And it is a puzzle. I simply do not understand how he can hold violently contradictory views like this:
On the other hand it taxes its companies on a completely perverse territorial basis – so that profit earned outside the US is not taxed until remitted from abroad……..The answer is very obvious: the US needs to reform its basis for determining tax residence for corporations – and tax them on their world wide income.
This is coming from the man who insists that every company should reports its accounts on a country by country basis. So that civil society (ie, Ritchie and his mates in his construction) can check that each company is paying the right amount of tax where they actually do business.
Who promotes this credo:
Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.
Who was in fact promoting that credo yesterday.
Now I can see how you could believe in either of these ideas.
You\’re a US company, you pay US tax on your profits anywhere in the world. You drill for oil in Angola, sell it in Holland and we\’ll have a piece of that, thank you, because you\’re a US company.
Or, I can see that you can argue that the economic substance of this transaction is in Angola or Holland: thus tax should be paid in either Holland or Angola. And that\’s true whether it\’s an Angolan, Dutch, US or Cayman Islands company: we\’ve identified the economic location and thus the taxing jurisdiction.
But I simply cannot see how you can support both ideas. That tax should be paid where the economic substance of the transaction takes place and also that regardless of where that economic substance is, tax should be paid in the US.
The two ideas are entirely contradictory.
Is there some special operation you can have to enable one to argue that black is indeed white except when I find it convenient to call black black?