[HN Gopher] Pharma firms stash profits in Europe's tax havens
___________________________________________________________________
Pharma firms stash profits in Europe's tax havens
Author : obscurette
Score : 150 points
Date : 2024-07-01 18:29 UTC (4 hours ago)
(HTM) web link (www.investigate-europe.eu)
(TXT) w3m dump (www.investigate-europe.eu)
| rqtwteye wrote:
| Obviously this will all go into research.
| Bilal_io wrote:
| Research for a better villa and yacht for the CEO
| pompino wrote:
| >The little-known structures in tax-friendly destinations have
| contributed to the 15 pharmaceutical firms amassing profits of
| EUR580 billion in the last five years.
|
| >This amount outweighs their research and development (R&D)
| costs, despite the industry's frequent claim that high drug
| prices allow them to innovate and design new drugs.
|
| R&D is one thing, but most drugs fail at the clinical trial
| stage. This money (hundreds of millions per drug) is just gone,
| unlike R&D which might result in new tech or at least a patent.
| For Oncology its even worse, its close to a 95% failure rate.
| Simply taxing companies won't make their drugs successful. Large
| pharma companies rely on a few blockbuster products for their
| profits and they milk them dry. This is standard corporate
| greed/behavior, but it certainly seems offputting because we're
| dealing with peoples lives. Personally, I think its inevitable
| that there is going to be some form of nationalization for a
| protected class of life-saving medication.
|
| https://www.labiotech.eu/trends-news/clinical-trials-success...
| tomrod wrote:
| I might be mistaken, but don't c-corporations split out R&D
| (money invested back into the company) from profit?
|
| I'll admit I'm not as well read on the day-to-day reporting as
| I'd like to be.
| mikeyouse wrote:
| Profit is what is left over after R&D - they can choose to
| invest those profits into future R&D, or far more frequently,
| just pay out the profits to owners as share buybacks or
| dividends.
| Aerroon wrote:
| > _Personally, I think its inevitable that there is going to be
| some form of nationalization for a protected class of life-
| saving medication._
|
| Wouldn't it make sense for governments to just run their own
| drug manufacturing company? All the drugs from expired parents
| are free game.
| jstanley wrote:
| It might do if they had a chance of running them efficiently.
| alan-hn wrote:
| Yea its a shame that public services get undermined and
| underfunded at every turn
| coretx wrote:
| Patents are a monopoly. Efficient resource allocation is
| therefore impossible.
| toast0 wrote:
| You could concentrate on patent expired drugs that cost
| the most on an annual usage basis. Yeah, that leaves out
| the newest meds, but you'd still make a dent, and every
| year, you get cooler stuff to make that's already been
| market tested.
| coretx wrote:
| No, because patients deserve the best or most effective
| drug, not the cheapest. Unless you'd like to put a price
| on human life that is. Also, meds don't hit the market
| before they are tested... Testing meds is part of the
| resource allocation problems because cheap & effective
| off-label use won't be researched & tested because there
| is not enough money to be made...
| alan-hn wrote:
| Tell that to the insurance companies that keep denying my
| meds
| coretx wrote:
| Migrate...
| kwhitefoot wrote:
| > Unless you'd like to put a price on human life that is.
|
| If you have some magical formula that would avoid doing
| I'm sure that NICE would love to hear from you.
|
| https://www.nice.org.uk/
| Aerroon wrote:
| The best or most effective isn't always in consideration.
| At least outside of the US, you get what has been
| approved for care and only if it's not too cost
| prohibitive.
|
| If governments were making their own generic drugs and
| sold them at cost then it would help avoid situations
| like Martin Shkreli. The drug wasn't protected by a
| patent, it's just that nobody else produced that drug. In
| my opinion this seems like a reasonable thing for
| governments to do.
|
| Also, the best treatments aren't always available in this
| first place. Eg (at least a few years ago, don't know
| today) Adderall was illegal as a treatment here. Some EU
| countries, until recently, even treated methylphenidate
| like that.
| jajko wrote:
| I'd say non-optimized government corporation running on cca
| 0 profit churning out safe generics is still a massive good
| for all mankind, its type of inefficiency we can all
| somehow live with, compared to usual governmental fubars
| left and right.
|
| Triple that in places like US (not for fubars but the
| costs).
| coretx wrote:
| The WTO/TRIPS treaty already allows for governments to issue
| compulsory licenses in case of a national emergency. This
| also explains why some firms where so "nice" during the
| pandemic, as they feared it. See https://www.wto.org/english/
| tratop_e/trips_e/public_health_f... for details. Obviously,
| it does not suffice but at least it's something.
| brobdingnag_pp wrote:
| And now it would be a political issue _which_ drugs get
| manufactured for cheap and for whom. You can probably see how
| that would go in corrupted countries (i.e. all of them)
| Aerroon wrote:
| Maybe you could set in place criteria based on how much the
| drugs are used and how many competing manufacturers there
| are and go based on that.
| jorams wrote:
| > R&D is one thing, but most drugs fail at the clinical trial
| stage. This money (hundreds of millions per drug) is just gone,
| unlike R&D which might result in new tech or at least a patent.
|
| Are you saying the clinical trial stage is somehow not part of
| R&D spending? It sounds like quite obviously research to me,
| but I'm not familiar with how it's actually reported.
| lawlessone wrote:
| >This money (hundreds of millions per drug) is just gone,
|
| Is it completely wasted? we learn something doesn't work. It's
| not fantastic like it would be to find drugs that cure things ,
| but we still learn.
| pompino wrote:
| The industry may learn from failures, but the shareholders of
| private companies want a return on their investment. I sure
| as heck don't want my 401k tied to oncology.
| lokar wrote:
| Much of the early development of novel new treatments is funded
| by venture capital and early IPOs. The big players buy them out
| when most of the risk is gone and it's time to scale up.
| jampekka wrote:
| This is what "competitive" or "business friendly" tax policies
| look like. Sometimes also known as race to the bottom.
| eastbound wrote:
| As it costs almost nothing for the country to host a
| multinational company, there is no pushback on the minimum
| corporate tax.
|
| The question is, why do the countries tax something that
| doesn't cost them anything to host.
| exabrial wrote:
| I'm not really upset about this for a few reasons:
|
| * Taxes are excessive and out of control in the US
|
| * Most taxes just end up in lawmaker's buddy's pockets
|
| * Programs in the US get created, and never garbage collected
|
| * Literally every business is doing this
|
| Really the only thing that upsets me is that these tax havens
| aren't accessible to common people like me, as I'm not blood or
| marriage related to a US Senator or Congressional Rep.
| consp wrote:
| I live in one and it is useless to me as well so don't be too
| sad.
| toomuchtodo wrote:
| Taxes in the US are at historic lows. The emotional appeal is
| not compelling wrt tax evasion.
|
| Edit: https://www.concordcoalition.org/wp-
| content/uploads/2024/03/...
| coldtea wrote:
| > _Taxes in the US are at historic lows_
|
| Given that the income tax didn't exist in the US before 1861,
| and even when it was introduced it was 3%, and in 1913 the
| highest bracket was 7% (on income over $11 million in
| todays's money) and the lowest was 1%, I seriously doubt
| that.
| mandarax8 wrote:
| And income tax was even lower in 10'000BC !!
|
| https://www.taxpolicycenter.org/briefing-book/how-do-
| federal...
|
| For our contemporary age, they are at an all time low.
| coldtea wrote:
| I'm not sure you understand what "historic lows" means
| kwhitefoot wrote:
| Enlighten him, and us then.
| chgs wrote:
| Historic as in since ww2. He US is a young country but it
| that young. Before the 1930s total tax take was under 10% of
| gdp
| s1artibartfast wrote:
| This is an ahistorical take. Looking only at a handful of tax
| rates and not tax policy is incredibly misleading.
|
| Tax as a percent of the economy has gone through the roof,
| both as a percent of GDP, and as inflation adjusted dollars.
| If you compare to a benchmark like the 1940s, tax% of GDP has
| more than doubled[1], and GDP has increased ~4.5x[2]. This
| means someone today pays about 10X the taxes (controlling for
| for inflation!). State and local taxes have grown even faster
| than federal taxes.[3]
|
| Put another way. Taxes/Real GDP has gone from 2% o
|
| Federal tax/GDP: https://fred.stlouisfed.org/graph/?g=ockN
|
| Real GDP: https://fred.stlouisfed.org/series/A939RX0Q048SBEA
|
| State +local/Real
| GDP:https://fred.stlouisfed.org/series/W070RC1Q027SBEA#0
| gamblor956 wrote:
| Your first chart actually shows that federal tax as a % of
| GDP has remained essentially unchanged since the 1940s,
| _despite_ the significant changes in tax rates since then.
| What has changed in the amount of spending as a % of GDP.
| s1artibartfast wrote:
| Depends on where you cut the comparison.
|
| In 1930 they were 4.4% of GDP
|
| In 1940 they were 6.3% of GDP
|
| In 2023 they were 16.2% of GDP.
|
| Federal spending has indeed Grown faster than receipts,
| but I dont want to muddy the water with debt spending and
| inflationary effects, and dont have to because Taxes per
| GDP is fractional and accounts for inflation.
|
| The main point I want to drive home is the change in
| total tax amount, controlling for inflation. People tend
| to focus on percent tax burden and over look the total
| tax payment in inflation adjusted real dollars.
| gamblor956 wrote:
| While effective tax rates are lower than historic averages
| (measured since the time the federal income tax was
| reintroduced in 1913), they are not at "historic lows" as the
| lowest statutory and effective tax rates were the 1913 rates,
| when approximately 97% of the U.S. taxable population was not
| subject to income tax, and the lowest statutory/effective
| rate was 1% on those earning $3000/year or more ($95k in 2024
| dollars).
| Zooti wrote:
| Id love the sources on our taxes just going to fill a
| politicians buddy. Id also love this source showing that
| corporations and pharmaceutical companies taxes are both
| excessive and out of control.
| blactuary wrote:
| Every bit of this is absolute nonsense
| settsu wrote:
| If you're going to make a comment like this, in a place like
| HN, you gotta bring the receipts, my dude. I.e., citations or
| GTFO.
| jancsika wrote:
| > * Programs in the US get created, and never garbage collected
|
| That is demonstrably false.
|
| In fact garbage collection is so common I'd bet I can just
| stand here and do nothing for 5 minutes until my brain finds an
| intersection with my own circumstances...
|
| Found it...
|
| Look up the used PHEV federal tax credit. While you're at it,
| look at the tax credit for new electric and PHEV vehicles. That
| one even has a little built-in ramp to decrease the incentive
| over time.
|
| It's as if the government has somehow gained practical
| knowledge and experience over time with various garbage
| collection routines...
| admissionsguy wrote:
| and yet the size of the government as % of GDP has increased
| every decade for over 100 years
| 2OEH8eoCRo0 wrote:
| They don't use the Cayman Islands like everyone else?
| popcalc wrote:
| European private companies do. Even Canadians have it that
| easy. The TCJA and being publicly listed in the States means
| tax-minimization strategies require a lot more creativity.
| melenaboija wrote:
| It is a sad example the one they give, being Irish though makes
| me think a bit deeper.
|
| Citizens from EU not being the Netherlands or Ireland have to
| witness how international big corporations pay taxes in countries
| different to the ones they are doing their business and big local
| companies moving their headquarters to neighbor countries. Which
| benefits their citizens.
| Cthulhu_ wrote:
| > how international big corporations pay taxe
|
| That's the neat part, they don't
| melenaboija wrote:
| They pay some, and the little they pay don't go to where they
| belong.
| atmosx wrote:
| It's way worse. Mediterranean countries have free education
| system that produce engineers, doctors, etc that they can't
| keep, because they can go to the Netherlands or the UK for
| bigger career opportunities and salaries. At a personal level
| is "an amazing opportunity" at a country level it's a vicious
| cycle that increases the gap, a real tragedy.
| chgs wrote:
| Engineers and doctors in the U.K. go to US and Australia
| instead of staying in the shithole of the U.K.
| f1shy wrote:
| From UK go to USA, from south EU to UK, from south America
| to EU, from central America to south America, from Africa
| to central America. The whole circle.
| asdff wrote:
| Theres even a side pipeline out of the US where you don't
| have the grades or mcat for american medical school and
| go to an american expat tailored program in the
| carribean, faring mostly the same as you would have
| anyway after a period of time.
| asdff wrote:
| Then they end up in the hospital systems in the US that the
| domestic talent passes over, after having to repeat their
| residency requirements of course trying to keep up with the
| 80 hour work weeks in residency with fresh out of school
| mds who might have 10+ years of youth on them. Circle of
| life I guess.
| dgfitz wrote:
| Wow. So, the system doesn't work. It's almost as if education
| isn't the "cure" for the "social problems" of 2024 and
| beyond.
|
| Who knew?
| eastbound wrote:
| Well if mediterranean countries were not so business-hostile,
| and by that I mean, not hate on a daily basis the guy who
| works the most, that would surely renew the love for the
| homeland.
|
| It's ok to blame things on the taxes or free college, one
| also has to take a mirror and wonder "Can _I_ change
| something in _my_ attitude?"
| nickpp wrote:
| And Eastern European engineers and doctors go to
| Mediterranean countries for bigger opportunities and
| salaries. Looks like the biggest culprit is the "free
| education", no?
| atmosx wrote:
| > And Eastern European engineers and doctors go to
| Mediterranean countries for bigger opportunities and
| salaries.
|
| No, that doesn't happen.
| willsmith72 wrote:
| i thought there was talk of Ireland finally increasing its
| corporate tax rates. the current situation is insane
| Theodores wrote:
| At any time we could have a change of circumstances and need the
| products of the big pharmaceutical companies for the rest of our
| lives.
|
| I feel morally obligated to keep myself fit and healthy as a
| personal boycott of the pharmaceutical companies. This means
| taking care of nutrition and being physically active. This
| provides no guarantee of not needing their products, however, not
| doing this makes it inevitable that I will need their products.
|
| It is no accident that Western democracies allow companies to
| park their profits in tax havens, tax havens that are typically
| provided security and defence by the likes of Great Britain due
| to former colonial ties. Sanctions should apply to countries that
| have these tax loop holes.
| lotsofpulp wrote:
| > Sanctions should apply to countries that have these tax loop
| holes.
|
| Any country is free to tax any business however much it wants
| within its borders.
|
| If a country's leaders choose to not tax a business, it it is
| up to the voters of the country to change the leaders.
| Havoc wrote:
| >Delaware took the top spot with 700 entities.
|
| Europe is further west than I though
| oblio wrote:
| You mean Europe is about 248 years late, according to this
| article.
| Loic wrote:
| For me, this says everything:
|
| > The structures helped the company [Bristol-Myers Squibb (BMS)]
| reach an effective corporate tax rate of 4.7 per cent, far below
| the US statutory rate of 21 per cent.
| koolba wrote:
| The real answer to all of this is scrap the corporate tax rate
| entirely. It's only 6% of the total revenue the government
| takes in anyway.
|
| The main payers are not these large corporations, it's the
| little guy who can't retain earnings year over year without
| paying that statutory rate. The little guy doesn't have
| offshore entities and transfer pricing. And these little guys
| are 75% of corporate tax receipts!
|
| Scrap the whole thing and this shell game disappears.
| castrodd wrote:
| Your solution to corporations using tax havens is to
| eliminate all corporate taxes?
|
| How does that help?
|
| They only pay 6% now, you are saying, so let's have them pay
| 0%?
| willcipriano wrote:
| Tax the shareholders instead.
|
| At a minimum tax capital gains at the same rate as labor.
| Ideally, don't tax labor at all either, they are taxed
| plenty by inflation.
| whimsicalism wrote:
| i generally think we should tax people, not corporate
| entities. if we want to extract money from corporations,
| probably should just tax capital gains directly.
| eastbound wrote:
| Tax what you want to eliminate. Don't tax labour. Tax
| pollution.
|
| Of course policy changes tend to remain half done, like
| Davos' motto, and we're left with two taxes.
| tikkabhuna wrote:
| So I can park money in a corporate entity and then use it
| to buy everything for me? This seems like an amazing
| loophole. Never extract your cash from a company and you
| never pay tax!
| koolba wrote:
| Spending corporate money on non corporate expenses would
| be fraud. You can't do that regardless of the tax rate.
|
| What this does allow for is carrying over profits from
| year to year for small businesses that operate on a cash
| accounting basis. Which in turn allows multi year
| planning without taking a 22% hit.
|
| Never extracting the profits would lock them away in the
| corporation with no means of spending them. It's
| definitely a possibility, but it's not really an issue
| for public corporations because the shareholders wouldn't
| want a company just sitting on cash.
| delusional wrote:
| > but it's not really an issue for public corporations
| because the shareholders wouldn't want a company just
| sitting on
|
| What if my company just held on to the cash but every
| share had some ownership of that cash. Sure, it probably
| wouldn't trade at par, but it would also be silly for it
| to trade at the payout rate considering it's non taxable.
|
| Could the paper backed by my corporation become a new
| currency?
| s1artibartfast wrote:
| sure, but if you sold any of that paper you would have to
| pay taxes on it.
| renewiltord wrote:
| You can't use a corporation for personal expenses. Like,
| your home can't be owned by the corp. Your child's school
| bills can't be paid by the corp.
| 0cf8612b2e1e wrote:
| No, don't you see, removing those burdensome taxes will
| spur corporate investment and grow the economy. You may
| Laff, but I can draw a curve that shows eliminating
| corporate taxes is the right thing to do. Just don't ask
| Kansas.
| jll29 wrote:
| "Investigate Europe can reveal that the 15 largest European and
| US drugmakers, including BMS, publicly disclose over 1,300
| subsidiaries in tax havens and low-tax territories. These
| jurisdictions offer corporations low taxes or ways to shift
| profits (sometimes both). In Europe, researchers and activists
| generally agree that they include Ireland, the Netherlands,
| Switzerland and Luxembourg."
|
| The nasty secret is called "transfer pricing", which is
| permissible under OECD rules, which permits companies to claim
| their headquarters are whereever they want (so they choose a low
| tax jurisdiction), when everybody knows that their "real
| headquarter" is not there (including their own Website, which
| names an entirely different place as their HQ). One such loophole
| the "Double Dutch-Irish Sandwich" was closed two years ago, but
| plenty of other ways remain.
|
| It is a bit unfair to "Big Pharma" (or Apple) to single them out,
| because lots of other corporations do the same. For example, just
| check the Canton Zug (CH)'s ratio between companies registered
| there (29k?) and people living there (25k?). I have not seen a
| single political party offering in their manifesto to fix this...
| meanwhile large corporates create shell companies owned by other
| shell companies licensing brands to third shell companies while
| receiving loans from fourth parties etc. etc. - typical money
| laundering patterns like organized crime, yet entirely legal at
| the moment.
|
| In my opinion, everyone who is a Director of >50 companies should
| be investigated for fraud to begin with, and rules for
| determining companies' true headquarter should be changed so they
| cannot be freely chosen "only for tax purposes".
| doikor wrote:
| There is some interest in trying to fix this. Mainly with a
| global minimum corporate tax rate in the OECD as this can't
| really be fixed by individual countries.
|
| https://en.wikipedia.org/wiki/Global_minimum_corporate_tax_r...
|
| Though remains to be seen when it will actually go fully into
| effect and when/if all the various loop holes will be closed.
| kwhitefoot wrote:
| > this can't really be fixed by individual countries.
|
| This can't be fixed by most individual countries but there
| are a few individual countries that could do it. The US could
| easily do it, easily from a technical point of view that is;
| unfortunately it is politically impossible.
| blackeyeblitzar wrote:
| Aren't these just standard practices that basically all
| multinational companies do? I'm not saying it is the right thing,
| but I think it is broader than just pharmaceuticals.
| lotsofpulp wrote:
| It is more clickbait-y when the title alludes to a conspiracy
| by one or a small group of "evil" organizations, instead of a
| title that allude to tax policies implemented by democratically
| elected leaders, which make people's eyes gloss over.
| em500 wrote:
| I quickly went through the 10 largest European/American
| biomedical companies by revenue in Google Finance (Johnson &
| Johnson, Roche, Merck, Pfizer, AbbVie, Bayer, Sanofi,
| AstraZeneca, Novartis, Bristol Meyers). AFAICT the only one that
| beat the SP500 in total returns in the past 5 years was AbbVie.
| Many even trailed short government bonds or savings account
| returns. So for all the _eye-watering gains in tax havens_ the
| owners /shareholders didn't seem have much to show for them.
| MagnumOpus wrote:
| Away from the discussion of the last 5 years being the years of
| LLM and AI boom and those mega caps exposed that hype driving
| the SP500, you didn't list Europe's largest company by market
| cap: Novo Nordisk increased 7 times in value in the last five
| years...
| mikysco wrote:
| Novo's rise is due to the proliferation of its new
| blockbuster weight-loss drug, semaglutide (aka Ozempic)
| em500 wrote:
| Yeah, I didn't do a full blown analysis, just went trough
| wikipedia's top 10 biochemicals by revenue (Novo Nordisk was
| no.14) and picked 5 years since that's the longest 1-click
| option from Google Finance to get a consistent time span.
|
| If you didn't predict Novo Nordisk's hit weight loss drug
| ahead of time, but just held a big portfolio of large
| pharmas, the returns seem pretty disappointing to me. Or put
| differently, if you have a lot of extra money to invest
| today, would you significantly overweight big pharma based on
| what we learned from this article?
| francisofascii wrote:
| What were the total returns?
| gosub100 wrote:
| So it's okay to cheat the system if your business is losing
| money?
| WalterBright wrote:
| As taxes are on profits, if you're losing money you down't
| owe income tax.
| rixed wrote:
| Profits (the money the company makes) are not the same as total
| return (the money one makes by trading that company's stock on
| the second hand market plus the arbitrary value distributed to
| stockholders, usually close to 0), are they?
| arminiusreturns wrote:
| Anybody who is interested in this topic _really needs_ to go see
| this awesome documentary:
|
| The Spider's Web: Britain's Second Empire | The Secret World of
| Finance
|
| https://www.youtube.com/watch?v=np_ylvc8Zj8
|
| It was even done on a 4klb budget!!!
|
| The reality is that the brits realized they could no longer
| maintain hard power and Lionel Curtis was the primary pusher of
| the psyop transition to "commonwealth" soft power while
| maintaining all the real vestiges of empire under a false name.
| ok_dad wrote:
| I'm an American citizen, and no matter where I go, I owe the IRS
| taxes on what I make, even if the USA isn't involved otherwise.
|
| Question: why can't we do the same for corporations in the USA?
| The equivalent action might be to only allow a company to expense
| money spent inside the USA and thus they can't just license
| themselves all their own technology and patents which are held in
| a one person office in Ireland.
|
| I'm sure I'm simplifying things too much, but I'm tired of the
| two tiered tax system where regular people pay for everything and
| corps reap the rewards.
| kick_in_the_dor wrote:
| Counterargument: At the end of the day, the ones reaping
| corporate profits are themselves people, who should be paying
| their income taxes, no?
| exe34 wrote:
| and do they? if your money is in a tax haven, you don't pay
| income tax there. if your ghost company from the tax haven
| buys a private jet, you don't pay any tax on it. if you then
| rent it from yourself, you can call it a business expense,
| and deduct it from your company's profits. if you get a loan
| from yourself in the tax haven, that's also tax free.
|
| where does the paying income tax come in? rich people are
| always, legally speaking, on the brink of bankruptcy, and
| can't afford to pay tax.
| ffgjgf1 wrote:
| Or you can just move to a country with no/extremely low
| income taxes (well at least if you aren't an US citizen..)
| balderdash wrote:
| As a us citizen that only works if you're willing to risk a
| jail term
| gamblor956 wrote:
| A U.S. corporation that directly does business around the world
| is also subject to tax on its worldwide income.
|
| Most companies big enough to be doing business around the world
| do so through separate companies.
| miohtama wrote:
| Meanwhile Amazon pays 0% tax
| gruez wrote:
| You can probably dodge the taxes too by incorporating a company
| in a tax haven, "working" for that company, and then selling
| your services through that company. The company can pay you a
| minimal wage, which would be taxed, but everything else can be
| stashed in that company tax free.
| DrJokepu wrote:
| That's called a Controlled Foreign Corporation and it won't
| work, because its earnings & profits need to be included on
| the Subpart F income of the shareholders.
|
| Uncle Sam will get his share. Unless you're a large
| corporation, that is.
| akudha wrote:
| Because you didn't hire lobbyists to work on your behalf,
| didn't fund elections etc...
| fifteen1506 wrote:
| Because jobs
| balderdash wrote:
| A. Do you live abroad? Every us citizen I know that lives
| abroad DESPISES their tax treatment so it's the first time I've
| heard someone say that.
|
| B. Corporations are owned by people (perhaps a very disparate
| group of people via pension plans, 401ks, etc) and the tax man
| eventually gets a piece
| bobmcnamara wrote:
| A) Last year's FEIE was 120k. When I was looking at teaching
| English as a second language abroad, US income tax wasn't a
| factor, but I could see it being one doing tech work. The
| annoying part is the paperwork and presence requirements. I
| did meet a couple ESL teachers who did have to worry about it
| in UAE.
|
| B) A smaller piece. I pay no more than 15% on my capital
| gains, I think they're capped at 20%, and I get to write off
| losses. It's wild to me that this is taxed at a lower rate
| than employment.
| bobmcnamara wrote:
| FYI: The FEIE was $120k last year.
| godelski wrote:
| For reference
|
| > If you are a U.S. citizen or a resident alien of the United
| States and you live abroad, you are taxed on your worldwide
| income. However, you may qualify to exclude your foreign
| earnings from income up to an amount that is adjusted
| annually for inflation ($107,600 for 2020, $108,700 for 2021,
| $112,000 for 2022, and $120,000 for 2023). In addition, you
| can exclude or deduct certain foreign housing amounts.
|
| i.e. if you make <$120k in a foreign country, you don't need
| to pay taxes on it (though you will need to declare!).
|
| https://www.irs.gov/individuals/international-
| taxpayers/fore...
|
| And here's info about the housing exclusion part:
| https://www.irs.gov/individuals/international-
| taxpayers/fore...
|
| (I don't think any of this detracts from the OP's main point,
| but if you're an American living and working overseas, I hope
| you aren't paying taxes on all of your income)
| badpun wrote:
| If you allow companies to expense only money spend inside the
| US, you break their international supply chains.
| yieldcrv wrote:
| correction: you have to _report_ your earnings to the IRS, that
| doesnt mean there is anything to pay
|
| corporations are under almost the same tax regime
| ginkgotree wrote:
| A real shocker
| asdff wrote:
| Like every firm in every sector, in other words. Writing this
| from a computer designed in california, built in china, marketed
| by a company incorporated in ireland.
| steveBK123 wrote:
| Pretty sure Mag7 do the same
| jrh3 wrote:
| Why is this article on HN?
| balderdash wrote:
| How about some BMY facts ($usd thousands) Earnings before taxes:
| 2019 FY: 4,975,000 2020 FY:(6,871,000) 2021 FY: 8,098,000 2022
| FY:7,713,000 2023 FY: 8,440,000
|
| Taxes paid: 2019 FY: 1,515,000 2020 FY: 2,124,000 2021 FY:
| 1,084,000 2022 FY: 1,368,000 2023 FY: 400,000
|
| Effective tax rate: 2019 FY: 30.45% 2020 FY:NM 2021 FY: 13.39%
| 2022 FY: 17.74% 2023 FY: 4.74%
|
| Average tax rate paid last five years looks closer to 29% to
| me...
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