Microsoft Moving Profits, Not Jobs, Out of the U.S.
The tax practices of the world’s largest software maker made front-page news in 2005. The Wall Street Journal reported that profit shifting into a ‘‘virtually unknown’’ Microsoft Irish holding com- pany ‘‘shielded billions of dollars from U.S. taxa- tion’’ and at the same time allowed the company to ‘‘radically reduce its corporate taxes in much of Europe’’ (Glenn Simpson, ‘‘Irish Subsidiary Lets Microsoft Slash Taxes in U.S. and Europe,’’ Nov. 7, 2005).Unfortunately, today's blogger doesn't have the time to discuss this article, though as with all of Sullivan's articles, it is excellent value. We will merely point out things like the fact that Microsoft's share of income being earned abroad has risen from 38 percent to over 60 percent in the past five years, and that it has $30 billion offshore, generating this weirdness:
Well, that was then. It’s nothing compared with now.
"This is a low point in the history of high finance. Because of tax rules, a company absolutely saturated in excess cash must borrow, while small businesses that actually need the money to create jobs cannot access bank credit."
We would like to add more, but this time you will simply have to read on. (Hat tip: Tax Prof.)