Comments on: Mammy: Dirty Hands... Dirty Face!

Mammy: Dirty Hands... Dirty Face!

Pretty_Generic — Mon, 30 Jun 2003 05:19:52 -0800

Ballpoint pen from Trinidad: US$8,500. Rocket launcher to Israel: US$52. How multinational companies use absurd prices to dodge taxation, worldwide.

By: meanie

meanie — Mon, 30 Jun 2003 05:25:26 -0800

My Introduction to Financial Accounting course (core course for all Business majors at my university) taught us to do exactly this. It's common practice, and from a corporate standpoint, good business.

By: cohappy

cohappy — Mon, 30 Jun 2003 06:04:39 -0800

wow.

By: elpapacito

elpapacito — Mon, 30 Jun 2003 06:10:19 -0800

More details and a Moron's guide to transfer pricing here Socialize costs, privatize profits.

By: Cerebus

Cerebus — Mon, 30 Jun 2003 06:29:25 -0800

And people wonder why I'm anti-corporate.

By: graventy

graventy — Mon, 30 Jun 2003 06:39:03 -0800

Accounting is stupid.

By: Slithy_Tove

Slithy_Tove — Mon, 30 Jun 2003 06:56:46 -0800

Markets treat taxation as damage, and route around it.

By: backOfYourMind

backOfYourMind — Mon, 30 Jun 2003 07:51:50 -0800

From elpapacito's link (my emphasis in all cases)- So by increasing the purely arbitrary transfer price we doubled our after-tax profit, increasing it by 100%. This was done without any change to our procedures, operations or added value, was done by merely changing book entries. So where do these additional profits come from? They arise from tax avoidance. In other words it is possible for a multinational company to minimise its liability for corporation tax by transfer pricing. This is legal until governments legislate to prevent this practice. But note that in the cases we discussed, the tax paid to the host-country government increased, while the tax paid to the home-country government decreased, case by case. In other words, one government's loss is the other government's gain. So one government can be expected to want to legislate against unfair transfer pricing practices, while the other government can be expected to object to, and to resist, such legislation. So, (and keen observers of my work will notice that I've made a similar argument before), every nation in the world is eventually drawn into a taxation limbo dance. I am a firm believer in the notion that there is no civilization without taxation, so this is exactly the kind of thing that gives me a bit of shit on the liver. I am also well aware that shareholders profit from this practice etc. However - what pains me is that corporations (and individuals for that matter) behave as if they had developed and prospered in a vacuum. They feel no obligation to help sustain the social stability and prosperity from which they benefit, despite the fact that their success is in large part attributable to those same social circumstances. If someone can explain how this is a tenable attitude in the long-term (even from a purely business perspective), I'm all ears.

By: Cerebus

Cerebus — Mon, 30 Jun 2003 08:12:59 -0800

Unfettered Capitalism Soils Own Nest: Film at 11.

By: Vidiot

Vidiot — Mon, 30 Jun 2003 09:15:58 -0800

Actually, Cerebus, that film won't be airing anytime soon. First it got rejected from Big Corporate Media-owned stations, then PBS funding got cut. So unless you happened to go to school with the filmmaker, you're out of luck.

By: Cerebus

Cerebus — Mon, 30 Jun 2003 09:40:42 -0800

I am aware of the irony(ies) in the statement. 8)

By: five fresh fish

five fresh fish — Mon, 30 Jun 2003 10:06:49 -0800

this is exactly the kind of thing that gives me a bit of shit on the liver What does that phrase mean? I completely don't understand it.