America Panders to The Plutocrats: Apple, Google, Microsoft Avoid Taxes By Keeping Billions In Profits Offshore

America Panders to The Plutocrats: Apple, Google, Microsoft Avoid Taxes By Keeping Billions In Profits Offshore

The Microsoft logo. Microsoft and other companies have been accused of using complicated schemes to avoid paying taxes.

American multinational corporations have something in common with Republican presidential nominee Mitt Romney, aside from being people, too: They both keep a lot of their income overseas to cut their tax bills.

Companies such as Microsoft and Apple quietly dodge billions of dollars in taxes each year with potentially illegal schemes to move their profits offshore, according to a Senate subcommittee report released on Thursday.

"Some multinationals use our current tax system to engage in gimmicks to avoid paying taxes they owe," Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee On Investigations, said in a hearing on Thursday. Levin described "a system used to shift billions of dollars of profit offshore and avoid billions in taxes."

Microsoft, Apple, Google and Hewlett-Packard were among the companies Levin singled out for criticism over their tax-avoidance practices, but they are not alone. Most multinational companies pay a tax rate well below the 35 percent rate mandated by law. Some avoid paying taxes altogether, or even get the government to pay them money. These loopholes cost the U.S. government billions of dollars in revenue that could be used to help close the budget deficit.

Using complex schemes to shift U.S. revenue overseas, Microsoft was able to avoid paying taxes on $21 billion in revenue between 2009 and 2011, amounting to about half its total U.S. sales, according to the subcommittee report. The company avoided paying $4.5 billion in taxes, or about $4 million per day, during that time, according to the report.

Using similar schemes, Levin said, Apple avoided taxes on $34.5 billion between 2009 and 2011, and Google has dodged taxes on $24 billion.

Hewlett-Packard, meanwhile, used a series of constantly revolving short-term loans between itself and its subsidiaries that have helped it avoid paying billions of dollars in taxes since at least 2008, according to Levin. Though he didn't say how much money H-P has avoided paying, Levin did say that H-P has kept billions of dollars in cash offshore -- more than $17 billion in 2010, for example -- that it would then "lend" to its U.S. parent company in a steady stream.

"HP has complied fully with all applicable provisions of the U.S. Internal Revenue Code and auditor Ernst & Young has consistently reviewed and approved the accuracy of HP’s financials," Hewlett-Packard responded in a statement emailed to the Huffington Post. "HP has always had an extremely productive and professional relationship with the IRS, who has permanent offices at two of our facilities and has been continually auditing HP since the filing of our 1962 tax return. They have never raised any concerns about these programs. We are disappointed to see what appears to be a politically motivated attack on one of America’s largest employers.”

Apple and Google did not immediately return requests for comment. A Microsoft representative was scheduled to address the subcommittee later on Thursday.

"In conducting our business at home and abroad, we abide by U.S. and foreign tax laws," Microsoft said in a statement emailed to the Huffington Post. "That is not to say that the rules cannot be improved -- to the contrary, we believe they can and should be. U.S. international tax rules are outdated and not competitive with the tax systems of our major trading partners."

The ranking Republican on the subcommittee, Tom Coburn (R-Okla.), defended the companies, saying they were following the letter of the law to avoid what he called onerous tax rates and an overly complex tax code.

"This is perfectly legal tax avoidance," Coburn said, arguing that the 35 percent corporate tax rate mandated by law is twice that of the average rate around the world. "They take advantage of every loophole we have created in the tax system. There is nothing heinous in that. Nothing illegal in that."

Levin responded that he wasn't sure, but it seemed "highly dubious" that Hewlett-Packard's revolving loan program, for example, "complies with current tax law." He also blamed the IRS for lax enforcement of that law.

Just because something is legal does not mean it is ethical. All of these companies depend on U.S. infrastructure and the U.S. military to create a safe and economically advanced country that makes it possible for these companies to even exist.

Freaky conservative columnist Charles Krauthammer has accused Amb. Susan Rice of totally unfounded misdeeds, FLASHBACK: When Krauthammer Excused Condi Rice For Pushing "Defective" Iraq War Intelligence

The Republican Speaker of the House is clueless, John Boehner(R-OH): No ‘Difference’ If Revenue Comes From Middle Class Or Super Rich

In An Internet Littered With Misinformation About The GM and Chrysler Bailouts Some Useful Links

In An Internet Littered With Misinformation About The GM and Chrysler Bailouts Some Useful Links

The restructuring of the bankrupt General Motors Corp. and Chrysler LLC in 2009 through the creation of new companies formed with assets purchased from the bankrupt firms was highly successful. Today, they are profitable, investing in America and creating jobs.

The decision to save GM and Chrysler prevented an economic catastrophe that would have thrown the nation into a full-blown depression, resulting in dozens of additional bankruptcies in the auto industry and across industrial America. Instead, today the auto industry is helping lead our nation's economic recovery.

When people insist that GM and Chrysler should have been restructured with private funds, we must remember that no entity besides the U.S. Treasury would provide financing. Without the Treasury, "Let Detroit Go Bankrupt" would have become "Force Detroit to Liquidate."

U.S. Bankruptcy Judge Arthur J. Gonzales found exactly that when authorizing the sale of Chrysler LLC's assets to the new Chrysler: "The Sale Transaction is the only alternative to liquidation available to the Debtors."

Likewise, the claim that Chrysler's secured creditors got less than they were entitled to is laid to rest by the judge in the Sale Order: "The Sale Transaction will provide a greater recovery for the Debtors' creditors than would be provided by any other practical available alternative, including, without limitation, liquidation whether under Chapter 11 or Chapter 7 of the Bankruptcy Code."

The Chrysler creditors group agreed, with over 90 percent supporting the sale as ordered, while the U.S. Appeals Court and the Supreme Court rejected challenges to the Sale Order.

That hasn't stopped critics like the Heritage Foundation from repeating the rejected claim that the UAW retiree health care trusts received more than they were entitled to under the principles of bankruptcy when compared to unsecured creditors.

But the comparison is hardly apt. The creditors' recovery is still occurring as a part of the bankruptcy process, while the health care funding was approved by the court under the specific part of the bankruptcy code that deals with retirees.

GM and Chrysler prudently bargained new contracts with the employees (and suppliers) they needed to be successful as newly formed entities. That amounts to good business judgment that is difficult to second guess when both companies are performing better than they have in decades.

Critics also like to forget the significant sacrifices made by UAW members. Plants were closed, and tens of thousands lost their jobs. Experienced workers gave up raises, cost-of-living increases, bonuses, vacation pay, overtime pay, holidays and break time, while those hired since 2007 work for lower pay and benefits. Retiree health care liabilities were shifted to the retiree trusts; retirees lost vision and dental coverage, and face increased out-of-pocket costs.

In 2011 UAW members approved new collective bargaining agreements with the domestic automakers that contain no raises but the possibility of increased at-risk compensation through profit sharing.

In return, the companies are investing in U.S facilities to create at least 20,000 new direct jobs, resulting in tens of thousands of jobs at businesses supported by the auto industry nationwide.

Who knows here or how they start, but a favorite myth of the anti-American conservatives web sites is that the gov'mint gave Chrysler to Italian automaker Fiat. Sounds crazy, because it is - Truth Squad: Did government give automakers to UAW, Fiat?

Obama Auto Bailout Has Created 10 Times More Jobs Than Romney Ever Did


Assessment of Tax Revenue Generated by the Automotive Sector (pdf) - "In 2010, the production, sales and service, and use of the automobile contributed $91.5 billion to state government tax revenues and at least $43 billion to federal government tax revenues.". Sometimes links go dead. If that should happen try using Google to search for the title of the hyperlink.

Another myth: Bush and Obama should not have helped out Detroit auto makers because auto workers make too much money. These critics think that Mitt Romney's vulture capitalism and offshore bank accounts are fine. So we're talking about critics who have their facts wrong and some wacky unpatriotic values. Auto Worker Salaries. If unions by nature of just being unions make bad cars and make car companies less competitive than conservative critics need to explain why Germany and japan has stronger unions than the U.S. Governments in both both countries have also helped out their auto industries.