Years ago a friend dragged me to a meeting where the main topic was how to create jobs.
It was after the house-market crash; the local economy at a standstill.
Elected officials, together with local business leaders, were trying to find ways to make it attractive for big employers to relocate to our town.
Someone suggested starting to look at California and New York.
Since I was familiar with California, I did speak-up to caution against recruiting efforts in the southern part of California.
Because of all the advantages offered by Mexico and Maquiladora plants, it would be difficult to entice those employers.
Cash-strapped governments bending over backwards to create jobs
Governments (city, state, national) are bending over backward to attract big companies: it’s good for the economy.
Big companies (like Amazon, Google, and Apple) want their stockholders to get the highest possible return on their investments.
These and other multinational companies strategically choose countries with the most advantageous tax policies.
They want to keep their operating costs, as well as tax liabilities, at the bare minimum.
However, we are starting to see these types of arrangements being dismantled by higher regulatory bodies.
$348 million tax bill
Apple Inc. is required to pay $348 million to Italy’s taxing authorities.
Allegedly Apple did not meet its Italian tax obligations for the past six years.
Further investigation (by Italians) is pending regarding its 2008-2013 taxable income. Apple appears to have allocated profits to its Irish subsidiary.
If that proves to be true, the company will owe more than $900 million in taxes.
Is the Irish government wrong for allowing this?
The European Union seems to think so. Last year they accused Ireland of bending international tax rules and letting Apple to shelter billions in profits.
The Irish did this in return for jobs.
Changes in the world of tax compliance
Last year more than 70 Swiss banks have avoided prosecution by disclosing information on their U.S. clients.
According to Justice Department, since 2009 more than $8 billion have been collected (in back taxes, interest and penalties)
The world of tax and tax compliance is going through tremendous changes.
Things are much more transparent than they used to be.
Speaking of money and privilege, Franklin D. Roosevelt said it best:
“The test of our progress is not
whether we add more to the abundance
of those who have much;
it is whether we provide enough
for those who have too little.”
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