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Obama's "attacks" on foreign tax havens... (pg. 2)
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| pmoisse |
| quote: | Originally posted by jerZ07002
Come on dude - I just spent all that time explaining why itis NOT a loophole. |
My poor choice of words. I do understand why it's not technically a loophole, but a facility that was put there on purpose.
I'm just curious why they don't adjust the policy to counteract the loss of tax revenues somewhat |
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| thedoggyworld |
| quote: | Originally posted by pmoisse
Foreign companies weren't what inspired my first post. |
Yes it's a typo.
Jrez --
| quote: | | What would you say that Obama's agenda is since he looking to add 12 billion dollars towards IRS tax enforcement? |
and again in case you missed it.
| quote: | | What would you say that Obama's agenda is since he looking to add 12 billion dollars towards IRS tax enforcement? |
Jerz hasn't proven anything other than giving a statement that there are no loopholes because the written law does not come out and say it's a loophole.
Yes, so american owned foreign operations were able to defer taxes in order to compete in that jurisdiction. Which could mean any number of things:
1)They lie about where the income is coming from and put the money through any number of instruments to cover it up.
2)They hold the money in the foreign banks to hide their identities because they're breaking the law in the first place.
All I got from this "treatise" was that in 2004 the rules were relaxed which of course we would expect from the Bush administration.
JREZ -- The concept of "tax defferal" is not really that complicated and I do not see how defining it has anything to do with how the concept encourages investment and tax evasion outside the USA.
Your arguments and name calling are really juvenile, and I'm sure your legal skills are the complete bomb considering the fact that you're in tax law and don't litigate? Or you do? A litigating tax lawyer is you??? No.
JREZ -- a third time:
| quote: | | What would you say that Obama's agenda is since he looking to add 12 billion dollars towards IRS tax enforcement? |
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| thedoggyworld |
I can translate JREZ's legal claims for those outside the legal field.
He claims that he has the answer to this issue because he "does this for a living" and that "lawyers love change."
Not really. Paid lawyers love "anything that will bring in clients that will pay money to often times get really bad information."
Considering his behavior I'd say he's likely an attorney of this variety.
If he is in a larger firm, even better. He is so pure and implies that ALL HE DOES IS EXPLAIN THE LAW.
Lawyers 1)want to get paid 2)have other attorneys like them and 3)be liked by the courts. They may have an agenda for their firm, a special interest group, or for the courts but in my experience the CLIENT's INTEREST IS USUALLY FURTHER BEHIND IN THE LIST.
I DO NOT THINK ALL THAT MANY LAWYERS ARE EXCITED FOR THE OBAMA ADMINISTRATION. Isn't that right jrez? They can get away with very unethical conduct currently and by the looks of it that will be on the table in the next 4 or 8 years.
On the other hand, it never hurts to meet with a lawyer: http://www.abanet.org/. |
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| Groundhog Boy |
| quote: | Originally posted by thedoggyworld
I can translate JREZ's legal claims for those outside the legal field.
He claims that he has the answer to this issue because he "does this for a living" and that "lawyers love change."
Not really. Paid lawyers love "anything that will bring in clients that will pay money to often times get really bad information."
Considering his behavior I'd say he's likely an attorney of this variety.
If he is in a larger firm, even better. He is so pure and implies that ALL HE DOES IS EXPLAIN THE LAW.
Lawyers 1)want to get paid 2)have other attorneys like them and 3)be liked by the courts. They may have an agenda for their firm, a special interest group, or for the courts but in my experience the CLIENT's INTEREST IS USUALLY FURTHER BEHIND IN THE LIST.
I DO NOT THINK ALL THAT MANY LAWYERS ARE EXCITED FOR THE OBAMA ADMINISTRATION. Isn't that right jrez? They can get away with very unethical conduct currently and by the looks of it that will be on the table in the next 4 or 8 years.
On the other hand, it never hurts to meet with a lawyer: http://www.abanet.org/. |
"Lawyers want to have other attorneys like them." Is this a joke?
The reason that he said that lawyers like change is that change is what gives them business. Figuring out how to work the interests of the client into the changes presented either by legislation or other changes. If everything's status quo, there's not much billing to be done.
Also, lawyers voted predominantly for Obama, I'll have you know. Just look at the funding that they did compared with McCain. The same thing goes for the banks, I'll add. |
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| thedoggyworld |
Change can give them business. The status quo can give them business. So can a divorce and a botched surgery which leads to a guy's arm getting amputated.
Attorney's are real pros at extending "billable hours." There are many many fine attorneys but usually they cost big bucks.
Whether or not practicing tax attorney's prefer Obama's new tax rules, I do not know. But a general statement that "attorney's like change" is just an overgeneralization.
I made the statement you've quoted because the sort of "old boy" attorney networks, political agendas and institutional bias' dominate the legal field to such an absurd extent that these factors influence the case as much if not more than the facts of the case a lot of the time.
Obama is an attorney, I'm sure that helped him. It's not like ALL ATTORNEYS ARE BAD, but that field needs reform as bad as health care does. |
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| pkcRAISTLIN |
| jerz > thedoggyworld. |
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| thedoggyworld |
| I don't know about that one! |
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| Q5echo |
| quote: | Originally posted by thedoggyworld
Change can give them business. The status quo can give them business. So can a divorce and a botched surgery which leads to a guy's arm getting amputated. |
holy man. thats an amazingly ignorant position to take. you accuse him of some crap about "overgeneralization" of a simple concept about his occupation and then dump this crap on him as a defense? :wtf: i'll let you stew in your own intellectual hypocricy while i explain something very simple to you.
tax law, unlike or to a much greater degree your aforementioned examples of the breed like family law (divorce attorneys) and personal injury law or public defenders or criminal prosecutors, is the one sub-dicipline of law that is constantly evolving through the winds of politics, economics and social engineering.
the complexities of tax law just as merely a static sub-dicipline as an undergrad require signifigantly more course work than your run-of-the-mill law degree. not to mention probably the extensive graduate study one needs to be an effective tax lawyer. i'll have to let jerz explain that one. |
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| jerZ07002 |
| quote: | Originally posted by thedoggyworld
What would you say that Obama's agenda is since he looking to add 12 billion dollars towards IRS tax enforcement? |
i don't care. that's not the issue i was addressing.
| quote: | Originally posted by thedoggyworld
Jerz hasn't proven anything other than giving a statement that there are no loopholes because the written law does not come out and say it's a loophole. |
*slaps head*
Here we go again. A loophole is a weakness in a law that is taken advantage of resulting in unintended consequences. I could give many examples of loopholes in tax law. E.g., carried interests taxation for private equity and hedge fund managers, numerous basis stripping transactions, etc....
Here's another description of the legistlative history, and since you don't get how to interpret it, i'll give the stripped down idiot's guide version (after the quote):
| quote: |
B. 1962 Subpart F Legislation
The Subpart F legislation enacted in 1962 substantially reduced the remaining opportunities to defer U.S. taxation on income earned through foreign corporations. This section discusses the Kennedy Administration’s proposal, Congress’s response, and provides an overview of the 1962 legislation.
1. Kennedy Administration Proposal
a. Background
As stated above, the genesis of Subpart F was a proposal presented to Congress by the Kennedy Administration. That administration was confronted with a significant and increasing problem of a U.S. negative balance of payments. At that time, a significant outflow of foreign investment was occurring, and the Kennedy Administration perceived that the current U.S. tax system, in conjunction with the tax systems of certain foreign countries, consistently favored U.S. investment abroad compared with investment in the United States. 36
As discussed above, the U.S. tax system before Subpart F provided significant opportunities for deferring U.S. taxation on income earned through foreign corporations. The Kennedy Administration expressed the concern that the practice of deferring taxes through investment in foreign corporations: (1) gave them an unfair advantage over domestic businesses, and (2) provided improper incentives for investment abroad. 37
In 1961, the Kennedy Administration determined that there were two general types of exploitation of the current tax system by U.S. corporations with foreign subsidiaries, which it labeled “tax deferral” and “tax haven deferral.” With respect to the first category, U.S. corporations established foreign subsidiaries to engage in the production of goods or the provision of services, or to serve as foreign distributors of products manufactured in the United States by the U.S. shareholder. Such U.S. corporations were able to postpone U.S. taxation indefinitely on income earned by the foreign corporation by reinvesting the foreign earnings in other foreign investments or by obtaining cash accumulated by the foreign corporation through borrowings, which would not be taxable under the then general rules. The Kennedy Administration found this practice of “tax deferral” objectionable because, to the extent that the foreign country’s corporate tax was less than the U.S. corporate tax, it created a tax incentive for companies to operate overseas. 38
Considered more egregious, however, was the practice referred to by the Kennedy Administration as “tax haven deferral.” United States corporations also organized controlled foreign corporations in “tax haven” countries such as Switzerland, the Bahamas and Panama in order to receive passive types of income at little or no tax cost in the foreign country, or to serve as a base for sales of products throughout the world, and with no current U.S. taxation. The Kennedy Administration found this practice especially offensive because U.S. corporations were also taking advantage of the multiplicity of tax systems through artificial arrangements between parents and subsidiaries regarding inter-company pricing, transfers of patent or licensing rights, shifting of management fees, and similar arrangements. 39
b. Proposal
The Kennedy Administration recommended that tax deferral practices be eliminated by legislation which “would tax each year American corporations on their current share of the undistributed profits realized in that year by subsidiary corporations in economically advanced countries.” Such legislation “would also apply to individual shareholders of closely held corporations in these countries.” In addition, the administration recommended the elimination of “tax haven devices” in both developed as well as underdeveloped countries. 40
2. Congress’s Response — Revenue Act of 1962
A bill was introduced in the House in 1962 addressing the concerns of the Kennedy Administration. 41 The resulting legislation adopted by both the House and the Senate in the Revenue Act of 1962 included Subpart F and other related rules providing for the taxation of certain U.S. shareholders of controlled foreign corporations currently on certain undistributed earnings of controlled foreign corporations. 42
The legislation as enacted, however, fell short of the President’s recommendations. It did not eliminate tax deferral generally, but instead was concerned primarily with the more egregious form of tax deferral, referred to by the Kennedy administration as “tax haven deferral” where U.S. companies shifted certain income into low-tax jurisdictions. 43
In this regard, the House Report states:
Your committee’s bill does not go as far as the President's recommendations. It does not eliminate tax deferral in the case of operating businesses owned by Americans which are located in the economically developed countries of the world. Testimony in hearings before your committee suggested that the location of investments in these countries is an important factor in stimulating American exports to the same areas. Moreover, it appeared that to impose the U.S. tax currently on the U.S. shareholders of American-owned businesses operating abroad would place such firms at a disadvantage with other firms located in the same areas not subject to U.S. tax. 44
Document Header:
Checkpoint Contents
International Tax Library
BNA International Tax Library
TM Foreign Income Portfolios (BNA)
Taxation of U.S. Persons' Foreign Income
Portfolio 926: Subpart F — General
Detailed Analysis
II. Background and Legislative History
B. 1962 Subpart F Legislation
© Copyright 2009 Thomson Reuters/RIA. All rights reserved. |
OK, here it is:
(1) the kennedy administration wanted to end all deferral of tax on foreign earnings, so it sent it's proposed bill to congress.
(2) Congress said, "hell no foo, deferral helps US corporations, we want to continue allowing them to defer tax on some of those earnings, when it is not abusive."
(3) Kennedy said, "aight, i'll take what you give."
(4) Congress said, "good bitch, we don't like your stupid idea, taxing US corporations on all foreign earnings would up american competitiveness."
(5) Kennedy said, "ok, ok, ok, i get it, we don't want to tax all foreign earnings of our corporations, just certain abusive situations.....jeez."
Hopefully you see that it can't be a loophole at all because ending all deferral of taxation was contemplated (and a bill was sent to congress), but congress repudiated that idea. As a result, the legislation was drafted to specifically allow US corporations the ability to defer taxation on certain types of earnings.
Essentially you are saying that any consequences that are detrimental to the Treasury are classified as loopholes. that's stupid! If you don't get it now, then you're hopelessly lost.
| quote: | Originally posted by thedoggyworld
Yes, so american owned foreign operations were able to defer taxes in order to compete in that jurisdiction. Which could mean any number of things:
1)They lie about where the income is coming from and put the money through any number of instruments to cover it up.
2)They hold the money in the foreign banks to hide their identities because they're breaking the law in the first place. |
i don't even understand what the hell that means. Corporations don't hide money in bank accounts (typically). That's individuals do.
| quote: | Originally posted by thedoggyworld
All I got from this "treatise" was that in 2004 the rules were relaxed which of course we would expect from the Bush administration. |
i am beginning to believe that is because of a lack of comprehension skills.
| quote: | Originally posted by thedoggyworld
JREZ -- The concept of "tax defferal" is not really that complicated and I do not see how defining it has anything to do with how the concept encourages investment and tax evasion outside the USA. |
defining it as what? what does that even mean? Who cares about tax evasion outside of the US?
I'm not spending more than 10 seconds trying to understand what you write, and since that allocated time has elapsed, i'm just passing over this unless you want to elucidate the point.
| quote: | Originally posted by thedoggyworld
Your arguments and name calling are really juvenile, and I'm sure your legal skills are the complete bomb considering the fact that you're in tax law and don't litigate? Or you do? A litigating tax lawyer is you??? No. |
one thing i don't do is name call because it weakens an argument. I actually went back to see if i did that, and there is no such name calling. Thank you, come again!
tax law is generally much more complicated than litigation. Rules that litigators follow (i.e., rules of evidence and trial procedures) rarely change, and those concepts are far from difficult to understand. Sure, they also need to understand the laws that control the issues they are litigating, but those laws rarely change either (i.e., tort and criminal law have remained relatively static over the past 50 years, and while securities laws have changed somewhat over the past few year it is nothing compared to the change in the tax area). On the other hand, tax law changes on a daily basis. Taxpayers are continuously looking for loopholes and creative transactions to avoid the paying taxes (and many times the taxpayer doesn't do anything illegal, the taxpayer just takes a highly technical position that their transaction is outside the law - or sometimes within but resulting in a consequences that wasn't intended - and the intended purpose of the law). Consequently, each time the IRS discovers these transactions, it has to create a remedy through administrative rules. The IRS issues guidance on tax positions on a daily basis. With other areas of the law, the regulatory body is active, but those bodies (e.g., SEC) doesn't issue groundbreaking guidance on a near daily basis. I mean, how does a citizen try to avoid the anti-churning or insider trading rules on a technicality? Not many people are willing to risk their liberty like they are willing to risk a few extra dollars on an interest penalty.
I'll admit, there's certain more ability for creativity among litigators, but it is definitely not more difficult than tax law. |
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| jerZ07002 |
| quote: | Originally posted by thedoggyworld
I can translate JREZ's legal claims for those outside the legal field.
He claims that he has the answer to this issue because he "does this for a living" and that "lawyers love change." |
comprehension skills - son!
I only brought up being a lawyer to show why i wouldn't be a tax cheat. I would lose my ability to make a living, whereas, mcdonalds likely doesn't care about you being a tax cheat. i don't know, i just assume they wouldn't.
| quote: | Originally posted by thedoggyworld
Not really. Paid lawyers love "anything that will bring in clients that will pay money to often times get really bad information." |
we turn down clients frequently for various reasons even though it would be profitable in the near term to work with them.
| quote: | Originally posted by thedoggyworld
Considering his behavior I'd say he's likely an attorney of this variety. |
please point to this behavior and describe how it means I'm a schiesty lawyer!
| quote: | Originally posted by thedoggyworld
If he is in a larger firm, even better. He is so pure and implies that ALL HE DOES IS EXPLAIN THE LAW. |
please explain how you rationalized that I implied that my only function is to explain law.
| quote: | Originally posted by thedoggyworld
Lawyers 1)want to get paid 2)have other attorneys like them and 3)be liked by the courts. They may have an agenda for their firm, a special interest group, or for the courts but in my experience the CLIENT's INTEREST IS USUALLY FURTHER BEHIND IN THE LIST. |
1) everyone wants to get paid,
2) everyone wants to be liked,
3) many lawyers aren't trial or appellate lawyers, as such, being like by a court (i.e., a judge) isn't even a remote concern for us transactional lawyers.
4) actually, the client's interest is normally el numero uno interest. If an attorney isn't a zealous advocate for the client, it will harm the attorney's reputation, making it more difficult to get clients.
I'm just going out on a limb here, but typically a public defender is overburdened, so your lawyer probably has an enormous case load with which to deal. It's not that he doesn't care about your particular issues, more likely, he just has too many clients at the moment.
| quote: | Originally posted by thedoggyworld
I DO NOT THINK ALL THAT MANY LAWYERS ARE EXCITED FOR THE OBAMA ADMINISTRATION. Isn't that right jrez? They can get away with very unethical conduct currently and by the looks of it that will be on the table in the next 4 or 8 years.
On the other hand, it never hurts to meet with a lawyer: http://www.abanet.org/. |
i can't speak for all lawyers, but most that i know supported obama.
most lawyers are very ethical. what other profession do you know has a requirement for civil service (i.e., pro bono work)?
lawyers are no more unethical than any other professionals. you're just hatin' because we write the rules. |
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| jerZ07002 |
| quote: | Originally posted by thedoggyworld
Change can give them business. The status quo can give them business. So can a divorce and a botched surgery which leads to a guy's arm getting amputated.
Attorney's are real pros at extending "billable hours." There are many many fine attorneys but usually they cost big bucks.
Whether or not practicing tax attorney's prefer Obama's new tax rules, I do not know. But a general statement that "attorney's like change" is just an overgeneralization.
I made the statement you've quoted because the sort of "old boy" attorney networks, political agendas and institutional bias' dominate the legal field to such an absurd extent that these factors influence the case as much if not more than the facts of the case a lot of the time.
Obama is an attorney, I'm sure that helped him. It's not like ALL ATTORNEYS ARE BAD, but that field needs reform as bad as health care does. |
please - i never said that change is the only way lawyers get business, but it certainly is a significant way lawyers get business. The SOX laws after Enron and Tyco resulted in some huge fees for lawyers to explain the new rules for executive responsibility, and to draft new corporate guidance policies. |
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| jerZ07002 |
| quote: | Originally posted by pkcRAISTLIN
jerz > thedoggyworld. |
did i ever tell you how much i love australians? i'm diggin this aussie girl who works in my building. ;) |
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