Phantom FDI - Companies Aren't Investing, They're Hiding Money

-edited

Economists Brad Setser, John Hussman, and Paul Krugman discuss tax avoidance disguised as corporate investments.

Phantom FDI

Profit Shifting

Low Tax Countries

Mind You, This Takes a Hell of a Lot of Work

But Stunning Results

Fizzle

Mish Asks Where's Da Money?

Hussman Reply

Proposal

It would be a hell of a lot simpler to slash the US corporate tax rate to 10% with no loopholes and put a minimum tax rate of 12% on FDI and profits held overseas.

100% of that money "held" overseas would return in about 15 seconds because it really isn't there in the first place as Hussman explained some time ago.

Hussman's only mistake was failure to come up with a catchy phrase like "Phantom FDI".

Mike "Mish" Shedlock

Comments (11)
No. 1-8
Country Bob
Country Bob

I enjoy reading Mish's blog, but these three quasi guests aren't qualified to clean my kiddie pool.

Setser teaches economics in California.... Berkley to be more specific. A place dedicated to stamping out capitalism and censoring anyone who disagrees with the cult's teachings.

You lost me at Paul Krugman. Academic, political hack. Zero real world experience. Rubbish.

He got kicked out of Princeton for advertising fraud -- he was one of the many people "advertised" to be teaching at Princeton, when in fact he didn't teach a single course. Not one, for years and years. He wrote a complaint op-ed column for the NY Times while drawing a paycheck from Princeton.

Oh, and he wrote some left wing clap trap for the socialist government of sweden -- that was the basis of the memorial prize from socialists for distorting economics.

Casual_Observer
Casual_Observer

Why would any company be legally liable on taxes overseas ?

Sechel
Sechel

The tax plan was supposed to be reduce the rate and get rid of the loop-holes(credits and deductions). They did the former but not the latter. This result was so predictable.

Sechel
Sechel

Theoretically it should not be that easy. The IRS is supposed to review transfer pricing to ensure assets and entities are properly valued to limit fraudulent transactions. Perhaps the IRS is outgunned, but they do take this seriously

Tony Bennett
Tony Bennett

"It would be a hell of a lot simpler to slash the US corporate tax rate to 10% with no loopholes and put a minimum tax rate of 12% on FDI and profits held overseas."

...

Agree, but it will NEVER happen.

Accounting one of the BIG lobby groups. You would have a million (very well paid) accountant march on DC to protect byzantine tax code.

Many corporations pay less than advertised tax rate. Legislation (often written by lobbyists) protect certain companies / industries at the expense of others. Congress shakes down these beneficiaries to fill their campaign coffers. No loopholes takes away the grease. Will not happen.