Comments on: Happy tax day: Are Silicon Valley companies paying their fair share?

By: bobc

bobc — Wed, 11 Jul 2012 14:23:10 +0000

Until the corporate rate of 35% is paid-in-full for taxes, all government services should be withheld from these firms. All corporate copyrights, and patents owned by these companies should be refused to be protected by any justice department, and maybe even be auctioned off to any other firm that would pay the due taxes.

By: rgrace

rgrace — Tue, 01 May 2012 05:30:02 +0000

Apple, Cisco and other companies are being disingenuous when they claim these huge-sounding amounts that they’re paying in taxes. It’s not the dollar amounts, it’s the percentages, which are at historic lows. Further: Apple sitting on $110B of extra cash is a significant harm to the economy, because that money is doing nothing whatsoever except to fatten the pockets of the company through passive interest-earning and investment income through bond purchases. None of this would matter much if the budget hadn’t been blown up through two foreign wars – you’re right, Chris – and reckless tax cutting. This is established fact. Apple creates no jobs in this country. Almost everyone they hire in the U.S. is a contractor, who can be let go at any time and who receive lower salaries and no benefits. I know people who have worked there as such and it is almost impossible to get hired there. So much for the $110B in ca$h.

By: Chris O'Brien

Chris O'Brien — Wed, 18 Apr 2012 18:13:57 +0000

@Scott: The problem with this argument is twofold. First, the companies are hardly innocents here. This convoluted tax system and assorted loopholes did not happen by accident. The are the result of billions of dollars worth of lobbying by these companies. They have twisted the tax code beyond understanding, and to their advantage. As such, as current “reforms” are being floated, we should rightfully be suspicious of them. Which brings me to the other problem: The result of these breaks and loopholes and is that companies are contributing a far lower percentage of tax revenue to the federal budget than never before. Yes, I’m sure government spending needs to be controlled in some respects. Two military misadventures have not helped in that regard. But we shouldn’t kid ourselves that corporations have managed to shift the tax burden to you and me.

By: Scott Wharton

Scott Wharton — Wed, 18 Apr 2012 15:58:57 +0000

Chris,

Don’t blame the companies for playing the game with the rules they are dealt by government. Blame our convoluted tax system that encourages companies shifting money around to lower their rates.

Their will always be ways for companies to lower their taxes but a simpler system with fewer corporate tax breaks and loopholes will at least make it less advantages to do so. Also, some companies will take more advantage of the system leaving other less savvy (read: mostly smaller companies) to pay the much higher rates.

One other thing to consider is that corporate taxes are double taxed – once at the corporate level and another time at the consumer level through dividends, capital gains etc. so it’s not always the case that low corporate tax payments = no taxes – just shifting them around.

The larger issue we face is the yawning gap between what our governments spends and what it collects increasingly have no correlation.

By: Chris O'Brien

Chris O'Brien — Tue, 17 Apr 2012 22:43:32 +0000

Yes, though more of the tax burden is falling on them, rather than their employers, because those companies are keeping more of their cash stashed overseas.

By: ltlJohn

ltlJohn — Tue, 17 Apr 2012 22:00:48 +0000

On the other hand….

Thousands of Silocon Valley high tech employees pay sales tax, gas tax, state income tax, federal income tax – they go to eat and play and those companies also pay taxes and their employees pay taxes.
I’d rather have all the tech companies with little taxes then no tech companies.

ltlJohn

By: Chris O'Brien

Chris O'Brien — Tue, 17 Apr 2012 21:54:56 +0000

I would agree somewhat, but also have a nuanced view there. Yes, most semiconductor companies have moved manufacturing out of the valley. But in some cases, they have more jobs and more sales overseas because those markets have developed and they simply want bodies closer to the customers. That strikes me as a legitimate. In between, however, are companies that play games by setting up shell foreign subsidiaries, and “transferring” assets or IP to these entities, allowing them to claim sales in places like Ireland or the Carribean, when in fact all they did was change the address on a patent. Thanks to the lack of transparency, it’s hard to know where each of these companies falls.

By: brian

brian — Tue, 17 Apr 2012 19:54:54 +0000

funny……they are also making more of their money overseas in case you hadn’t noticed…..2006 to 2011 almost every company accelerated its layoffs in the USA and hired in Asia at an alarming rate. In the past 30 yrs, all semiconductor manufacturers left the Silicon Vallley!The departure continues and many companies declared themselves foreign entities too….which also will continue. Why not eliminate corporate taxes and bring foreign Cos here? It works.