By John Lawrence
Corporations are relentless about setting up tax avoidance schemes and finding new and improved ways of getting out of paying taxes.
One method is to set up a corporate subsidiary in the Cayman Islands which doesn’t require any taxes to be paid. This works well for collecting royalties on patents because the patents can just be transferred to the subsidiary, and, voila, no taxes need be paid at all. Other companies which do a great deal of selling abroad have money piling up in foreign jurisdictions.
US law requires them to pay taxes on this money when they bring it back into the US. So these companies like Microsoft, Apple and Qualcomm are always lobbying for a “tax holiday”, which would allow them to bring this poor, lonely money home without paying taxes on it. Corporations are people, remember, and money is their Mother’s Milk.