Thursday, April 10, 2014
US Corporations Have over $2 Trillion Stashed Overseas
http://www.huffingtonpost.com/2014/04/08/profits-overseas-untaxed_n_5114300.html. DUE 14 Apr 2014. Why do corporations say they have money stashed overseas?? Are there other reasons the article lists for this offshore cash? Why is this bad for the US economy? What solutions would you offer to get US corporations to keep more money at home??
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Corporation stash their money overseas to avoid taxes here in the U.S.. They believe that by bringing headquarters and other various business endeavors over to other countries, they can expand their markets, avoid taxes, and continue to bring in extensive profits. The issue stands, however, that taking U.S. business out of the U.S. is bad for the economy. Part of the GDP equation includes the value of final goods and services in a year produced within a country. If we expatriate our businesses, all we can do is hope for the best because businesses and consumers are the most powerful things that will propel this economy forward.To keep more money at home, there a relatively simple solutions, assuming we can get politicians to get on board which rarely happens at this point. You can lower taxes on businesses which would attract them to return or stay. You can provide subsidies to those businesses that produce too little at such a high cost, again boosting production, good for the GDP. The bottom line is taking more considerate action to benefit those that will come to benefit the economy most.
ReplyDelete"Foreign profits held overseas by U.S. corporations to avoid taxes at home nearly doubled from 2008 to 2013 to top $2.1 trillion, said a private research firm's report, prompting a call for reform by the Senate's top tax law writer."
ReplyDeleteThis is a staggering amount of money.
Corporations keep their money outside of the United States ultimately to avoid taxes and keep production costs low. Keeping their money outside of the United States allows corporations to build new buildings and purchase raw materials without taxes, thus keeping the prices of them much cheaper. This statement is confirmed by the article: "Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore for years if they are classified as indefinitely invested abroad."
This is bad for the United States' economy because it causes there to be less money circulating, and as a result brings our economy down.
The solution I would offer in order to encourage U.S companies to keep their money at home is to lower taxes. The primary reason that businesses store their cash elsewhere is because of high taxes, and if we lower them, we will surely see immediate results regarding this issue.
This is an issue that quickly needs to be addressed in order to aid our ailing economy.
Anita Pizzirani (Pizza)
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It is astounding that the amount of money being stashed overseas has almost doubled from 2008 to 2013. Corporations claim they have money stashed overseas for reasons such as, "these overseas earnings have been reinvested in active business operations like manufacturing facilities and loans to non-U.S. customers." We all know the real reason they do this is to not have to pay U.S. taxes on the money. This is detrimental to the economy because there is less money being spent here. Also, it isn't fair the poor and middle class because the rich are not being forced to pay as many taxes. In order for corporations to keep their money at home, I would lower taxes.
ReplyDeleteI think this is a genius idea, and who every thought of this deserves a medal. How do you maximize profits that seem to be already maximized. loopholes in the economy allow these genius corporations to avoid paying the insane taxes of the US. I think this whole article is coming back to the poor being upset that the rich aren't taxed enough. If it was you, making billions and you found a way to make more, avoiding taxes, you would do it to. The reason corporations hold their money over seas is because foreign profits held overseas by U.S. corporations are not taxed they now have around $2.1 trillion stashed overseas, said a private research firm's report, prompting a call for reform by the Senate's top tax law writer. GE said in a statement: "GE operates in more than 170 countries, and most of these overseas earnings have been reinvested in active business operations like manufacturing facilities and loans to non-U.S. customers." Its bad for the economy because our money is leaving, but that's not their problem. If the economy is so fragile that companies have to help it run than America is not as strong of a country as people think. I think they should keep up the good work, and keep the money over seas
ReplyDeleteCorporations have started stashing money overseas to avid paying the higher taxes here in the United States. The taxes have nearly doubled within the years 2008 to 2013 to top $2.1 trillion. The corporations believe that by bringing their tactics to other foreign countries they are expanding their markets, avoiding the high taxes, and generating a higher profit margin. However, when you put this into perspective, bringing the money out of the United States is entirely bad for the overall economy. Although this keeps the production costs low, in the long run it is hurting the business. Keeping the corporations money outside of the United States allows the corporations to build new buildings and purchase raw materials without paying the high taxes in keeping it within the United States taxes, thus keeping the prices of the product much cheaper. This statement is confirmed within the article. "Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore for years if they are classified as indefinitely invested abroad” Businesses and the consumers are the only thing keeping the United States economy alive. Thus, for this reason we see that if the businesses are now moving to foreign markets, our economy will start to tank as the consumers start to move over to foreign goods and foreign markets. The less amount of money circulating within the Unites States economy, the less our economy has to offer. I propose that we lower the taxes placed on businesses here in the United States. This will allow them to change their mindset about keeping their materials and money here in the United States. The whole reason that they are bringing their money overseas is because of the high taxes, so if we changed this, they would want to keep the money closer to home. This issue should be solved as quickly as possible before our economy takes an even bigger turn for the worst.
ReplyDeleteCorporations invest a good chunk of their money overseas in order to avoid taxes, expand their business, and maximize profits. Some of the companies doing this are the wealthiest in their business, including Apple, Microsoft, GE, Merck & Co, and Pfizer. Since loopholes in rules and regulations allow them to escape the 35% tax rate in the U.S., these companies' earnings overseas have increased a whopping 93% since 2008. This is all bad for the U.S. economy because it results in a lower GDP (which includes the sale of final goods in the country). It hinders our country's potential of earning and becoming more prosperous than it is now. The first step to fixing the damage caused by these companies investing overseas would be for the Congress to put their foot down and create laws that will help the national economy rather than protecting only the businesses.
ReplyDeleteThe reasoning behind Corporations stashing their money overseas is avoid taxes in the U.S. This is due to the fact that these corporations believe that by bringing business endeavors over to other countries, they can expand their markets, avoid taxes, and continue to rake in massive profits. This practice keeps the production costs low, however, in the long run it is hurting the business.This is detrimental for the United States' economy because it causes less money to be in circulation, and as a result brings our economy down. This hinders our country's potential of advancing our economy and becoming much more prosperous. I feel as if the best solution is that we lower the taxes placed on businesses here in the United States. This will completely redefine the way we conceptualize the flow of money in the US. It will perpetuate a change in their mindsets of the masses in terms of the retainment of materials and money here in the United States.
ReplyDeleteForeign profits held overseas by U.S. corporations to avoid taxes at home nearly doubled from 2008 to 2013 to top $2.1 trillion. Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore for years if they are classified as indefinitely invested abroad. Putting money overseas has a huge negative impact on our economy. The more money we have overseas, the less money supply. As money supply goes down, the interest rates go up. Higher interests rates discourage people from spending, which negatively impacts our GDP equation. To make the corporations keep their money in the US, the government has to make the corporations to realize that it is advantageous to keep their money in the US. This can be done by giving them tax breaks.
ReplyDeleteCorporations, thanks to the affirmative act of the U.S. Congress, have found yet another means to protect their profits from being squandered on the infrastructure in which they are supported by.
ReplyDeleteApple, Pfizer Inc., General Electric, and many other well-known mega-corporations have turned to tactics first pioneered by the Mafia, known as tax havens. These corporations stash their profits overseas, placing their headquarters and newly created shell companies in foreign countries. This allows corporations to expand their markets, continue to earn extensive profits, and avoid paying taxes. Yes I said avoid paying taxes…which sounds a lot like tax evasion; now if that isn’t insane enough for you, here’s the real kicker: IT’S ALL LEGAL! (At this moment I would just like to bring up the fact that if the working class…or whatever’s left of it anyway…were to have found a way to offshore their share of taxation it’d would be quickly criminalized.) **I’m sorry but someone had to say it.**
In the past elections, the topics of outsourcing and offshoring have been one of the key issues approached by political candidates. Offshoring/outsourcing spell out disaster for the U.S. economy as it harms GDP. A country’s GDP includes the value of final goods and services within the given year. Business and consumer relations are what make the economy prosperous.
In order to solve the issue of keeping more money within the U.S. is to give businesses incentives to either stay or return home. This can be done by substantially lowering taxes on businesses and providing companies who produce too little at such high costs with subsidies.
Corporations, usually large ones, store their money overseas in order to avoid taxes found in the United States. When companies stash their money in foreign countries, a U.S. law gives them the privilege of not having to pay income taxes. By holding money offshore, companies can avoid the 35 percent tax rate found here in America. Some companies claim that they are using the money stashed oversea to give loans and to reinvest in "active business operations." This is bad for America for the reason that the government now has less income to put towards projects to better society as a whole. Instead, this offshore money is being used to fill the pockets of corporate big whigs who only care for themselves. Also, putting money overseas lowers the money supply and worsens the crowding out effect. I don't think the solution to this problem is to attempt to convince these companies to put their money back in America. Instead, I think that Congress needs to lay down new laws that prohibit this greed driven idea and force companies to put their money back in America.
ReplyDeleteCorporations have money stashed overseas because it is cheaper that way. If their money is overseas and not in America which is more expensive they avoid taxes that are “nearly doubled.” According to U.S law, corporations do not have to pay income tax on most, not all, of their overseas profits until they are brought back. The profits are usually held overseas for years. Many of the corporations claim they are not doing anything wrong and are following the law. Another reason for the offshore cash is the expansion of business, to reach further than just the US. This is bad for the economy because it keeps away all the profits that add into the GDP and causes there to be less money circulating, or causing crowding out. The income tax rate is at 35% but as stated most corporations are even paying that much, I would suggest lowering taxes but they would probably find a loophole in there somewhere as well. Laws can be made about the taxation of oversea income.
ReplyDeleteCorporations stash their money overseas to avoid paying taxes when they bring the money into the U.S. As long as they classified as indefinitely invested abroad the overseas profits do not get taxed. These corporations are saving themselves from paying huge amounts of money as their profits grow, so do their pockets. Throughout history and very evident even today, is the ability for people and corporations to reap benefits through loop holes in the system. Not only are these companies stashing profits overseas they are also taking their business overseas as well, selling to non-US buyers.
ReplyDeleteOf course this is not good for the US economy. First we don't have money to spend and now our BUSINESS is going elsewhere. Our money supply is in the hands of corporations only concerned for themselves and nonetheless not even in our country. What we need is to give these corporations an incentive, as we have learned throughout microeconomics is that people weigh decisions based on benefits. These corporations are choosing to keep their money abroad because the get more money that way. Either we provide incentive to these companies or we tear 'em down and create a law to fix this loophole, but this cannot continue.
The main reason why so many big corporations have their money stashed in oversea accounts would be that they don’t have to pay the income tax on them. The United States does not require corporations to pay these taxes if their money is stored in overseas accounts such as Switzerland. Some of these companies are claiming that they are using the money they stashed oversea to give loans and to reinvest in "active business operations.”. Another reason why they put their money in offshore accounts is to expand their markets and to earn sizeable profits. The main reason why this is bad for the economy would be that it is contributing to the crowding out effect and that it is keeping away all of the profits that should be earned in the United States, but instead they are in other countries because of tax evasion. I believe that there should be laws created in order to stop companies from putting their money in offshore accounts because it is only benefiting the companies, not the United States. There should be major fines that would be enforced to those who are caught using offshore accounts to evade their taxes. Another way would be the use of incentives for companies to keep their money in the United States.
ReplyDeleteCorporations usually say that they have their money stashed overseas since they do not have to pay the income tax that is due on them. Other reasons that they would stash their money overseas is to expand their businesses in other countries, thus creating more profit for them. All of the corporation's doing will result in a lower GDP which indicates how well an economy of a state is doing. This is then bad for the US economy since it is not making money to its fulliest potential. A solution that would help bring back businesses into the US is to lower the tax rate on the income that corpotations get so that they can actually make a profit. If this method does not work, another could be just to allow Congress to make laws regarding this type of problem so that it would help everyone overall, not just the corporations itself.
ReplyDeleteMoney is sent by corporations to foreign banks and "stashed" overseas in an attempt to avoid taxation by the United States government. Offshore cash is not subject to being taxed, and therefore offers an opportunity to corporations to cheat the system and avoid paying any portion of the money earned, which was earned in America, to the government. The article also makes the claim that money is held in offshore accounts because it is earned and invested in non-U.S. based pursuits. However, the companies themselves, though operating overseas, are still United States-based companies. Without the money that the United States government could receive from taxing these corporations, it is unable to sufficiently fund social welfare programs that give consumers the support to buy items from the corporations in the first place, meaning that the companies are hurting themselves along with the entire economy when they refuse to keep their money in domestic accounts. The best way to ensure that money is kept in America would either be to (a) change the way we count money for taxation, possibly asking to tax all money earned by domestically-based corporations or asking to tax all money earned in America by corporations or (b) limiting the amount of money that corporations can keep in offshore accounts. The latter option requires heavy surveillance and is susceptible to corruption, as well as prone to providing loopholes. Thus, the best way to address the situation would be to change the tax code for corporations. This would require decisive action by congress, the likes of which current politicians would never be able to achieve. Thus, the problem is essentially unsolvable, even with a clear solution. The implementation of such a tax code would never be feasible. Therefore, we must accept tax evasion by large corporations as part of the modern economy in which we operate.
ReplyDeleteMany corporations say they hold millions of dollars overseas is because of investments and business ventures in other countries. Though the article disagrees citing the fact that overseas monies are unable to be taxed by the US government. The significant lack in taxes and the immense pile of sitting money can slow down the economy. Some solutions would be passing laws that tax overseas monies but that would take a long time. Incentives to bring monies back to the states could help but it would cost something. I typed this while taking a shit.
ReplyDeleteCorporations are hiding funds overseas to escape being taxed. They have created overseas accounts to store money, that they claim was earned outside the U.S. and will be invested outside the U.S.. The amounts stored in these offshore accounts have nearly doubled in the past five years. These offshore accounts hide money from the government, which in turn hurts our economy because the government is losing tax revenue. That lost revenue means that we cannot pay off the deficit, that means that the national debt gets even larger. Some debt is healthy, but arbitrary debt is just a bad idea. There are better things to go into debt for than the greed of companies. The article says that no solution is likely anytime soon, but I believe that steps can be taken to prevent this issue from getting any more serious. The government has to monitor the money that corporations are sending out of the country, and ensure that they tax the money that is sent to offshore accounts. Congress has agreed to a solution, but it's tax rate is too low to make up for all of the money that has already been lost. These companies need to be taxed fully for the money they have sent overseas. That is the only way to repair the damage these offshore accounts have already done to the U.S. economy.
ReplyDeleteCorporations stash their money overseas to avoid taxation by the United States government the. The article states that Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States. These earnings can be held offshore for years if they are classified as indefinitely invested abroad. Corporations also stash money offshore because most of these overseas earnings have been reinvested in active business operations like manufacturing facilities and loans to non-U.S. customers. The offshore storing of money by thede corporations is affecting the United States' GDP and leaving less money to be circulated here in our own country. To get corporations to stop stashing offshore, we can lower taxes on their profit, thus giving them incentive to allow the money paid in taxes to circulate here & better our own economy.
ReplyDeleteAllegedly, corporations have money stashed overseas ultimately to avoid paying income taxes here in the United States, extend their companies, and earn a higher profit margin. Not to mention, the business firms have favored capital expenditure and dividend spending at the expense of share repurchases and acquisitions. “Under U.S. law, corporations do not have to pay income tax on most of their overseas profits until they are brought into the United States.” This is absolutely terrible to our U.S. economy for several reasons. First, the U.S. cannot be running trillion-dollar deficits year after year when these companies and establishments are sitting on piles of money. And secondly, companies like Apple and Microsoft are personally going to suffer. They need to pay off their taxes in order to use the remaining cash to buy back shares, which will increase productivity. Avoiding taxes and letting the money sit unproductively are going to create disadvantages and risks. I believe that these corporations ought to accept reality and cut their losses. Tax laws need to encourage U.S. companies to repatriate money because it is doing little in terms of helping our economy. But, I honestly doubt that will happen any time soon. Hence, we need to lower the taxes placed on businesses here in the United States. This will allow them to realize how productivity will rise and will redefine the way we conceive the flow of money in the U.S.
ReplyDeleteCorporation stash their money overseas to avoid taxes here in the U.S.. They believe that by bringing headquarters and other various business endeavors over to other countries, they can expand their markets, avoid taxes, and continue to bring in extensive profits.This is all bad for the U.S. economy because it results in a lower GDP (which includes the sale of final goods in the country). It hinders our country's potential of earning and becoming more prosperous than it is now.There should be major fines that would be enforced to those who are caught using offshore accounts to evade their taxes. Another way would be the use of incentives for companies to keep their money in the United States.
ReplyDeleteCorporations invest a great deal of their money overseas in order to avoid taxes, expand their business, and maximize profits. Several companies doing this are some of the wealthiest in their business, including Apple, Microsoft, GE, Merck & Co, and Pfizer. Because loopholes in rules and regulations allow them to escape the 35% tax rate in the U.S., their earnings overseas have increased 93% since 2008. This is all bad for the U.S. economy because it results in a lower GDP (which includes the sale of final goods in the country), as it decreases employment to us workers, decreases demand of US goods, and increases the price to US consumers. The first step to fix the damage caused by the companies investing overseas would be for the Congress to put their foot down and create laws that will help the national economy rather than protecting only the businesses.
ReplyDelete