Hillary Clinton’s economic advisor just threw Silicon Valley under the bus by claiming the U.S. tax law Apple uses to attribute most earnings to its tiny Ireland unit, is a “fraud.”
In a high profile Bloomberg interview just before Clinton accepted the Democrat nomination for president, her economics advisor, and Nobel Prize Laureate Joseph Stiglitz was asked how Apple, Inc. could be encouraged to bring back to the U.S. the $215 billion of their total $232 billion in cash that is held in Ireland.
In a stunning response, Stiglitz claimed that Apple is using a loophole in the U.S. tax system to shift its U.S. taxable earnings overseas to low-tax Ireland. He stated:
“Here we have the largest corporation in capitalization not only in America, but in the world, bigger than GM was at its peak, and claiming that most of its profits originate from about a few hundred people working in Ireland — that’s a fraud,”
Stiglitz asserted, “A tax law that encourages American firms to keep jobs abroad is wrong, and I think we can get a consensus in America to get that changed.” He added: “Our current tax system encourages companies to keep their money abroad, opens up a vast loophole through what is called the transfer-pricing system that allows them not only to keep their money abroad but, effectively, to escape taxation.”
Stiglitz said that newly proposed regulations by the Obama Administration’s U.S. Treasury Department will be aimed at curbing what he called, “earnings stripping.”
Silicon Valley earned the nickname of “Valley of the Democrats” during Obama’s Presidency, because the “Valley” has not only been able to offshore most of their employment, they also off-shored $89 billion of their U.S. tax liability through the use of foreign tax havens, according to a report from the Bureau of Investigative Journalism.
Breitbart News reported last month that “Silicon Valley Companies Pay Much Lower Tax Rates Overseas than in The United States.” The article detailed the wide differential between the highest and lowest state, federal, and international tax rates paid by the Standard & Poor’s top 100 tech and non-tech corporations.
With the U.S. having the highest marginal corporate tax rate of any developed nation in the world at 39.1 percent, the Obama Administration’s Treasury Department has not oppose Silicon Valley tech corporations outsourcing their tax rate to Ireland, which has a corporate tax rate to 12.5 percent and an effective tax rate with deductions of as low as 2.5 percent.
As a result, Apple, Facebook, Google, and most large Silicon Valley tech companies pay an average of 25 percent less in taxes on earnings than their non-tech Standard & Poor’s 100 peers, such as Boeing or Johnson & Johnson.
Despite 76,000 of Apple’s 115,000 employees being located in the U.S. and only 5,500 located in Ireland, Apple has been declaring about 50 percent of their earning in Ireland.
This lower tax rate for Silicon Valley corporations, explains why tech companies’ higher net cash flow results in higher stock market valuations, according to a recent McKinsey & Company report titled, “Valuing High-Tech Companies.”
The “Valley of the Democrats” showed their appreciation in 2012 by making 83 percent of their presidential campaign contributions to Barack Obama’s re-election bid.
In the 2016 presidential campaigns through May 30, Democrats Hillary Clinton and Bernie Sanders pocketed $8.6 million from 35,000 Silicon Valley contributors, compared to Donald Trump receiving just $21,000 from 52 contributors.
But in an effort by Clinton to shore up her support from the increasingly ultra-liberal Democrat Party and deflect being tattooed as the establishment candidate, Hillary Clinton appears to have just thrown Silicon Valley under the bus.
Apple has declined to make any comment regarding Stiglitz’s interview.
Breitbart News reported last month that “Silicon Valley Companies Pay Much Lower Tax Rates Overseas than in The United States.” The article detailed the wide differential between the highest and lowest state, federal, and international tax rates paid by the Standard & Poor’s top 100 tech and non-tech corporations.
While President Obama and the Democrat Congress increased U.S. corporate tax rates to a developed nation high of 39.1 percent, his Administration’s Treasury Departments did not oppose Silicon Valley tech corporations outsourcing their tax rate to Ireland, which has a corporate tax rate to 12.5 percent and an effective tax rate with deductions of as low as 2.5 percent.
As a result, Apple, Facebook, Google, and most large Silicon Valley tech companies pay an average of 25 percent less in taxes on earnings than their non-tech Standard & Poor’s 100 peers, such as Boeing or Johnson & Johnson.
Despite 76,000 of Apple’s 115,000 employees being located in the U.S. and only 5,500 located in Ireland, Apple has been declaring about 50 percent of their earning in Ireland.
This lower tax rate for Silicon Valley corporations, explains why tech companies’ higher net cash flow results in higher stock market valuations, according to a recent McKinsey & Company report titled, “Valuing High-Tech Companies.”
The “Valley of the Democrats” showed their appreciation in 2012 by making 83 percent of their presidential campaign contributions to Barack Obama’s re-election bid.
In the 2016 presidential campaigns through May 30, Democrats Hillary Clinton and Bernie Sanders pocketed $8.6 million from 35,000 Silicon Valley contributors, compared to Donald Trump receiving just $21,000 from 52 contributors.
But in an effort by Clinton to shore up her support from the increasingly ultra-liberal Democrat Party and deflect being tattooed as the establishment candidate, Hillary Clinton appears to have just thrown Silicon Valley under the bus.
Apple has declined to make any comment regarding Stiglitz’s interview.