Being accountable is tough business, and apparently not very cost effective.
As an ordinary citizen, I find it hard to not be a little envious of corporate America when I stop long enough to consider some of the advantageous loopholes it has persuasively lobbied into the tax code ‘just for corporations’ over the last decade or so. These loopholes have been decidedly designed to reward only those belonging to the Corp Club, and should they ever be applied to the itemized personal tax return of an average American taxpayer, that individual’s insolence would be rewarded with the threat of a prison sentence akin to Al Capone.
A twisty loophole that has made recent headline news can be found under the tax code catch phrase “transfer pricing”. Also known on Wall Street as “income shifting”, “the Double Irish”, and for some insiders “the Double Dutch”. To the locals feeling pick-pocketed on Main Street, however, it’s known as another case of “Greed Takes a Holiday”.
Any true capitalist would logically expect every large American corporation that is fully committed to increasing its bottom line profits and dispensing hearty executive bonuses to make full use of this highly remunerative 'income shifting' loophole without compunction. Nevertheless, I'll bet the accounting office over at Forest Laboratories, Inc. has become quite depressed since it's had the misfortune of being singled out as the new face of ‘income shifting’ in Bloomberg’s latest exposé.
Forest Laboratories, Inc. is the maker of Lexapro - the third most popular anti-depressant sold almost solely in the United States. Just because Lexapro generates billions of dollars in U.S. sales every year, doesn’t mean that the U.S. Treasury has seen any reduction in its deficit from all of the tax dollars you’d expect it to be collecting on Lexapro’s U.S. revenues. And “Why not?”, you might ask, when the real question is “What tax dollars?”
Thanks to 'transfer pricing', Forest Laboratories, Inc. effectively - and legally - evades paying U.S. income taxes on much of its Lexapro U.S. profits by transferring said profits overseas to a subsidiary in Ireland. From there (and Ireland ironically gets shorted along the way as well), the profits take a brief holiday in Amsterdam before making an electronic landing on the no-tax island paradise of Bermuda.
Back when the world was busy feeling flush, all this talk about the Double Irish would’ve likely been swept aside with relative indifference. Attitudes have dramatically changed now that the bottom has fallen out. It seems to me that the implemented systems of taxation around the globe have become so incredibly convoluted that when the boom went bust, the masses went looking for accountability from the very administrators and regulators who’d been busy looking the other way as their civic treasuries subtly mushroomed into a big Ponzi scheme. Now there’s nothing new coming in from the top to feed the bottom.
I do believe that most of us genuinely appreciate the infrastructure and communal support services that are made possible through taxes paid into the system even though few really admit to wanting to pay those taxes.
Unfortunately it’s the same old story every time a cash flow crisis hits, and those responsible for managing (or mis-managing) the money start crying out for more, more, more. And historically it’s the tax paying population least able to afford the cash call that finds itself burdened with the bulk of the tax bill. So when the levied tax increases become untenable for the citizens who don’t have access to the same tax evading loopholes as the Corp Club, these citizens tend to create their own underground loopholes.
In America it's called doing business ‘under the table’. Around the Mediterranean it’s called doing business 'the Italian way’. Just ask the Greeks...or the Spanish…or the Portuguese…and of course the Italian experts.
Are you depressed yet? Perhaps it's time to stir the pot with our own version of the Double Irish. It might go something like this: you ask the man in charge for a second bowl of gruel, and I’ll quickly stir in the Lexapro.
Thanks to 'transfer pricing', Forest Laboratories, Inc. effectively - and legally - evades paying U.S. income taxes on much of its Lexapro U.S. profits by transferring said profits overseas to a subsidiary in Ireland. From there (and Ireland ironically gets shorted along the way as well), the profits take a brief holiday in Amsterdam before making an electronic landing on the no-tax island paradise of Bermuda.
Back when the world was busy feeling flush, all this talk about the Double Irish would’ve likely been swept aside with relative indifference. Attitudes have dramatically changed now that the bottom has fallen out. It seems to me that the implemented systems of taxation around the globe have become so incredibly convoluted that when the boom went bust, the masses went looking for accountability from the very administrators and regulators who’d been busy looking the other way as their civic treasuries subtly mushroomed into a big Ponzi scheme. Now there’s nothing new coming in from the top to feed the bottom.
I do believe that most of us genuinely appreciate the infrastructure and communal support services that are made possible through taxes paid into the system even though few really admit to wanting to pay those taxes.
Unfortunately it’s the same old story every time a cash flow crisis hits, and those responsible for managing (or mis-managing) the money start crying out for more, more, more. And historically it’s the tax paying population least able to afford the cash call that finds itself burdened with the bulk of the tax bill. So when the levied tax increases become untenable for the citizens who don’t have access to the same tax evading loopholes as the Corp Club, these citizens tend to create their own underground loopholes.
In America it's called doing business ‘under the table’. Around the Mediterranean it’s called doing business 'the Italian way’. Just ask the Greeks...or the Spanish…or the Portuguese…and of course the Italian experts.
Are you depressed yet? Perhaps it's time to stir the pot with our own version of the Double Irish. It might go something like this: you ask the man in charge for a second bowl of gruel, and I’ll quickly stir in the Lexapro.
Please sir, I want some more…
© by DK King
© by DK King
