People are up in arms about corporations not paying taxes. Here’s how they do it.
These companies do most of their business in the United States and other moderate-tax countries such as Germany, England and Spain.
But they often put their intellectual property – such as trademarks or patents – into subsidiaries in low-tax countries such as Switzerland, Ireland, Bermuda or the Cayman Islands.
When one of the company’s subsidiaries in a higher-tax country sells a product, it pays a royalty to the subsidiary in the tax haven. That shifts profits to the low-tax country, while the subsidiary in the high-tax country gets a tax deduction for the royalty payment.
“The income is taxed at a lower rate, and the deductions are enjoyed at a higher rate,” says Robert Willens, a Wall Street accounting expert.
And there’s other ways it moves around too. Read the article.
So all that’s happening is people are seeing large, faceless, evil corporations with their fat wallets and rich CEO’s wheedling out of paying taxes. It’s not fair… especially because it’s depriving my favoriate government entitlement program of funding!
I see.
But is anyone asking the more fundamental question? Why are these corporations shifting money around like this? Why are they not wanting to pay the taxes?
Because they want to keep their money.
You know… like you and I do.
You work hard for the things you earn in life. You want to keep a hold of them. You want to reap the benefits of your blood, sweat, and tears. And when someone comes along and takes it from you and leaves you with little left over because “they need it” or “they deserve it” for whatever reason you don’t see fit… it really gets you upset.
So how about this.
Why not figure out how to keep that money here in the first place.
Why not address the more fundamental issue — that people (and corporations) want to keep the things they earned. Allow people to keep their things, even if it is just their GPA.
You’re worried about a growing deficit? That the .gov’s S&P rating was downgraded? So then, why are you still spending money like a madman? If money isn’t coming in, you need to stop sending it out.
People really aren’t all that unwilling to part with their money — when it’s going to be spent on something they consider worthwhile. So imagine… if people and corporations are working so hard to not part with their money and not give it up, seems to me it must be being spent on a lot of things that aren’t worthwhile.
Maybe we should address that issue first.
Stuff From Hsoi 
Actually, we should address an education issue, first. One that puts to rest this entire debate…
Corporations DON’T PAY TAXES.
Yes, definitely, corporations (like you and me) want to hang on to all their cash. But they don’t eat the expense of their taxes like you and I have to. That expense is figured into the price of their products and passed on to their customers. Eventually, all goods (either in finished form, or as things that are made to support the production of the finished form) trickle down to the consumer – with all of those taxes built into their price. And you and I pay for the end good and the taxes that go with them.
It’s one of the biggest tricks the politicians have played on the sheep. Use class warfare to convince the sheep to pay more in taxes. In actuality, were we to dramatically reduce or eliminate corporate taxes here in the US, we’d see more businesses return to our shores, resulting in more employment, more spending, and (as the so-called experts figure it) higher tax revenues than were lost by eliminating corporate taxes… Go figure…
Ah yes, good distinction to make and quite true. And it’s not just taxes, it’s “fees”… because they don’t want to use the word “tax” but “fee” somehow works out (look at your phone bill). And again, those fees just get passed right along to the consumer.