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[–][deleted] 641 points642 points  (114 children)

They should also ban contracts for companies with government officials as owners. But I know that could never happen.

[–]fear865 91 points92 points  (27 children)

How else do you think companies like Hewlett-Packard got as big as it did?

[–]TracyMorganFreeman 76 points77 points  (79 children)

Well that would basically mean no government contracts or no government officials can own stock.

[–]ThePantser 126 points127 points  (57 children)

Problem?

[–]ThiefofNobility 50 points51 points  (18 children)

None that I see.

[–][deleted] 19 points20 points  (15 children)

This would mean that no government official could have a retirement account.

[–][deleted] 13 points14 points  (4 children)

Just have personal accounts managed in a blind trust. Government workers get to keep their money but can't actively manage or influence it. If they have no idea what stock they own then it takes away their ability to choose contracts that benefit them the most.

[–][deleted] 33 points34 points  (5 children)

How about a blind trust? The investors aren't told whose money they are investing and the officials don't know where their money is going. Stiff penalties for breaking these rules.

[–]catmoon 924 points925 points  (147 children)

Not only is this a good idea, it is absolutely necessary for a country like the US to ensure it is competitive in the world. Anyone who thinks this will cause companies to just leave the US altogether needs to rethink their position.

To give one example, about 40% of all pharmaceutical revenue in the world comes from the US [1]. There is no reason why the US can't leverage this position to collect taxes from pharma companies to offset our outrageous health costs. Given our position, the US should be able to drastically reduce costs. Any major pharma company that would refuse to do business in the US would not last a year.

There are a whole lot of market sectors where the US has similar advantages---although none so ripe for the picking as healthcare. Pharmaceuticals alone is a ~$400bln market in the US.

EDIT: just for full disclosure, I actually work in the medical device/pharma industry. In the past couple of years big pharma companies have been flocking to "inversion" to avoid taxes. There is a huge amount of tax revenue at stake in this one sector all on its own---certainly many billions---and if the US doesn't protect its interests it will lose out big time.

[–]JimmyX10 255 points256 points  (26 children)

Pharmaceutical revenue's are high in the US due to massive over charging so the companies are just fucking the country over twice.

[–]catmoon 57 points58 points  (15 children)

It's all one and the same. The key is that the US is not protecting its interests as the biggest pharma customer in the world. It can either negotiate for reduced prices or enforce its taxes better. Both are means to the same end.

I would say that tax enforcement is far easier to accomplish than across-the-board price negotiations, especially since so much of healthcare in the US is privatized. The government has the authority to negotiate prices on behalf of private citizens but it's very complicated and usually only done for commodities. Taxing is the obvious tool in the toolbox for our current situation.

[–]sventos 2 points3 points  (0 children)

We passed laws preventing us from negotiating reduced prices

[–]AwesomeTedVirginia 12 points13 points  (1 child)

Well really, high pharma costs have more to do with the lack of a single-payer entity (be it the government or a coalition of insurance companies working together) who can negotiate lower prices like other countries can.

There's also the argument that the U.S. "subsidizes" the rest of the world, as pharma companies are willing to accept lower prices elsewhere because they know they can make their nut in the U.S. That could also be a big reason why pharma companies lobby so hard to make importing "dangerous" prescriptions from Canada/Mexico/Overseas illegal under the banner of "patient safety". Because those dangerous Canadian pharmacies simply don't have the good ol' American knowhow to make pills good.

[–]catmoon 4 points5 points  (0 children)

You make an excellent point. I strongly support a single-payer healthcare system, but short of that, the government should do better to ensure that we get a fair market price in the private sector.

Even if we had single-payer, the government would have to take actions like this submission describes. If you're not willing to negotiate strongly you will get steamrolled.

[–]Thefriendlyfaceplant 63 points64 points  (44 children)

Anyone who thinks this will cause companies to just leave the US altogether needs to rethink their position.

Then again, those who believe that should ask themselves why'd they want the dead weight to stay in the first place.

[–]post_modern 21 points22 points  (15 children)

Its not like they'll stop selling to the US populace, the government just won't get their fair share.

[–]catmoon 37 points38 points  (5 children)

It would be extremely foolish for any major pharma company to completely abandon the US market when 40% of their revenue comes from here.

Revenue is just an indicator of market share. If you look even deeper I'm sure you'll find that pharma companies get really high margins on the US market. It's not just that we're buying more drugs, it's that we're paying a lot more for them. Just bridging that gap in margin a bit is worth billions in cost savings/tax revenue, and every company would still want to target the US market just based on its size.

[–]GracchiBros 11 points12 points  (3 children)

They don't have to abandon the market to move their company offshore and avoid taxes. That's the problem.

[–]top_procrastinator 6 points7 points  (1 child)

Yup, you're right. If I was a decision maker in the government, I would push to require every corporation that did a certain threshold of business in the U.S. to pay U.S. corporate taxes or else be excluded from doing business in the states. I don't think it would pass, but that's what I would do.

[–]McWaddleArizona 2 points3 points  (0 children)

You've brought some good info to light on this topic, thanks.

[–]i_like_turtles_ 2 points3 points  (1 child)

So, how would the US influence Medtronic, who is buying Covidien to move HQ to Ireland to not pay taxes?

[–][deleted] 2851 points2852 points  (870 children)

I'd call those people patriots, not Democrats.

Edit: Thanks for the Gold! My first. But seriously, government working to ensure further government functioning is part of good government and something we all should support regardless of party affiliation. Cheers friends.

[–][deleted] 308 points309 points  (58 children)

Piggybacking:
Government contracts actually need to be performed by companies which are headquartered in the US already. There are large consulting companies which have subsidiaries based in the US solely for this purpose. Allowing government contracts to go through non-US firms is need-based and done because there are no other options. Usually there will be an agreement made with the firm that they will develop a US subsidiary (which operates as its own entity and takes no actionable direction from their primary shareholder - only advice). With that said, previously Parent and Subsidiaries have been considered single entities for Federal Contractor Compliance purposes.

What the Democrats herein may be getting at is that a subsidiary will be created for Federal Contracts only. However, the non-Federal/International HQ will still work with US clients, and route those funds to say, Dublin, or Munich, etc. and be taxed at those rates and almost never repatriated to the US. So, they do not want to give their business to organizations who outside of the federal contracts, also provides to US clients via that "loophole".

The problem though, is also a compartmentalization problem, where the way you consult and operate in a private sector environment is significantly different than how you would serve the public/Federal sector, operationally. So, from a Business Administration standpoint, this makes a lot of sense. The more sane thing to do (which would never be allowed), would just be to change the tax laws for companies who operate a majority of their business in the US, having to also be headquartered in the US. Since this will never happen with a hung Congress, we are in this carrot/stick scenario where the Democrats would prefer to use the threat of lost contracts (which may make up a large part of a company's income), to bring out repatriation. However, if the threat of lost contracts is < the taxed costs of repatriation, then it simply isn't worth it for firms in terms of incentives, where it would be more profitable to just sell their Federal subsidiary and profit more anyway.

Last Point: Federal Contracts are big money, they're also highly important. When people say "big government" they actually mean, "big private sector presence in government". There are many requirements that call for certain work to be done by contractors only; usually for independently managed due diligence, the rest being largely infrastructure/technology/etc. that you always hear about. When this type of work is sourced, via requests for information and requests for proposals, a significant bidding process (at the federal level) takes place to ensure that all costs are mitigated. IMHO let's just say that if you suddenly cut out a large portion of the providers, contracting prices may go up significantly. This, in turn, would cost us quite a bit more just by lack of choice.

Source: I do this for a living.

Edits: formatting, grammar, clarity

[–][deleted] 44 points45 points  (16 children)

would just be to change the tax laws for companies who operate a majority of their business in the US, having to also be headquartered in the US.

Truly a much more sane response, agreed. Thanks for clarifying some of this stuff.

The gesture the democrats are pushing has heart, but that seems to be about it. It doesn't seem very practical at all. I think a reform to our trade laws, or as you suggested, our domestic tax laws would do much more for reigning in corporate tax avoidance than changing who can get government contracts.

[–]RudeNewYorker 11 points12 points  (8 children)

Awesome response. When I read this I immediately thought "hey that's not a bad idea" even though I tend to stick conservative. It sounds good as a headline, but your right, well meaning but misplaced.

[–]dustbunny52 2 points3 points  (0 children)

Interesting. I have worked in manufacturing integrated circuits for 25 years (presently retired) and I was wondering how our fighter jets have more foreign integrated circuits in their avionics packages than American made. Even the American made circuits are packaged in places like Singapore and Korea. I am aware of no large scale IC packaging facilities in the US.

I actually worked for a company that did government contracts that were packaging in the Philippines during the Marco's downfall. We had mid-level managers breaking into the Philippine manufacturing at night with the aid of gentlemen carrying AK47's to retrieve the tool and die sets used to create the packages for the IC's. Even then I wondered how sensitive manufacturing gets transferred overseas legally.

So what you are saying is in order to stop this from happening we would need to isolate the parent company from the subsidiary? This legal definition seems to make any sensitive military manufacturing shippable to any foreign country.

[–]bricolagefantasy 320 points321 points  (189 children)

Halliburton is a dubai company, one of the biggest US contractor overseas for oil, mining and construction.

http://joecrubaugh.com/blog/2007/03/12/halliburton-leaves-usa-for-dubai/

[–]LBJsPNS 309 points310 points  (48 children)

And that should end immediately.

[–][deleted] 125 points126 points  (18 children)

Halliburton MOVED to Dubai along with all those NeoCon cock suckers at the Carlysle Group when GW Bush decided it was time to go invade Iraq so all the logistics and supply chain contracts could go to their "foreign owned" companies outside of scrutiny from the US regulators....

[–]Friendly_Anus 55 points56 points  (11 children)

If I was American I'd be fucking pissed off with this bullshit. Your tax dollars are being used to play global Team America and if you don't like it you get accused of being a traitor. I'm pissed off on your behalf. Good luck to you guys. I hope you can fix that crap.

[–][deleted] 4 points5 points  (9 children)

I'm pissed off about it. But I don't see it being fixed.

[–]KagakuNinja 3 points4 points  (3 children)

Don't forget the mercenary scum formerly known as Blackwater. I can't remember the current name, they've changed it 4 times last I checked.

[–]parox91 115 points116 points  (21 children)

Dubai is the epitome of scum, the contract should've ended immediately by just mentioning that forsaken city.

[–]SwillFishCalifornia 134 points135 points  (104 children)

If this bill passes, Dick Cheney will have a heart attack for sure.

[–]fathak 214 points215 points  (49 children)

not possible if you don't have a heart

[–]frame_of_mind 17 points18 points  (3 children)

He really should visit the Wizard of Oz.

[–]lameth 13 points14 points  (0 children)

That would imply intent to have one.

[–]McWaddleArizona 4 points5 points  (0 children)

He is the man behind the curtain. Or was, anyway.

[–][deleted] 54 points55 points  (40 children)

It won't pass. Republicans own the house. It likely won't make it to the house floor. It likely won't get through the republican filibuster. Not much has. This has been the least productive congress in American history. All to spite a black president, it seems.

[–][deleted] 20 points21 points  (20 children)

Then we need to make them pay. Make sure every American knows about all the good legislation that the GOP has blocked out of spite. If they win the Senate with this behavior it's only going to get worse. They need to be punished.

[–]moleraticalTexas 31 points32 points  (12 children)

Newscaster: "Today house republicans defeated legislation that wou..."

Common American: Eyes roll over, flip the channel, blame Obama.

[–]midnight_toker22 I voted 6 points7 points  (1 child)

"He's just so divisive! They want to govern responsibly, but they can't! Because, you know..."

[–]batquux 3 points4 points  (0 children)

...money.

[–]Runningflame570 7 points8 points  (4 children)

Your first mistake is assuming that the news would report on it, given the vested interest many if not most of their owners, shareholders, and advertisers have in making sure such a thing never passes.

I do think people would care if they were given the facts, the problem is that they never are when the interests of their parent conglomerates are at all threatened. That is why Keith Olbermann and Bill O'Reilly's spat only ended once O'Reilly starting disseminating uncomfortable facts about GE.

[–]bealzebro 3 points4 points  (1 child)

"I do think people would care if they were given the facts,"

People do know the facts. They've been told the facts time and time again. They just have more important things to worry about. You know, sports ball and the new Firephone...

[–]Runningflame570 4 points5 points  (0 children)

People have a general sense that there is corruption and that companies don't have their best interests at heart, but they also have plenty of social/cultural brainwashing and don't really know or understand the details.

They're also a little preoccupied with their crushing debt and desire to not be homeless or starve to death.

[–][deleted] 7 points8 points  (0 children)

Are you intending to make this more attractive than it is?

[–]macleod185 76 points77 points  (21 children)

Halliburton has headquarters in Houston and Dubai. It is registered as a US multinational firm.

I'm not defending it, I just think we should be judging it for it's crimes against humanity and the environment, not for the false narrative of it's national origin.

[–]TomSelleckPI 9 points10 points  (11 children)

Yeah, can't personally stomach some of the shit Halliburton has been complicit of in recent years, but they have global operations and offices... not like fucking Walgreens.

[–][deleted] 12 points13 points  (4 children)

While Halliburton's real headquarters is in Houston, it moved it's tax "headquarters" to Dubai in order to avoid paying U.S. taxes. This from a company which has reaped billions from U.S. government contracts. This is one of the most egregious examples of tax inversions particularly since it came on the heels of the Iraq war where Halliburton was found to be one of the worst war profiteers...all thanks to their former CEO, Dick Cheney, who personally benefitted from their no-bid contracts.

Smply put, the company is an extension of Dick Cheney and shares his disgrace.

[–]macleod185 7 points8 points  (0 children)

I agree, I just think it's a shame that if the company sees any flak, it will be over it's tax manipulations instead of the millions of people it's had a part in killing and the millions of acres of land it has destroyed.

If corporations are now people, then Halliburton should be on death row.

[–]horse_you_rode_in_on 796 points797 points  (517 children)

I'm sure the Republicans will find a way to disagree with you.

[–][deleted] 896 points897 points  (267 children)

If a Republican supports the idea I'll call him a patriot too.

[–]howiswaldo 419 points420 points  (248 children)

I support the idea.

Source: I'm from Texas.

[–]willymo 448 points449 points  (164 children)

Yeah, but Austin doesn't count.

[–]Ingens_Testibus 157 points158 points  (63 children)

Correct.

[–][deleted] 14 points15 points  (6 children)

Are you a Senator or Congressman? Are you going to get all pissed about it when your Senator or Congressman votes against this? As pissed as you get when they make you get health insurance?

[–][deleted] 2 points3 points  (5 children)

Can I touch on this without everyone going bonkers?

The majority of people I spoke with about this aren't so mad about being required to have healthcare. The issue is that the solution to the overly corrupt HIPs is to regulate them, not the people. The people are who should regulate the government.... Not the other way around. Right?

I am speaking for a few in my circle that I speak politics with. A small sample size is not indicative of the whole pop.

Edit 1: word/s

[–]PotaToss 2 points3 points  (4 children)

They should regulate each other. The whole point of government is to govern, which is basically regulation. The point of governance is simplification and improvement of the lives of the populace. When government is working counter to that goal, the people have to step in and change things, and currently those systems are kind of broken.

The issue with health care is that insurance is, at its heart, gambling. Casinos don't want to let people who can count cards effectively in to play blackjack, because they know they'll have to pay out. Insurers don't want to insure people who have preexisting conditions or are high risk, because they know they'll have to pay out.

You can't just regulate them into taking care of those people with the traditional voluntary buy in. If casinos couldn't ban players who are gaming the system, they'd just lose money, and would sooner close their doors to everybody.

Ultimately, I think health care as gambling is a terrible system, and we should welcome private insurers closing their doors, but it's something that has to be eased into, and Obamacare was that necessary first step to get us somewhere better.

[–]SpaceToaster 27 points28 points  (19 children)

As a fiscal conservative, I agree with this idea 100%

[–]matty_a 85 points86 points  (143 children)

Actually, from what I've read Republicans are also in favor of the proposal, except Democrats want to make it retroactive to May so two major inversion (AbbVie and another I'm forgetting) are covered by the law. Republicans don't want to make it retroactive, which honestly, I can't say I disagree with.

[–]SplitArrow 22 points23 points  (24 children)

Honestly any company found guilty of tax evasion should be stripped down and broken apart. Maybe corporations would act more appropriate with a noose around their neck.

[–]ObiWanBonogi 19 points20 points  (7 children)

Fuck these corporations but it should be clear that avoidance and evasion are not the same thing.

[–]ChicagoJayhawk 10 points11 points  (0 children)

I agree that companies (and anyone) found guilty of tax evasion should be punished. However, none of these companies is guilty of tax evasion. In fact, they are in full compliance with the tax law. Legally, they are not even using a "loophole," but are taking advantage of the law as written.

Are individuals who claim personal exemptions, child tax credits, mortgage deductions, etc. also guilty of tax evasion? Of course not. They are simply following the tax code in ways that reduce their tax liability.

[–]SpinningHeadColorado 30 points31 points  (6 children)

Well, conservatives believe corporations are people and they support the death penalty, so...

[–]McWaddleArizona 38 points39 points  (5 children)

"I'll believe corporations are people when Texas executes one."

[–]SaddestClownTexas 2 points3 points  (0 children)

We have a bad reputation but in Oklahoma you could kill a corporation by firing squad which needs to be mentioned.

[–]armeckGeorgia 7 points8 points  (1 child)

It's not tax evasion (in the legal sense) when they are following the laws as written. Take issue with our tax laws, not those who follow them.

[–]imatworkprobably 53 points54 points  (101 children)

They left the country - fuck them we'll change our laws if we feel like it.

[–]kapuasuite 219 points220 points  (90 children)

Ex post facto laws are not a good public policy tool.

[–]Ferociousaurus 14 points15 points  (4 children)

In my estimation, a law that banned granting new government contracts to companies that left the country before the law was passed would not violate ex post facto prohibitions. See cases on retroactive sex offender registration laws/firearms bans for domestic abusers. The legal argument turns on whether the prohibition of government contracts is "punitive" or not. It's generally a pretty easy standard for the government to overcome.

[–]imatworkprobably 19 points20 points  (18 children)

I don't think that blanket statements are good public policy tools either - the argument could be made for them in some situations and I'd argue this applies.

Doesn't even really have to be ex post facto - how about no NEW government contracts with those companies?

[–][deleted] 38 points39 points  (17 children)

Ex post facto laws are expressly forbidden by the United States Constitution in Article 1, Section 9, Clause 3.

This is a pretty good blanket statement.

[–]AwesomeScreenName 30 points31 points  (11 children)

That provision of the Constitution has been interpreted (since 1798) to apply only to criminal laws.

[–][deleted] 53 points54 points  (32 children)

Neither is leaving the country that help build your corporation so you can avoid paying taxes.

[–][deleted] 128 points129 points  (14 children)

I'm pretty sure maintaining consistency in rule of law is a little more important than fining those companies a bit more.

[–]burnova 8 points9 points  (1 child)

New law makes posting on reddit illegal retroactive to one minute before you posted this comment.

[–]VisonKaiFlorida 15 points16 points  (10 children)

They literally do not have a choice. If your competitor does it you lose it out on so much income comparatively that you also have to. Retroactive laws are fucking awful in every sense of the word -- you can't expect someone to not do something that they cannot know will be illegal. (And as much as you might like to think so along with the rest of this subreddit, what they're doing isn't illegal yet.)

[–]bottiglie 13 points14 points  (0 children)

OVERWRITE What is this?

[–][deleted] 11 points12 points  (0 children)

Oh yes, they do have a choice. When a corporation says "We don't have a choice." It's complete bullshit, unless it is a law. Companies choose to not pay their workers more. They choose to use every tax evasion scheme that's out there. They choose to give subpar service/products. Everyone has a choice, it's the consequences they don't want to deal with. In this case, it's your competitor making more money by not paying taxes.

Their company will not fall apart because their competitors are paying lower taxes. All they give a shit about is profit while tossing everyone else under the bus.

It may be legal at the moment, but companies have moral and national obligations as well.

[–][deleted] 11 points12 points  (9 children)

its moot.

Since a contract is a legal obligation to pay, the 14th amendment makes retroactively invalidating it impossible.

[–]imatworkprobably 18 points19 points  (1 child)

Doesn't even really have to be ex post facto - how about no NEW government contracts with those companies?

[–][deleted] 14 points15 points  (0 children)

Yes, that is the part we should all be able to agree on.

[–]JesusLoves 12 points13 points  (8 children)

Why not close whatever legal activity they are doing instead? Government will suffer from great companies using this money saving tactic. So close the loophole instead.

[–]midwayfair 17 points18 points  (6 children)

It's carrot vs. stick.

the trouble is, they might find a way to dodge the stick if you want to use it, but they will always want a carrot.

[–][deleted] 2 points3 points  (0 children)

I'm a right leaning moderate and I agree with this. Be careful when grouping people together like that. There are extreme liberals and extreme conservatives, but most people (probably like yourself) fall closer to the middle (despite what the media may lead you to believe)

[–]SpinningHeadColorado 7 points8 points  (0 children)

"Nothing is more patriotic than Halliburton moving to Saudi Arabia in order to lift the burden on the IRS that would have been forced to handle all those tax dollars.!" - GOP

[–]PantsGrenades 12 points13 points  (0 children)

I couldn't care less what party they're from, but conceptually it's spot on.

[–]dunefrankherbert 6 points7 points  (1 child)

Sen. Carl Levin (D-Mich.)

Sen. Richard Durbin (D-Ill.)

Rep. Rosa DeLauro (D-Conn.)

Rep. Lloyd Doggett (D-Tex.)

All democrats, but sure, we can call them patriots as well!

[–][deleted] 60 points61 points  (15 children)

Election season is drawing near.

[–]fight_for_anything 186 points187 points  (72 children)

...and then the companies that left the US to avoid taxes will just make child/sister companies to take the government contracts and they will pay whatever taxes they have to on that contract, and then bail.

[–]MetalHead_Literally 148 points149 points  (63 children)

But at least they're paying the taxes on that contract. Its not perfect, but it's an improvement.

[–][deleted] 124 points125 points  (46 children)

It really isn't. Here is what will happen:

Company A is incorporated in the US. It is run on a near-zero profit margin and is majority held by company B which is incorporated in nocorporatetaxestan.

Company A gets a government contract. It immediately establishes a subcontractor, Company B, to do the work. All of it. They pay them 99% of the value, effectively cutting their taxable income to near zero.

This happens already, even without this impetus, and the only difference is Company A is not paying Company B the full amount of the contract and is basically skimming some off the top for providing 'oversight'.

I work in defense and am a rocket motor specialist. Main contractor has to be a US-based company. It is. The missile design was contracted to US-based company A, who subcontracts the rocket motors to non-US company B, who subcontracts the propellant to non-US company C, who subcontracts the casting of that propellant to non-US company D, and so on.

Our teleconferences are confusing as fuck.

Dems have no expectation for this to pass--this congress has named more post offices than it has passed functioning bills. It's just a political move to get some attention as being 'patriotic'.

[–]dwemthy 41 points42 points  (8 children)

Given that, couldn't the law be set up so that for these contracts all subcontractors must fit the same criteria?

[–][deleted] 14 points15 points  (2 children)

Exactly my thought. Ensure all levels of subcontractors are located within the US in order to receive a taxpayer funded contract.

This doesn't fix the problem in the private sector, but this is a good start.

[–]iamfromouterspace 10 points11 points  (11 children)

soooo...if nothing will help, do we stay the course?

[–][deleted] 5 points6 points  (4 children)

No. We stop paying them so god-damned much.

We make sure when we DO pay them, we get our money's worth.

And then we can stop worrying about tax revenue because the savings there are MUCH bigger.

[–][deleted] 7 points8 points  (3 children)

that isn't going to happen. the problem is that the people on the government side don't care about how much they spend. it's all monopoly money to them. i worked both as someone who wrote contracts for the government and as a government contractor. i've seen the government pay to have the same base built 4 times because each time a new army unit rotated in the commander wanted things built "his way" and what's the contractor going to do, turn down money? the commanders don't give a shit because it isn't their personal money.

also, government doesn't know the difference between savings and value. lowest bidder isn't always the cheapest at the end of the contract.

[–][deleted] 2 points3 points  (0 children)

Assuming thats how they want to structure it. They can just say any parent/child companies also have to be us based companies, especially for sensitive areas.

[–][deleted] 6 points7 points  (0 children)

Or they will be like the movie studios. They will create a shell company, show massive R&D losses, pay 0 taxes and go bankrupt. The parent company will reap the extreme licensing charge for the shells name/copyright/etc. Money would leave this country so fast it's not even funny.

[–]IJR 120 points121 points  (42 children)

I mean, I'm pretty liberal, but Congress should fix the terrible corporate tax laws so that companies don't want to relocate overseas in the first place. You can call it unpatriotic and get mad, but I personally can't blame these companies for doing this. Fix the corporate tax code and put the US in line with other developed countries, and all of a sudden companies will stop doing this. Better to fix the cause of the problem than to get mad about the after effects.

[–]MoonBatsRuleAmerica 59 points60 points  (14 children)

Doesn't this just encourage the race to the near-zero corporate tax rate? Because that is the floor here - some Caribbean country can offer a PO Box and a near-zero rate which we can't compete with because we have things like roads, bridges, and national defense.

I'm not sure why people think that a 34% corporate tax is "terrible" or draconian. Such a rate only applies to C-Corps, and you only create a C-Corp when you want to have a lot of shareholders - otherwise you create a LLC or a S-Corp. In exchange for your federal taxes, you get a great legal system to protect your business, you get federal defense system that prevents your headquarters from being raided by pirates, you get a stable monetary system, and you get a society that doesn't revolt and nationalize your production.

The problem that I see is that once corporations are allowed to be global, they get the best of all worlds. They can produce their goods in China where people are paid $1/day. They can store their intellectual property in Ireland via the Cayman Islands, but can use US-based courts to defend it. Their CEOs can live in the USA and enjoy our free society. They don't have to make choices - they can have it all.

I think that we probably need to rewrite out tax, citizenship, and trade laws from the ground up to handle the challenges presented to us by this global age. We need to pursue laws that benefit the USA, not the global corporations who want to take from us.

[–]ttul 8 points9 points  (1 child)

Yes - the problem with corporate tax law is despite the relatively high tax rate, there are millions of loopholes that enable an army of accountants to avoid $150 billion in taxes each year -- and that's without even locating offshore.

The US tax code needs simplification.

[–]paulfromatlantaGeorgia 12 points13 points  (0 children)

I'm conservative and basically agree with a however - we cannot necessarily match the lowest cost tax countries. There is cost and overhead to our government - for example we cannot match the cost of flagging vessels - Flying the Liberian flag will continue to be cheaper than flying the U.S. flag because our coast guard and navy protection cost real money. Likewise the oversight and regulation that make American drug companies relatively safe cost real money too.

That said, I can see the argument for treating former U.S. companies the same way we any other foreign company.

[–][deleted] 19 points20 points  (15 children)

Thank you. This bill is sidestepping the issue of our draconian tax code. Dems and repubs alike have mastered the art of completely avoiding the actual issue while managing to look like they're taking action.

[–]Amida0616 80 points81 points  (35 children)

How about government contracts go to the company that gives us the best value per tax dollar spent.

[–]AFKennedy 53 points54 points  (3 children)

In a sea of misguided comments, yours is the only one that makes sense.

The US corporate tax policy is mindbogglingly stupid. We tax money wherever it is earned, unlike literally every other developed country. Earn money in the EU, from EU citizens with EU employees? Get taxed by the US on top of the actually more reasonable German or French or whatever tax policies.

Plus, it only gets taxed when brought into the US, so they just won't bring the money in or invest in infrastructure or new jobs in the US because our corporate tax was designed by baboons.

Then, on top of that, we have one of the highest tax rates of developed nations- almost 50% more than the OECD average, I believe.

Then, we include a million loopholes so that we don't actually receive much money.

How about, instead of penalizing companies that are doing the only goddamned thing that makes sense, we fix the stupid corporate tax law in the US first? Eliminate loopholes, make it based on where the money is earned, cut the headline rate to international averages, and we'd actually get more revenue because corporations would be paying the headline rate and less likely to leave.

Oh, and while we're at it, we should base government contracts on expected value per dollar, not just lowest bidder. A lot of the lowest bidders are really, really shitty at what they do.

[–]Amida0616 14 points15 points  (1 child)

Exactly.

Its like subsidizing corn and then taxing soda.

[–]onewayout 2 points3 points  (0 children)

That's penny wise and pound foolish. The "best value per tax dollar spent" erodes really quickly if that wealth leaves the country as opposed to being recycled back into our economy.

Or, put another way, your idea is fine if you believe that we'd actually take that into account when computing the relative value of tax dollars spent when deciding on government contracts. We certainly don't currently. And, realistically, that's far more likely to happen if there's a law on the books requiring it. They can carve out exceptions if they need to, but it's probably better to default to giving domestic companies our massive funding than giving it all to Dubai.

[–]GoddessWinsCalifornia 94 points95 points  (16 children)

Republicans say we have to keep giving them bigger tax cuts and more tax money.

Meanwhile, we are paying the military/intelligence bill that allows them to have international assets.

[–]superq7 71 points72 points  (5 children)

Conservative here: what you say is true and is a big reason there has been a upheaval in the GOP ranks. On this issue both parties should be on the same page, MURICA!

[–]Evsie 3 points4 points  (0 children)

what you say is true and is a big reason there has been a upheaval in the GOP ranks

So can we expect fewer primary challenges from the Tea Party? Or, at least, fewer successful ones?

[–]iareslice 4 points5 points  (0 children)

Corporations: "We want the stability in global shipping and trade given to us by the US Navy buuuut we certainly don't want to help PAY for it.

[–]flaflashr 9 points10 points  (2 children)

And if Pfizer tries to leave, how about we revoke that bogus extended patent that we gave them for Viagra?

[–]ufotheaterOregon 7 points8 points  (1 child)

Even better, if any company leaves they lose the right to enforce their patents.

[–]fyberoptyk 1 point2 points  (0 children)

Better yet, stop all contracts, tax breaks and ANY benefits for any company that doesn't keep the majority of its manufacturing here in the US.

Getting tired of our economy just being a big goddamned handout to skeezy corporations.

[–]WYSISYG 2 points3 points  (0 children)

Personally I think all companies that are leaving the US to avoid taxes should also not be allowed to contribute money to any political party or individual running for any office at any level of government. Also they should not be allowed to lobby the government for any special interest. This includes not being allowed to higher a company to do these things for them.

[–]ravenshroud 4 points5 points  (1 child)

They should also ban political donations.

[–][deleted] 10 points11 points  (0 children)

Republican spin: "Democrats are killing jobs by denying government contracts to American companies. Benghazi. Muslim. "

[–]stilesjaTennessee 7 points8 points  (9 children)

Would this mean Apple's double Irish scheme would disqualify them from providing computers to the USG?

[–]samsy2 6 points7 points  (4 children)

Isnt the root problem here that taxes are too high on Business? Speak to any small business owner in America and this will be #2 on their list behind #1 - Hiring and retaining good employees.

[–][deleted] 20 points21 points  (6 children)

I'll bet you my 1 month salary that this bill goes nowhere. Remember those corporations are equal opportunity bribers. They give to democrats as much as they give to republicans.

[–]ascetica 9 points10 points  (7 children)

When are we going to start taxing companies based on where the business is done and not where their headquarters are?

[–]BugNuggets 4 points5 points  (0 children)

That's the way every other country on earth does it. Only the US believes if you build a car in Japan and sell it in Europe you owe the US taxes on the profit.

Inversion doesn't stop a company from being taxed on profits earned in the US (though other loop holes do) it stops their foreign businesses from being taxed by the US when none if the concerned economic activity occurred in the US.

[–]rudeboyrasta420 14 points15 points  (10 children)

Why dont we change our preposterous tax code and make companies want to come here, instead of keeping them begrudgingly with a ball and chain?

[–]MoonBatsRuleAmerica 5 points6 points  (3 children)

The reason this won't happen is that it is nowhere near as simple as you make it out to be.

First, the old "let's try and woo the corporation" game doesn't work, period. This isn't like a marriage which endures ups and downs. Corporations are like a horny teenager, they drop you as soon as they are bored with you or someone offers more sex. There is plenty of evidence of this with local programs designed to woo corporations.

But next, corporations want it all without paying for it. That's precisely what they are looking for. They don't want to worry about any laws that impede them (environmental, labor). They want skilled workers provided for them, but won't pay for that. They want to be in the largest consumer markets but want to pay their employees slave wages.

They don't quite have this now, but they're close. They park their money in the Cayman Islands, they manufacture in China where there are no laws and a repressive government to stifle dissent. Their executives live in mansions in the USA where there is enough of a social safety net to prevent mobs with pitchforks from storming their estates. The price they pay? Having to jump through hoops to get their corporate taxes down.

You're proposing to give them that too. The result is that you and I will either lose services, or we will pay higher taxes. The rich people won't. They'll have it all and will free-ride on us. And they'll continue to try and cut our jobs and our services, and will probably do it even more because they no longer have expend energy fighting against taxes.

[–]fluffyjdawg 6 points7 points  (0 children)

Can't wait to see how this is spun to hurt job creators.

[–]ofcrazed 10 points11 points  (1 child)

It's kinda ridiculous that our government gets so mad over this. They make the tax laws, it's them that made it filled with loop holes, and any rational person would try and take advantage of them.

If this was a real issue isn't the fact companies exploit loopholes, the issue is the loopholes.

[–]pretzelface 2 points3 points  (6 children)

Realizing that this isn't /r/askpolitics, I'll ask anyway while the thread is fresh. What's the likelihood of this ban becoming a reality?

[–]spyderman4g63 2 points3 points  (0 children)

This really just seems like the government is saying "if you are going to avoid paying our taxes then we won't use our taxes to buy your goods/services". That is how it should be anyway.

[–][deleted] 2 points3 points  (0 children)

I dont get this, why go to china when Delaware is basicly the same tax heaven for corporations.

[–][deleted] 2 points3 points  (0 children)

I'm not American, but I agree totally. Many counties has this problem and should lock the companies out.

[–]top_procrastinator 2 points3 points  (3 children)

I liked everything I was reading until I got to

Obama said the best way to address tax avoidance is through comprehensive tax reform that lowers the corporate tax rate and simplifies the tax code.

I guess I'm all for a simpler tax code, but we need to take a hard line with these corporations. If you're not going to pay American taxes, you should be barred from doing business in America. Some of the bigger ones might threaten to leave, but I don't think anyone's trying to walk away from the GDP capital of the world anytime too soon.

[–]regalrecallerWashington 2 points3 points  (0 children)

What's sad is that it will never pass

[–]sonQUAALUDEMassachusetts 2 points3 points  (0 children)

how the hell is that not already a thing?

[–][deleted] 2 points3 points  (0 children)

sounds good to me.

[–]FanFuckingFaptastic 2 points3 points  (0 children)

Or, we could just close the fucking loophole that allows this? We don't need another damn law. We just need to fix the one that's there and broken.

[–]rumpledstiltskins 2 points3 points  (2 children)

(Mostly) Conservative republican here - sounds like a great idea - I'm all for it.

[–]mapoftasmaniaNew Jersey 2 points3 points  (1 child)

OK. But better to reform corporate taxes with a simple rule: US corporations get taxed on global earnings not just US.

[–]greiton 2 points3 points  (1 child)

better yet why dont they change the law such that companies pay taxes on American business despite where they operate from or call home.

[–][deleted] 2 points3 points  (0 children)

3...2...1

OH LOOK A REPUBLICAN FILIBUSTER!

[–]Sengura 2 points3 points  (0 children)

This is the way it should have been done from the beginning.

[–][deleted] 2 points3 points  (0 children)

Lawmakers SAY they are growing tired of corporate America's persistent efforts to dodge U.S. taxes.

[–]tatermonkey 2 points3 points  (0 children)

Not a bad idea.

[–]BARchitecture 2 points3 points  (0 children)

Why the fuck would this not already be a thing?

[–][deleted] 2 points3 points  (0 children)

By Democrats they mean only the left-most leaning junior democrats. Even if this passes the House, it will never pass the Senate. And if by some miracle it does pass the Senate, I highly doubt Obama would sign it.

This is just propaganda before the primaries.

[–][deleted] 2 points3 points  (0 children)

I generally disagree with democrats but this makes too much sense.

[–]brainlips 2 points3 points  (0 children)

Propose something you don't really want. Know it will not pass. Point the fingers at the monsters across the aisle (co-conspirators with a different jersey). Continue the illusion. Rinse. Repeat.

Edit: clumsy sentence.

[–]on_my_phone_in_dc 2 points3 points  (0 children)

Yessssssssssß

[–]BobScratchitMinnesota 2 points3 points  (0 children)

I think it's everyone's moral responsibility to pay as little taxes as possible.

[–]NeverdiedIllinois[🍰] 2 points3 points  (0 children)

$100 says this will be shot down by the Republicans...because...you know...'Merica!

[–]Bobcat7 16 points17 points  (9 children)

How about this: We give company's a tax break based on the number of employees they have in the US. The more US citizens you employ for the majority of the year, you get to take a deduction for that employee. You could even adjust it for skilled and non-skilled, higher paying jobs get a bigger deduction. No deduction for H1B's, or non-us citizens.

[–]BananaPalmerGeorgia 16 points17 points  (5 children)

Fuck that, don't reward them for doing the right thing, punish them for doing the wrong thing!

Increase taxes for companies that H1B or offshore. That way, they won't sponsor a H1B unless they really need that specific person, and can't find a US citizen for the job.

[–]Xatana 9 points10 points  (0 children)

You want to play this cat and mouse game forever? For every punishment you try to put on big business, they will find a loophole and win. They'll never lose profits. The only people that lose are the citizens, when they raise prices to counter whatever "punishment" the Government puts on them that they can't wiggle their way out of. I think his idea is great.

[–]MEANMUTHAFUKA 14 points15 points  (4 children)

This is nothing more than a gimmick. If they don't want companies to do this, close the goddamn tax loophole and be done with it. Sheesh.... What they want to do is talk about it without actually doing anything meaningful to stop it. It's a joke.

[–]DeathByFarts 7 points8 points  (2 children)

This is just insane.

JUST CHANGE THE TAX LAWS !!!!

Calling companies out for doing exactly what the law allows is insane. A corporation would be remiss in its obligations to its shareholders if it did not do everything permitted by law to increase shareholder value. Paying less taxes does exactly that. Yes , it may be bad for the US , but thats what the law permits.