Friday, March 20, 2009
Tax us please! What's your definition of fair share?
Apparently AIG is running the same scam a lot of other US companies
run in China - they get the government to levy new taxes, they pay
them and use them to offset taxes (offsetting taxes - not income
before tax!) paid in the US. All the while, the new money the foreign
authorities get is plowed into things which can directly or indirectly
benefit the company - like infrastructure, healthcare or employee
housing or training - but don't have to be declared. All while laying
off workers at home.
"United States tax law allows American companies to claim a credit for
any taxes paid to a foreign government. But the I.R.S. denied A.I.G.’s
refund claims in 2008, saying that it had improperly calculated the
credits. The I.R.S. has identified so-called foreign tax-credit
generators as an area of abuse that it is increasingly monitoring."