the world that tax the income of their citizens living in another country.
https://en.wikipedia.org/wiki/International_taxation

Record numbers of Americans are giving up their citizenships:
http://finance.yahoo.com/news/record-num...39878.html

In response the U.S. state department raised the cost to do so by 500%
http://blogs.wsj.com/totalreturn/2014/08...-fivefold/

You also may have to pay an exit tax:
http://www.expatinfodesk.com/expat-guide...-passport/

[Joey Batz]

And they say taxation is somehow different from stealing.

I've never blamed anybody who used offshore accounts to hide money. If I could do so without facing legal repercussions (and sleep well at night knowing that I wouldn't get caught), I would do it. I'm not going to put down numbers, but the government (state, local, and federal) take away roughly a third of my paycheck. That's fine if I were making six figures or whatever, but with prices (namely real estate prices and, thus, rent) as high as they are in my city and the value of the dollar what it is, the amount of money I make can only be classified as "Live With Your Parents Until It's Socially Unacceptable To Do So" wages. The money that the government is taking from me? I need that money. Sure, ISIS is beheading people in Iraq and whatnot, I know. It's sad. But I need my money. I can't afford to give that much of it up like that.

[benjamen]

(03-03-2015, 08:58 AM)Joey Batz Wrote: And they say taxation is somehow different from stealing.

I've never blamed anybody who used offshore accounts to hide money. If I could do so without facing legal repercussions (and sleep well at night knowing that I wouldn't get caught), I would do it. I'm not going to put down numbers, but the government (state, local, and federal) take away roughly a third of my paycheck. That's fine if I were making six figures or whatever, but with prices (namely real estate prices and, thus, rent) as high as they are in my city and the value of the dollar what it is, the amount of money I make can only be classified as "Live With Your Parents Until It's Socially Unacceptable To Do So" wages. The money that the government is taking from me? I need that money. Sure, ISIS is beheading people in Iraq and whatnot, I know. It's sad. But I need my money. I can't afford to give that much of it up like that.

It gets much worse as your income increases. I make decent money, but when I got married to someone who makes a similar income I really started getting hammered. It became a game of dodge (legally) the taxman. Max that 401k, IRA, Roth IRA, HSA account, harvest equity losses, ect to lower your taxable income become the norm.

[Roadmap2Retire]

I hear you. Reminds me of a comic strip I saw recently (cant seem to find it) comparing the tea tax that lead to American independence but now, we are stuck paying income tax, property tax, payroll tax, estate tax, sales tax, gasoline tax...the list went on.

Use those tax shelters to protect your assets.

[Roadmap2Retire]

Another one moves abroad. Hello Pfallergan.
http://seekingalpha.com/article/3707036-...pfallergan

[crimsonghost747]

The problem I see here is that the companies rarely pay taxes into the country where the profit comes from. So if they don't pay there and don't pay in the USA then they skip taxes all together? Or maybe they don't pay in other countries because they have to pay if taking the cash back to the USA?

I guess yet again it's just taxation made way too complicated by having some many rules to follow.

[rayray]

This has been a debate I've been having with friends and family members--I'm a firm believer if the government taxes corporations too much they will leave, on the other hand if taxes were lowered I'm not sure what good that would do? I'm not sure how developed countries can compete with third world countries in the labor front, why pay an employee 75k a year when you can pay someone else 5k a year?

[Roadmap2Retire]

There goes another one. Johnson Controls (JCI) moving to Ireland with the Tyco (TYC) deal

http://www.theglobeandmail.com/report-on...e28368145/