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Comment by ghshephard | Hacker News Reader

I agree with you, but playing devil's advocate, American Citizens pay US taxes on their income, regardless of where they live (http://americansabroad.org/issues/taxation/us-taxes-while-li...) - so why shouldn't US Corporations be required to Pay US Taxes on their income, wherever they make it?

Note - my answer to that is very, very quickly you would find that successful US companies re-incorporating in other countries, in much the same way wealthy Americans will sometimes give up their US citizenship.

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> why shouldn't US Corporations be required to Pay US Taxes on their income, wherever they make it?

Because the law doesn't say they have to. That's enough for me.

I'm a left-wing, pro-high-tax guy, but I can never understand people who get angry at corporations for obeying the law. Besides being nonsensical, it's actively counter-productive. So long as people are focusing their attention on the corporations, nobody is pressuring the politicians to fix the actual problem.

That will be true if corporations were forbade to enter the political debate at all.

But a corporation obeying a law they helped draft, lobbied for, water down, or prevented from changing is somewhat different in my opinion.

Let me be more clear, "Why shouldn't the law require US corporations to pay US taxes on their income, wherever they make it?"

I think one naive answer is that US citizens living abroad get credits or deductions for local taxes they may have paid. A more general one is that we already accept the idea that corporations and individuals are governed by different tax laws so "Why shouldn't one be exactly like the other?" has a somewhat flippant reply in "They don't, already, for various reasons, so why should they be?"

But I don't think the objections (or counter-arguments) to Apple's behaviour as simplistic as that - it's just I don't quite understand what the source of the controversy is and was hoping that someone else did.

Regarding tax credits - that's fine, let's say Ireland taxes at 12.5%, and US at 35%, then all companies would be required to pay would be the difference, 22.5%.

Pay it to whom, though? Ireland? The US? Does the country with the highest tax rate get to set the global corporate tax rate?

I don't think any developing economy could possibly agree to such a scheme - it eliminates a less-developed economy's ability to compete for investment against established incumbents by offering tax incentives - I think this ends up translating to unacceptable protectionism for any non-economically-dominant country looking to attract investment and compete in the global marketplace. There'd never be a 'Celtic Tiger' economy under such a scheme.

US States, incidentally, compete for business on a similar basis.

That is actually a good point. I wondered why the US is so adamant about its citizens paying taxes while living abroad. Theoretically - you are not taking advantage of any of the US infrastructure like roads and parks while you're abroad. I kind of think a citizen living abroad should be taxed, but much less (because the cost is not zero - think embassy expenses).

You are only taxed for the difference between your US taxrate and your place of residency's taxrate, this means for many citizens the tax paid to the US is very little or even $0 (but they still have to go through the trouble of filing).

Not true if you make over $95k, or are self-employed

From your link:

3. You are a citizen or resident alien of the US whose physical absence from the US constitutes a minimum of 330 days out of any 365.

When I lived overseas I knew US citizens counted the number of days they spent visiting family to make sure they stayed under 30 days each year.

Instead of asking that question, lets invert it: Why shouldn't US citizens living abroad be exempt on worldwide income just as corporations are?

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