Do corporations stashing profits offshore deserve animadversion?
September 3, 2015
Steve Jobs is the loudest figure in the history of mankind famous for creating the most popular and the richest international business company. It became known in 2011 that company’s funds amounted to $25 billion and around the half of this sum circulated abroad. It goes without saying that Apple’s giant gains got round the US economy being concentrated in Irish subsidiaries.
At the end of 2011 Steve Jobs stored yield from 5.5M Apple’s shares and 138M Disney’s shares on offshore accounts. The fact that all this money was free of tax makes all the wide audience resent.
But in point of fact, was Mr. Jobs, who had found consumer’s response and had brought cutting-edge innovations into 5 industries, a betrayer because he held all the income untaxed?
Don’t be shocked but there is justification for such a behavior.
Offshore activity is being blackened by reputable authorities, financial organizations exclusively serving the political goals and indignant individuals performing mass media. But the fact that investors and businessmen stash their capital overseas as the only way to escape from unreasonable high taxation is always glossed.
It is normal for any company, sole proprietorship or even simple citizen to look for ways of tax burden reduction. Of course corporations take greater responsibility for money redistribution within the country.
Apple started its activity in California but in pursuit of profit optimization moved its business to Nevada, thus saving almost 9 percent of taxed income. The next step was moving business to Ireland which allowed saving huge amounts of gains.
Steps taken by global giants such as Apple, Google, Microsoft and others aiming to hide from predatory taxation are absolutely legal and encouraged by international financial organizations such as World Bank, WTO and OECD.
Contemporaries have already forgotten that the American Revolution in the 18th century was moved by ideas of tax reduction. The fact that American economy levies the highest tax in the world on businesses stays at a discount. US 39% tax rate for corporations’ income essentially exceeds the 27% Norwegian rate, 25% China’s rate and even 20% Russian rate.
Landing capitals in off shore zones turns to be quite reasonable and not just corporations but small businesses and single investors may legally take advantage of such option. By doing so, you save a significant part of income which may be reinvested into company’s development, innovations or charity. Thus you may be sure that hard earned money doesn’t go to finance war, weapons and irrelevant social projects.
People living in a democratic country have an opportunity to express their opinions with the help of a vote. Voting is not just filling the blank at the elections. You also vote by the things you buy and services you consume. Each time when you buy Apple’s gadget you vote for it with the help of dollars from your pocket. Think about this and realize that each product and service which exists at the market is supported by consumers’ demand.
The same refers to business. By choosing incorporate offshore company for registering a company, business owners vote for equitable economic conditions in the most tactful and peaceful way. They want to exist, want to produce really qualitative and cost-effective goods and services; they want to bring innovations and improvements into this world.