If you had lots of cash on hand what would you do with it? Would you spend it buying expensive clothes or take a long needed vacation, or would you continue to save it putting it in a bank that gives a whopping 1.5 % interest rate? For most of us this is only a dream problem that will most likely never be one we have to face but for some of this country’s biggest companies it is a dilemma of gargantuan proportions.
Apple has an estimated 15 billion dollars in overseas accounts. Combined with Microsoft , Corporate America , General Electric , Cisco , and a few others there is an amazing 2 trillion dollars in combined overseas holdings. That is a lot of money to be sitting at those meager savings levels, but I’m sure the account managers of each of those accounts have a more creative strategy in mind.
One strategy not considered is bringing the money home to America. This option is most likely one of the least favorable options and would amount to throwing away 30% or an estimated 600 billion dollars, kinda like washing it down the sink, flushing it down the toilet or letting it blow out of the window. The tax percentage for these companies is at least 30%, or in other words one out of every dollar is being diverted for governmental reasons. How would you feel if every time you earned a dollar someone took .30 Cents? The true tax burden we all face is really quite unbelievable with direct and indirect taxes reaching a whopping 75% with a worldwide average of 75% or higher.
Did you know that the revolutionary war was started in part to do high taxes, usurious taxes on tea and other commodities. They were paying 3% or 3 cents from each dollar and were willing to die over that outrage and perversion on their liberties. We are more like the boiled frog that entered the cool water of the pot, never knowing the growing danger of an increased tax burden as it boiled out lives away.
It’s obvious to everyone that our government is not that great with money, nor is most governments for that matter. It’s a value of size and the cumbersome requirements to maintain bloated bureaucratic menageries, the costs never go down they will always increase, even when they tell us they are cutting the budget it really means they are simply slowing the increase of spending not reducing those addictive tendencies.
Why would any rational company want to bring their hard earned dollars (hard earned may be a relative term but they did EARN the money) just to see it flash away into the abyss of government.
There are many countries whose tax burdens are far less then America the Beautiful leading many companies to not only horde their money overseas but to move their entire operations in order to improve their bottom line.
Who among us would choose not to do the same? In fact the numbers of American’s leaving the country and giving up citizenship is at an all-time high. Like those that can afford such drastic changes most of us would choose a less burdensome life, most of us would choose to save more money or have more to spend out of what we earn. A majority of us have negative emotions toward our current tax system but unlike these large corporations we have little power to exact our desires, they do and I applaud them for their stance.
Thirty percent of my income is…let’s put it another way “something from nothing is nothing, and you’ve gotta have something” ….If you want to pay tax… but even those who make very little pay the highest percentage of their income toward those hidden taxes, having to pay higher gas prices (a large portion of the gas price is tax) higher food and consumables. Those with the least pay a higher percentage of what they earn making the current tax system harder on those who earn the least.
There is a solution, a very simple solution that would net the federal government a lot more than it’s currently getting, a solution so basic in its design that every time it’s implemented it works.
Lower the tax base and the money flows into those secrete government vaults faster than a river going over a cliff (that’s a waterfall, for those who need the written visual). Basic economics 101, lower the price and more goods are sold. Lower the tax rate and more dollars are collected, it works every time. If the government, any government wants to raise more money simply lower the tax ratio and they will have all they can spend (ok maybe that’s not the best way to put that) but they will have more than enough.
The problem with this simple scenario is the motivations and intent of taxes. Taxes are not simply a governments way to raise money, taxes are and have been for generations the means of social engineering, the process of moving money and wealth from the hands of some into the hands of others without regard to who earns or deserves or what is right or wrong, it’s the process of wholesale public manipulation. If all they wanted was to fix our roads, build new bridges or schools, or even outfit our soldiers they could easily lower the tax rates and have plenty of money to do all that their supposed to do, it’s not about the money.
I would love to hear about government’s true motivations, is it a conspiracy to control or change or is it a simple misguided management issue that prevents our leaders and the leaders of most countries from paving our streets. Why is it that they get so bent out of shape when successful companies try to shield their earned assets? Why do they demand so much and give so little?
Your answers and comments would be appreciated….