How Apple and Other Corporations Move Profit to Avoid Taxes - NYTimes.com - 1 views
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There is something ridiculous about a tax system that encourages an American company to invest abroad rather than in the United States. But that is what we have.
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“The fundamental problem we have in trying to tax corporations is that corporations are global,” says Eric Toder, co-director of the Tax Policy Center in Washington. “It is very, very hard for national entities to tax entities that are global, particularly when it is hard to know where their income originates.”
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Some international companies hate that idea, of course. They warn that we would risk making American multinational corporations uncompetitive with other multinationals, and perhaps encourage some of them to change nationality.
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The other way is to move to what is called a territorial system, one in which countries tax only profits earned in those countries.
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In this country, notwithstanding the high rate, the corporate income tax now brings in about 18 percent of all income tax revenue, with individuals paying the rest. That is half the share corporations paid when Dwight Eisenhower was president.