Thursday, April 09, 2015

Where is the money from off shore tax revenue?

Off and on, I have been wondering about how the off shore tax revenue is used since there are many reports in Australian news papers about the missing revenue. Here is fairly comprehensive report about the US situation. One passage:
"....these “trapped overseas” profits are neither overseas nor trapped. It is true that for accounting purposes, multinational corporations keep these dollars off of their U.S. books. But in the real world, the money is often deposited in U.S. banks, circulating in the U.S. economy, and available for a wide variety of domestic investments. For nearly all practical purposes, that money is already here, being put to work in the U.S. economy."
And much more.
A comment from Malcolm Maiden: "Treasury's report says by the way that the most efficient tax would be a new broadbased land tax. Unlike multinationals, land is immobile. It can't be moved to a tax haven the same way the profits from the sale of information technology and digital intellectual property can . It would be simple to administer, and it would be collected from both domestic and foreign landowners."
Malcolm Maiden also says "US Treasury Secretary Jack Lew has told his G20 colleagues that the US doesn't want to implement a plan that results in its multinational corporate  tax base being eroded." But the few comments I saw from last year by Jack Lew and Obama seem to be in the opposite direction, but they have no hopes of passing a legislation to counter it because of US senate and Congress (However, there are some questions about Jack Lew)

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