It seems like the US coporations are in charge and the government is helpless to do anything, which is nonsense. Instead of makeing laws for a more favorable return of the money they are hiding, they need to rescind the law to make off shore profits exempt and get taxed on all their profits in the future. It sounds like they or their lobbiests wrote that law and I'm sure they will fight any change, but if the overall tax rate is lowered to help compensate, it would be a fair compromise. As it is, it is just abuse of the system.
@Nemos, one of the reason for more power to companies can be the globalization. Bigger companies are not restricted for supply and demand to one region only. This is helping them negotiate their terms and conditions so that government modify/bend the laws to suit their needs. there are ofcourse exceptions like that of China refusing to GOOGLE but general practice is that companies (especially big companies) are getting their way.
Bolaji: Thanks for the added information on the law. It's clear that more US-based companies are doing more business overseas--in fact, GE's CEO says it is his job as CEO to expand in emerging markets and create value for shareholders. That often runs counter to what the US wants, which is more jobs and revenue in the USA. I do think companies are taking advantage of loopholes, but like the original law itself, there are lots of problems with the tax code. It is interesting that none of the candidates running for office--of both parties--haven't brought this issue up yet. I'd like to hear what Mitt Romney thinks, although I'm sure that information is available somewhere online. I'll take a look.
Jacob, The tech companies and others are playing under the rules set by the government. They were aware of the jeopardy of double-taxation, which is why they are keeping the money offshore. The problem, though, is that in the case of companies like Apple, they are making so much money outside the US and can't use the money other than what Congress has approved. So, it's going to be left outside the country until someone blinks.
Nemos, I couldn't help feeling the government is helpless and these tech companies are using a blackmail tactic. Their position is simply that the money will stay overseas unless the government changed its tax law -- and the government can't do anything about it! Your conclusion that the companies are more powerful in this situation than the government is certainly correct but if Congress decides it's in national interest for the money to be repatriated then the companies won't stand a chance -- unless their lobbyists grease some palms in Congress and get it to do nothing as usual.
If you think US tax is bad try paying tax in Europe! I wonder where the Apple hoards are stashed? Apple has so much cash it can act like an old boring company (paying divs) AND like a startup (investing tons into R&D).
I think in certain countries like US, companies are liable to pay tax for the profits they had earned outside the country also. Since they had already paid tax for this money at source, where ever this company has presence, it's like a dual taxation. I mean ending up paying tax in both revenue generated country and parent country (Registered Corporate office).
In such cases certain countries had made some tax exemptions like, either they have to pay a nominal tax or park this money in parent country for reinvestments. I think US tax department can also think in a similar direction.
Bolaji, you are right that not much is going to change in the near future. Companies can help government at ransom but politics is not just about capatilism. i donot understand why a companies would want to bring money back (except to keep shareholders happy) especially when they are more global now and have more opportunity to expand in the growth markets.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.