Would we be better off without public corporations?

[Craig234]

My argument is from a legal standpoint 'acting in the best interests of shareholders' is such an incredibly broad term that it is exceedingly rare for any company executives to run afoul of it. I'm not privy to exactly what Apple has set up but it is also likely that such funds can't be brought back into the US without being taxed, therefore Apple could have chosen to pay taxes on that $$ in order to use it to invest in the US, etc.

Long story short, I do not believe it is accurate to say that Apple's management was required to structure their finances this way. Maybe it made good business sense, but it was not forced upon them.

Can you name me one tech company that doesn't use this or another flavor of tax evasion?

Again as I said, NPR reported that basically every tech company does this sort of thing - and they weren't excluding other copanies, they were only discussing tech companies.

Given that, from whatever combination of pressures they feel - from the legal obligation to 'best interests of the company', to getting a shareholder lawsuit, to getting voted out, to getting criticism in the business press, to simply increasing their bonus by increasing profits, those pressures seem to add up to leaving little choice in the matter, whatever the theoretical options they have.

I think a lot of people - and I don't mean you - have an exaggerated idea of what public companies' management can do, when competitive pressure and everything being demanded to be for short-term profit basically mandates a lot of their options - with the constant threat they can be replaced if they don't do as expected. Not taking advantage of tax evasion their competitors are would generally be viewed as negligence IMO.

That's why the solution here is not to beat up the companies, but to fix the law and that needs fixing the corruption of our elections.

This is how the politics work - the public will be sold on the need for tax reform with these sorts of stories, highlighted with these hearings, until the Congress finally 'gives in' and does what the public wants - except it'll likely be tax reform that actually just helps their donors and hurts others.

Politics does this a lot - take a popular cause, and pass a pass a bad law about it.

There are countless examples - but one is how in Florida, the public was sold on the need for preventing voter fraud and for reform - which opened the door for reform that created measures that disenfranchised tens of thousands of Democratic voters. Of course the case of using 9/11 to get the Iraq War approved is a classic.

So at the same time we're just demanding tax reform - watch for that reform to make things a lot worse, if they can get away with it.

 

[Mxylplyx]

I think public corporations are fine, and quite beneficial as a means of raising capital to facilitate growth. Giving corporations political influence is where we go wrong.

 

[Lithium381]

Craig you mentioned earlier that the counterbalance to these public companies having power is government oversight and regulations. the government is us. are you approaching the argument from the viewpoint that the money that's being held offshore is "our money" and that they need to give it to us, for the greater good of OUR country, as opposed to being used to help the global economy somehow?

 

[Lithium381]

I think public corporations are fine, and quite beneficial as a means of raising capital to facilitate growth. Giving corporations political influence is where we go wrong.

Do the corporations themselves have political influence? They don't get to vote on the floor of congress, do they? Sure they can make "suggestions" but in the end, it's our elected officials that say yay or nay.

 

[Pulsar]

Do the corporations themselves have political influence? They don't get to vote on the floor of congress, do they? Sure they can make "suggestions" but in the end, it's our elected officials that say yay or nay.

Yes and no. Most politicians don't run because they think they can improve the lives of their constituents. They run for the power they get after the election. Once they've got it, they certainly don't want to lose it. When a big company with money to burn knocks on their door offering campaign funding, politicians would be be stupid not cater to the companies to curry favor and get the money that gets them the votes.

Once upon a time, I would have said limit all donations to personal donations. However, now that companies are 'people', we can't even do that.

 

[Craig234]

Craig you mentioned earlier that the counterbalance to these public companies having power is government oversight and regulations.

Yes.

the government is us.

Can you clarify that point?

are you approaching the argument from the viewpoint that the money that's being held offshore is "our money" and that they need to give it to us, for the greater good of OUR country, as opposed to being used to help the global economy somehow?

Here's how I'm approaching it.

There is business activity that we've decided it makes sense to tax. Corporations are money-making machines with laws designed to facilitate that, and the government takes a share of that for the good of the society the corporations thrives in. The issue here is the details of how that tax works.

Whatever rules the government comes up with to say how the tax works, businesses are greatly incented to look for ways to evade those taxes. If things are made too simple, society loses benefits - like encouraging R&D or solar power - but complications more often seem to be designed by lobbyists creating corrupt benefits. Let's just stick to basic taxes.

What we have in this example, and it's one of just many, is that Apple should profit from iTunes business in the US and pay taxes on those profits. By creating this evasion where it has a subsidiary 'bill it' for most of those profits, it gets to ship them overseas untaxed as an expense.

To answer you're question, I'm not saying that's our money - I'm saying that's taxable money.

As it is it's sitting in savings - many trillions of dollars hoarded by companies worldwide - not doing much good.

It seems US companies are trying to blackmail the US into giving it a tax break outside the law - not passed by normal democracy, but given under extortion.

'Lower our tax rate and then we'll bring it back'. It never should have left in the first place untaxes - but that's a problem with our tax laws and enforcement.

Republicans generally are already bent over holding their ankles saying 'sure!' - I was just watching Republican Senator Kelly Ayott (sp?) ask the Apple CEO - after gushing about her use and love of their products - what should the tax rate you pay be so you are competitive?

How insane is it to ask the people who have to pay the tax and are under huge pressure to minimize it, to zero if they could, what it should be?

That's like a judge asking a convicted criminal, 'ok, sentencing time, how long should your sentence be?'

You can tell who she is representing with that question, and it's not the public.

Does that answer your question?

 

[Craig234]

Do the corporations themselves have political influence? They don't get to vote on the floor of congress, do they? Sure they can make "suggestions" but in the end, it's our elected officials that say yay or nay.

Lithium, you would be shocked. I'll use the Bush administration as an example - they way they largely governed was to have operatives demand that corporations donate ONLY to Republicans, and donate plenty. They even required them to hire Republican operatives as employees in their donation program to keep an eye on things. If they did as demanded, they were literally allowed to write their own laws for Republicans to pass.

There was one major bill the Republicans got embarrased by because when the circulated, it still had the identifying information of the lobbyist corporation who wrote it.

So technically, the members vote, but they are highly expected to support the leadership's agenda, which is driven by those donors.

That's why, for example, slave labor companies in the Marianas Islands could buy Tom DeLay and associates golf vacations there, and while the Senate unanimously - both parties - passed a reform bill to help the young women workers, Tom DeLay promised the owners he'd keep it from getting a vote in the House, and he did. So ya, members vote, but that's not the real story.

Medicare Part D was pushing some Republicans too far - they ran on fiscal conservatism, and this bill was a large new benefit, but the most controversial part was a clause prohibiting the government from negotiating drug discounts, which would increase the prices by hundreds of billions of dollars all giveaway profit to the industry who was the GOP's top donor.

Enough Republicans were refusing to go along the bill failed. So the leadership did something that reported had never been done - they just extended the vote all night, while leadership walked around the floor handing out envelopes and pulling members to the side. One said he was told they knew his sone was running for office and if he switched his vote to yet, the party would give his son $100,000 for his campaign and if he didn't, they would blackball him from any election. He switched his vote (and retracted the story). Remember that organization ALEC paid for by America's large corporations? They write legislation and then push it around the country in Republican-controlled states. In a lot of these reportedly a large percentage of all the legislation they pass comes from outside groups like that.

That is horribly corrupt.