Nobody is cheating

[Tommy Troll]

The issue is a U.S. tax code that allows U.S. companies to shield overseas profits from U.S. income taxes. The result is that our companies have trillions in stranded cash sitting in foreign accounts. A stupid law yields stupid results that benefit nobody.

[Laszlo Lebrun]

On 23.05.2013 14:42, Tommy Troll wrote:
> The issue is a U.S. tax code that allows U.S. companies to shield overseas profits from U.S. income taxes. The result is that our companies have trillions in stranded cash sitting in foreign accounts. A stupid law yields stupid results that benefit nobody.
>

They cheated before...
Their lobbyists made the law, indeed.
They have purchased every influent politician to make the looplholes
just like they are today.


--
One computer and three operating systems, not the other way round.
One wife and many hotels, not the other way round ! ;-)

[Lloyd]

In article <c625bdb5-700d-4e69...@googlegroups.com>,

Finally something we can agree on!

[ed]

The law isn't stupid. It is inconsistent with foreign laws which allow for unforeseen loopholes which more aggressive accountants take advantage of.

[Nashton]

On 05-23-13 1:18 PM, ed wrote:
> The law isn't stupid. It is inconsistent with foreign laws which

> allow for unforeseen loopholes which more aggressive accountants take advantage of.
>

Accountants, tax lawyers, legal accountants, international legal
specialists and a whole army of people hired in order to take advantage
of loopholes and inconsistencies in international tax laws, that vary
greatly from one jurisdiction to another. Countries are nothing but
parking spaces for the money of huge corporations that pick and choose
for their own benefit.

I'm all for profit and capitalistic activities, but these people have
taken it to the finest art ever devised by man.

[Alan Baker]

In article <knlik9$481$1...@speranza.aioe.org>, Nashton <na...@na.ca>
wrote:

But you only express these objections when Apple is involved...

--
Alan Baker
Vancouver, British Columbia
"If you raise the ceiling four feet, move the fireplace from that wall
to that wall, you'll still only get the full stereophonic effect if you
sit in the bottom of that cupboard."

[Justin]

On Thu, 23 May 2013 14:57:10 +0200, Laszlo Lebrun wrote:

> On 23.05.2013 14:42, Tommy Troll wrote:
>> The issue is a U.S. tax code that allows U.S. companies to shield
>> overseas profits from U.S. income taxes. The result is that our
>> companies have trillions in stranded cash sitting in foreign accounts.
>> A stupid law yields stupid results that benefit nobody.
>>
> They cheated before...
> Their lobbyists made the law, indeed.
> They have purchased every influent politician to make the looplholes
> just like they are today.

The law is the law. Obeying the law is moral and just. Any entity who
obeys the law is not doing anything wrong.
The law is sacred.

[Tommy Troll]

On Thursday, May 23, 2013 12:18:26 PM UTC-4, ed wrote:
> The law isn't stupid. It is inconsistent with foreign laws which allow for unforeseen loopholes which more aggressive accountants take advantage of.

Our law is stupid. Fixing it is simple. Tax profits of U.S. companies no matter where they are earned, but allow credits against taxes owed here for taxes paid in to other governments. Our current tax code treats U.S. based companies as if they did not even own their foreign subsidiaries. It is that way because companies bought the current law with political donations.

It is also stupid for another reason. All that company cash sitting, stranded, in overseas bank accounts is money that could be reinvested in wealth-producing economic activity. If there was no tax reward for parking earnings, we might actually see businesses using that cash to the benefit of the global economy.

This is just another example of the horrible consequences of a system that allows special interest groups to deeply influence the law. Don't get me started on biofuels companies, and the warped energy policy that they have fostered upon the American public!

[Laszlo Lebrun]

On 24.05.2013 14:15, Tommy Troll wrote:
> Our law is stupid. Fixing it is simple.

Fixing it *appears* simple.
You just need *to fix* a few thousands lobbyists.

[-hh]

On May 24, 8:15 am, Tommy Troll <thomas.e.e...@gmail.com> wrote:
> On Thursday, May 23, 2013 12:18:26 PM UTC-4, ed wrote:
> > The law isn't stupid. It is inconsistent with foreign
> > laws which allow for unforeseen loopholes which
> > more aggressive accountants take advantage of.
>
> Our law is stupid. Fixing it is simple. Tax profits of
> U.S. companies no matter where they are earned,
> but allow credits against taxes owed here for taxes
> paid in to other governments.

Isn't that what the law already is, Tom?

The whole 'blow-up' here is that foreign earnings were taxed at a rate
substantially lower than US Domestic rates, and if those earnings were
brought back to the USA, the corporation is subject to paying the
difference.

Notional example:

Say:
Country A has a 10% corporate tax rate.
USA has a 35% corporate tax rate.

Now:
Companies X & Y each sells products in Country A, and makes $1B on
it.

Company X is based in Country A: they pay $100M in taxes and they're
done.

Company Y is based in the USA. They pay $100M to Country A ... and
then also pay ($350K-$100K) = $250K to the USA.

Clearly, this puts Company Y at a big disadvantage versus Company X.

> Our current tax code treats U.S. based companies as
> if they did not even own their foreign subsidiaries. It is
> that way because companies bought the current law
> with political donations.

Not at all. Consider a USA Company Z with Subsidiary Z' in Country A
within the above scenario:

In Country A, Subsidiary Z' makes the $1B, and pays 10% ($100M) to
Country A. So long as there's no return given back to Company Z,
there's no additional taxes due to anyone...

Now before you claim that this is utterly unfair, let's change that Z-
Z' affilation, to make this a product sale betweeen Z and a new
company W:

Company Z buys products from Random Company W. W makes $1B profits
and Z's accounting doesn't mark up their wholesale cost vs retail sale
for this component.

W: Pays $100M to Country A
Z: Paid $1B to W, but sells this good in the USA for $1B - - that's
$0 profit from this imported good, so has $0 taxes due.

Similarly, consider Z doing the same thing, but now includes a markup:

W: Pays $100M to Country A
Z: Paid $1B to W and sells it for $1.1B in the USA: owes 35% of
$100M to the USA for taxes, which is $35M.

> It is also stupid for another reason. All that company
> cash sitting, stranded, in overseas bank accounts is
> money that could be reinvested in wealth-producing
> economic activity.

And it is doing just that: it is building factories in China, Retail
Stores in EU, etc.

> If there was no tax reward for parking earnings,
> we might actually see businesses using that cash
> to the benefit of the global economy.

Logic Fail, Tom: you've applied a nationalistic filter - - creating
more infrastructure in Asia & Europe does most certainly benefit the
*global* economy ... it simply just doesn't benefit the USA's

economy.


> This is just another example of the horrible
> consequences of a system that allows special
> interest groups to deeply influence the law. Don't
> get me started on biofuels companies, and the
> warped energy policy that they have fostered
> upon the American public!

Unfortuantely, there's many such examples. Some of us are quite
familar with ADM's manipulation of public policy to benefit their corn
interests which go back to at least the 1977 imposition of sugar
tariffs and sugar quotas ... which perverted capitalism by creating
trade barriers so as to create an artificial market advantage to the
domestically produced High Fructose Corn Syrup (HFCS).

BTW, there's some medical research that's suggesting a causal link
between HFCS consumption and Pancriatic Cancer.

And yes, this perversion of the marketplace has been expanded again
due to policial lobbying, to now also include the negative-energy-
balance technological travesty of corn-based Ethanol production, which
was done with the forced creation of a market through the DOT/EPA
mandating that it be blended into gasoline...even despite the fact
that higher concentration rates have been proven to cause physical
damage the end-use vehicles of consumers.


-hh

[Tommy Troll]

On Thursday, May 23, 2013 8:42:23 AM UTC-4, Tommy Troll wrote:
Logic Fail, Tom: you've applied a nationalistic filter - - creating
more infrastructure in Asia & Europe does most certainly benefit the
*global* economy ... it simply just doesn't benefit the USA's economy.

Fact fail: The trillions of dollars are sitting in corporate cash piles, and not getting invested. That money is stranded in the place where it was taxed. Moving it can generate tax liabilities, so it just sits there.

Here is another example of how twisted it gets: Back in the early 1990s my company had a FDA-regulated pharmaceutical production facility in Puerto Rico. It was producing a good product at a competitive cost, but we were paying U.S. taxes on the profits. Someone in finance gets the idea that we should move the equipment to Mexico, who offered us a tax holiday for increasing investment and employment in Mexico City. So we moved the equipment. It took us a year to get it working at all again, but the Mexicans could not produce a product that met FDA standards. We lost about 2 years of sales and profits. That line was eventually sold to a competitor for almost nothing. Doing things for tax reasons alone rarely makes sense.

[-hh]

On May 24, 6:24 pm, Tommy Troll <thomas.e.e...@gmail.com> wrote:
> On Thursday, May 23, 2013 8:42:23 AM UTC-4, Tommy Troll wrote:
>
> Logic Fail, Tom:   you've applied a nationalistic filter - - creating
> more infrastructure in Asia & Europe does most certainly benefit the
> *global* economy ... it simply just doesn't benefit the USA's economy.
>
> Fact fail: The trillions of dollars are sitting in corporate
> cash piles, and not getting invested.

Incorrect: the money is in "liquid assets".

> That money is stranded in the place where it was taxed.
> Moving it can generate tax liabilities, so it just sits there.

Yes, its mobility is limited...but essentially in the sense that it
gets taxed if brought to the USA, not necessarily so for other
jurisdictions. Don't you remember Apple dropping a couple of billion
for factory tooling a year or two ago? Do you really think that that
got paid out of money that was in the USA?

> Here is another example of how twisted it gets: Back in
> the early 1990s my company had a FDA-regulated pharmaceutical
> production facility in Puerto Rico. It was producing a good
> product at a competitive cost, but we were paying U.S.
> taxes on the profits. Someone in finance gets the idea
> that we should move the equipment to Mexico, who offered
> us a tax holiday for increasing investment and employment
> in Mexico City. So we moved the equipment.

Which was after the expiration of the incentives to be in Puerto Rico
in the first place, right?

> It took us a year to get it working at all again, but the
> Mexicans could not produce a product that met FDA standards.
> We lost about 2 years of sales and profits. That line was
> eventually sold to a competitor for almost nothing. Doing
> things for tax reasons alone rarely makes sense.

Wrong lesson. New processes always have risk, particularly when in
new regions. Shutting down one facility in the hopes that a different
one can do the job was high risk - - particularly since it also sounds
like you didn't bother with running a small piloting operation
first.


-hh

[Tommy Troll]

On Friday, May 24, 2013 7:32:05 PM UTC-4, -hh wrote:
> On May 24, 6:24 pm, Tommy Troll <thomas.e.e...@gmail.com> wrote:
>

<snip>

>
> Wrong lesson. New processes always have risk, particularly when in
>
> new regions. Shutting down one facility in the hopes that a different
>
> one can do the job was high risk - - particularly since it also sounds
>
> like you didn't bother with running a small piloting operation
>
> first.
>
>

Yes, our PR tax holiday had run out. You don't know much about the business we ran. The equipment was, very unique, purpose-built. The product itself is one-of-a-kind, and very technical to make. A small pilot plant would have been very expensive to build, and would not have duplicated running the full scale operation.

[-hh]

On May 24, 9:41 pm, Tommy Troll <thomas.e.e...@gmail.com> wrote:
> On Friday, May 24, 2013 7:32:05 PM UTC-4, -hh wrote:
> > On May 24, 6:24 pm, Tommy Troll <thomas.e.e...@gmail.com> wrote:
>
> <snip>
>
> > Wrong lesson.  New processes always have risk, particularly when in
>
> > new regions.  Shutting down one facility in the hopes that a different
>
> > one can do the job was high risk - - particularly since it also sounds
>
> > like you didn't bother with running a small piloting operation
>
> > first.
>
> Yes, our PR tax holiday had run out.

And rather than stay put and pay taxes ... your business tried to run
to the next shelter. And Got Screwed.

> You don't know much about the business we ran. The equipment was,
> very unique, purpose-built. The product itself is one-of-a-kind,
> and very technical to make.

Golly, it is just like EVERY OTHER modern pharmacological! FYI -
maybe you should check a map to see how many of Big Pharm (and small)
have had facilities here in Northern NJ over the past forty or so
years.

> A small pilot plant would have been very expensive to build,
> and would not have duplicated running the full scale operation.

No, the reality is that the Accountants were allowed to dictate the
budget (Cost) and timeline (Schedule) ... so the product (Performance)
was doomed to fail.

So where's the manufacturing done today?


-hh

[jay birdsong]

"-hh" wrote in message
news:295da353-b4fb-4170...@m18g2000vbo.googlegroups.com...

Golly!! Comments from someone who wasn't there, has zero knowledge of
the operation, but keeps pulling answers from his ass. How droll.

>So where's the manufacturing done today?

Why, you need a job cleaning toilets?

[Tommy Troll]

You go that right

>
>
> So where's the manufacturing done today?
>
>

Good question. Long story short, we sold the product to a competitor. They moved the production line, but I don't know where it went. After I retired in 2003 my company bought out that competitor, and now has the product back. I do know that the Mexico City facility was closed some years ago. The company we sold the product to has its division HQ in the Kansas City area. Most of their manufacturing is there, and I would guess that is where this product is now made.

[ed]

The law is almost that, but not quite. It only gets taxed when the foreign profits are brought back to the us.

[-hh]

On May 25, 11:58 am, Tommy Troll <thomas.e.e...@gmail.com> wrote:
> On Friday, May 24, 2013 10:23:15 PM UTC-4, -hh wrote:

> > ... the reality is that the Accountants were allowed to dictate the

> > budget (Cost) and timeline (Schedule) ... so the product (Performance)
> > was doomed to fail.
>
> You go that right

Unfortunately, it happens too often, regardless of the end product.

> > So where's the manufacturing done today?
>
> Good question. Long story short, we sold the product to a
> competitor. They moved the production line, but I don't know
> where it went. After I retired in 2003 my company bought
> out that competitor, and now has the product back.

Big Circle ;-) There's been a lot of buy-outs and consolidation of
the players with a lot of interface with the EU standards. The
research labs have quietly been going away ... I suspect so as to be
able to claim that the IP wasn't in the USA, as well as perhaps for
less stringent human trials standards than for what HIPAA requires
here.

> I do know that the Mexico City facility was closed some
> years ago. The company we sold the product to has its
> division HQ in the Kansas City area. Most of their
> manufacturing is there, and I would guess that is where
> this product is now made.

Interesting; even though I've been to KC dozens of times, I wasn't
aware that there was much of that industry segment in that area; of
course, I was usually just pointing the rental car east to go out to
Independence.

Just as well in a way ... the volcano outside of Mexico City is acting
up again; have a friend down there whose winter casa is in the
evacuation zone.

-hh

[Tommy Troll]

On Saturday, May 25, 2013 12:47:09 PM UTC-4, -hh wrote:
> On May 25, 11:58 am, Tommy Troll <thomas.e.e...@gmail.com> wrote:
>
> Big Circle ;-) There's been a lot of buy-outs and consolidation of
>
> the players with a lot of interface with the EU standards. The
>
> research labs have quietly been going away ... I suspect so as to be
>
> able to claim that the IP wasn't in the USA, as well as perhaps for
>
> less stringent human trials standards than for what HIPAA requires
>
> here.
>

Actually, this was in the animal drug division. Center for Veterinary Medicines is the regulatory arm that handles that class. The issue was that we could not meet the product standards for our own product. It was an animal safety issue too, not just some cosmetic problem.

> Interesting; even though I've been to KC dozens of times, I wasn't
>
> aware that there was much of that industry segment in that area; of
>
> course, I was usually just pointing the rental car east to go out to
>
> Independence.
>

There are several animal health divisions of Big Pharma in that area. Fort Dodge, now owned by Pfizer, is probably the biggest. It's about a $1-1.5 billion division. Not huge, but has about a 5% share of the global business.

[Flint]

On 5/24/2013 6:24 PM, Tommy Troll wrote:
> On Thursday, May 23, 2013 8:42:23 AM UTC-4, Tommy Troll wrote:
> Logic Fail, Tom: you've applied a nationalistic filter - - creating
> more infrastructure in Asia & Europe does most certainly benefit the
> *global* economy ... it simply just doesn't benefit the USA's economy.
>
> Fact fail: The trillions of dollars are sitting in corporate cash piles, and not getting invested.

Fallacy: Those corporate 'cash piles' aren't just 'sitting there'.
Even if they were, a portion of that cash is at least invested by the
banks holding it.

> That money is stranded in the place where it was taxed.

These 'stranded piles' of cash is socialist-speak gobbledygook...

> Moving it can generate tax liabilities, so it just sits there.




> Here is another example of how twisted it gets: Back in the early 1990s my company had a FDA-regulated pharmaceutical production facility in Puerto Rico. It was producing a good product at a competitive cost, but we were paying U.S. taxes on the profits. Someone in finance gets the idea that we should move the equipment to Mexico, who offered us a tax holiday for increasing investment and employment in Mexico City. So we moved the equipment. It took us a year to get it working at all again, but the Mexicans could not produce a product that met FDA standards. We lost about 2 years of sales and profits. That line was eventually sold to a competitor for almost nothing. Doing things for tax reasons alone rarely makes sense.
>

--
MFB

[Tommy Troll]

On Saturday, May 25, 2013 4:37:09 PM UTC-4, Flint wrote:
> On 5/24/2013 6:24 PM, Tommy Troll wrote:
>
> > On Thursday, May 23, 2013 8:42:23 AM UTC-4, Tommy Troll wrote:
>
> > Logic Fail, Tom: you've applied a nationalistic filter - - creating
>
> > more infrastructure in Asia & Europe does most certainly benefit the
>
> > *global* economy ... it simply just doesn't benefit the USA's economy.
>
> >
>
> > Fact fail: The trillions of dollars are sitting in corporate cash piles, and not getting invested.
>
>
>
> Fallacy: Those corporate 'cash piles' aren't just 'sitting there'.
>
> Even if they were, a portion of that cash is at least invested by the
>
> banks holding it.
>
>
>

Actually, U.S. banks are also sitting on piles of cash as a result of the Fed's bond buying program. Where is it invested? In the U.S. debt that is piling up at an incredible rate. There's a socialist scheme if there every was one.