U.S. #Companies Stashing $2.1 Trillion Overseas 2Avoid Taxes

this is Capitalism &they  bring any country 2its knees
there is no #democracy when they #consume all you do







March 4, 2015
 

Shenyang opens its first Apple Store on Feb. 28, 2015 in Shenyang, China.
Photograph: ChinaFotoPress via Getty Images
Recommended

The Price of Oil Is About to Blow a Hole in Corporate Accounting

How a 25-Year-Old Sparked Lumber Liquidators’ Stock Plunge
 Texas Governor Greg Abbott
Texas Cities Are Worried Republicans Pushed Tax Cuts Too Far

 Ferrari 488 GTB Coupe Does Turbo-Charged Power Proud
Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.
Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.
The money pileup, reflecting companies’ incentives to park profits in low-tax countries, has drawn the attention of President Barack Obama and U.S. lawmakers, who see a chance to tap the funds for spending programs and to revamp the tax code. That effort is stalled in Washington, and there are few signs that tech companies will bring the profits back to the U.S. until Congress gives them an incentive or a mandate.
“It just makes no sense to repatriate, pay a substantial tax on it,” said Joseph Kennedy, a senior fellow at the Information Technology and Innovation Foundation, a policy-research group whose board of directors includes executives from Microsoft and Oracle Corp. “Computing and IT companies especially have a lot of flexibility in where they declare their profits.”
Apple, Google
Microsoft, Apple and Google each boosted their accumulated foreign profits by more than 20 percent over the year, the largest increases by any of the 34 companies with at least $16 billion outside the U.S. International Business Machines Corp., Cisco Systems Inc., Oracle, Qualcomm Inc. and Hewlett-Packard Co. each added at least $4 billion.
The profits added by the eight technology companies accounted for 45 percent of the net gain in overseas funds among the corporations surveyed. At the same time, firms in some other industries felt enough pressure to meet domestic needs that they chose to take the tax hit by bringing money home.

 Duke Energy Corp., based in Charlotte, North Carolina, took a $373 million tax charge against earnings in February as part of a plan to get access to $2.7 billion in accumulated foreign profits. Stryker Corp., a Kalamazoo, Michigan-based maker of medical devices, is planning to repatriate $2 billion this year.
Apache Corp., a Houston-based oil and gas company, had $17 billion indefinitely reinvested overseas at the end of 2013. Now, it has none.
“The company made the decision to utilize international cash to pay down U.S. debt and grow its North American operations,” Castlen Kennedy, a spokeswoman, said in an e-mail.
GE Leads
General Electric Co. topped the list for the fifth straight year. The company now has $119 billion outside the U.S., an increase of 8 percent from the end of 2013 and a 27 percent gain since 2010.
By contrast, Microsoft has more than tripled its offshore holdings since 2010. Apple, which counts only part of its non-U.S. holdings as indefinitely held offshore, increased that portion to $69.7 billion from $12.3 billion in 2010. Cisco now has $52.7 billion outside the U.S., up 10 percent since 2013.
Microsoft referred back to 2012 Senate testimony by Bill Sample, its vice president for worldwide tax. Sample said then that the Redmond, Washington-based company is “fundamentally a global business” and that U.S. law creates a disincentive for U.S. investment.
Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined an interview request.
Google Needs
Google referred to a December 2013 letter that the Mountain View, California, company sent to the Securities and Exchange Commission. It said Google needs $20 billion to $30 billion for future acquisitions outside the U.S., $12 billion to $14 billion for foreign subsidiaries’ share of developing intellectual property and $2 billion to $4 billion for capital expenditures.
John Chambers, Cisco’s chief executive officer, said on Bloomberg TV on Feb. 20 that his company is investing in India, Israel and France in the absence of U.S. tax law changes.
“I’d prefer to have the vast majority of my employees here,” Chambers said. “And our tax policy is causing me to make decisions that I don’t think is in the interest of our country, or even in our shareholders, long term.”
The Bloomberg analysis covers 304 large U.S.-based companies that are required to report annually how much they hold outside the country in profits, which isn’t the same thing as cash.
Won’t Repatriate
It’s a measure of accumulated profits, including those reinvested in active businesses and factories. The companies say they won’t repatriate these profits, and they haven’t assumed that they will pay future U.S. taxes that would be owed if they did.
“One of the reasons that they’re holding the hoards of cash abroad is they don’t want to pay the repatriation tax when they bring it back,” said Rosanne Altshuler, a Rutgers University economist who studies international taxation.
The analysis starts with corporations in the Standard & Poor’s 500 Index and excludes purely domestic firms, real estate investment trusts and companies with headquarters outside the U.S. It includes each company’s most recent annual report, many of which were filed over the past month.
The companies owe taxes at the full U.S. corporate tax rate of 35 percent on profits they earn around the world. They get tax credits for payments to foreign governments and don’t have to pay the residual U.S. tax until they bring the money home.
Offshore Incentive
Keeping money overseas is particularly easy for technology and pharmaceutical companies whose profits stem from intellectual property that can swiftly be moved.
“It’s very easy to place a patent in another country and accrue the income there,” Altshuler said. “They’re very sensitive to differentials in corporate tax rates.”
Gilead Sciences Inc., for example, reported that it held $15.6 billion outside the U.S. as of Dec. 31, up from $8.6 billion a year earlier. That’s because the intellectual property for the company’s blockbuster drug -- Sovaldi -- was in Ireland before the Food and Drug Administration approved it in 2013.
Corporations that rely on intellectual property -- trademarks, logos or patents -- have an advantage over heavy industrial companies and the financial industry, which relies on providing services to customers, said Jennifer Blouin, an associate professor of accounting at the University of Pennsylvania’s Wharton School.
“You can’t move an oil rig out of certain jurisdictions,” she said. “You can’t shift the service income without moving the people.”
Shareholder Obligation
Companies have a duty to their shareholders and they’re responding logically to the incentives in the system, Kennedy said. “Companies are strongly driven by the need to increase shareholder value, and especially any public company has to meet market expectations,” he said.
Whatever the reasons, the potential tax revenue from offshore profits is tempting to U.S. lawmakers, who have been struggling to fund road projects and revamp the tax system.
Obama and top Republicans on the tax-writing committees say they won’t repeat a 2004 law that gave companies a voluntary repatriation holiday with a 5.25 percent tax rate.
Instead, Obama earlier this year proposed applying a 14 percent mandatory tax on the stockpiled profits and a 19 percent minimum tax on foreign earnings going forward.
The one-time tax would generate $268 billion over six years, which Obama wants to use for infrastructure.
Because the one-time transition tax is levied on past earnings, it doesn’t distort companies’ decisions, Altshuler said. The real questions are the rate and the details of the tax system for future earnings.
Obama’s plan hasn’t advanced in Congress, amid Republican objections to some of the details and the idea of using one-time money for needs such as highway construction.
The president met March 2 with the chief executive officers of Xerox Corp., Micron Technology Inc., Qualcomm, IBM and EMC Corp., which have a combined $114 billion in accumulated offshore profits.
“The president and the executives also discussed a shared desire to work with Congress to enact pro-growth, business tax reform,” the White House said in a statement.
That doesn’t mean it’s going to happen anytime soon.



 For more, read this QuickTake: Tax Inversion
Companies markets offshore profits technology Tech Money Washington Intellectual Property Taxes
The Price of Oil Is About to Blow a Hole in Corporate Accounting
Don't Miss Out — Follow us on:  Facebook   Twitter   Instagram   Youtube
by Asjylyn Loder
12:00 AM WET
March 4, 2015
 

An oil well in the Permian Basin on Feb. 5, 2015 in Garden City, Texas. (Photo by Spencer Platt/Getty Images)
Photographer: Spencer Platt/Getty Images
(Bloomberg) -- There’s one place in the world where oil is still $95 a barrel.
On paper.
The U.S. Securities and Exchange Commission requires drillers to calculate the value of their oil reserves every year using average prices from the first trading days in each of the previous 12 months. Because oil didn’t start its freefall to about $45 till after the OPEC meeting in late November, companies in their latest regulatory filings used $95 a barrel to figure out how much oil they could profitably produce and what it’s worth. Of the 12 days that went into the fourth-quarter average, crude was above $90 a barrel on 10 of them.
So Continental Resources Inc., led by billionaire Harold Hamm, reported last month that the present value of its oil and gas operations increased 13 percent last year to $22.8 billion. For Devon Energy Corp., a pioneer of hydraulic fracturing, it jumped 31 percent to $27.9 billion.
This year tells a different story. The average price on the first trading days of January, February and March was $51.28 a barrel. That means a lot of pain -- and writedowns -- are in store when drillers’ first-quarter numbers are announced in April and May.
“It has postponed the reckoning,” said Julie Hilt Hannink, head of energy research at New York-based CFRA, an accounting adviser.
Cash Flow
Companies use the first-trading-day-of-every-month calculation to estimate future cash flow and to tally how much crude can be profitably pumped out of the ground. The SEC introduced the formula in 2009 as part of wider changes in how the regulator required drillers to report reserves. Prior to the shift, the value of the reserves was measured based on the oil price on the last day of the year, which also caused distortions.
There are no current plans to revisit or modify SEC reporting rules, Erin Stattel, an SEC spokeswoman, said in an e-mail. She declined to comment further.
Most shale drillers are reporting increases in what’s known as proved reserves. The SEC requires oil producers to submit an annual tally, along with an estimate of the present value of the future cash flow from those properties. The estimates are limited to what the firm is reasonably certain it can extract from existing wells and prospects scheduled to be drilled within five years. The reports are based on factors such as geology, engineering, historical production -- and price. To count as proved, the resources must be economic to develop given existing market conditions.
“What the SEC requires isn’t thorough enough to get to the numbers investors really want,” said Mike Kelly, an analyst with Global Hunter Securities in Houston. “What is the true cost of producing a barrel of oil? And what is the real value of the assets?”
A similar pricing formula helps determine whether some companies need to write off their oil and gas properties.
Market Value
West Texas Intermediate for April delivery fell 31 cents to $50.21 a barrel on the New York Mercantile Exchange at 12:30 p.m. local time. Brent dropped 52 cents to $60.50.
Continental provides one example of how much the price move matters. The company’s Feb. 3 press release announcing the $22.8 billion figure included a disclaimer saying the estimate didn’t represent market value.
Three weeks later, Continental published more detail in its annual financial report to the SEC. Using current prices instead of the SEC-prescribed $95 a barrel would erase $13.8 billion, or 61 percent, from the value of Continental’s oil and natural gas properties. It would also mean that 10 percent of the company’s reserves, the equivalent of 135 million barrels, would be too expensive to pump with prices where they are, the company said in the filing.
SEC Rules
“Continental just follows the rules like everyone else that are mandated by the SEC” and provided additional details to investors in its filing, John Kilgallon, the company’s vice president of investor relations, said in an interview.
Continental shares have risen almost 14 percent this year. Devon’s stock is little changed. That compares with the Bloomberg Intelligence North America Independent Exploration & Production Index, which has risen more than 2 percent since the beginning of 2015.
The drillers in the index will lose an estimated 89 cents per share in the first quarter of 2015, according to data compiled by Bloomberg Intelligence. The companies gained $1.13 in the first quarter of 2014 and 26 cents in the three months ended Dec. 31, the data show.
Devon follows SEC regulations and provides updates “in the course of regular disclosures under SEC rules,” Tim Hartley, a company spokesman, said in an e-mail.
The company’s Feb. 17 press release said that its proved oil reserves rose “to the highest level in company history.” Three days later, in its SEC filing, the Oklahoma City-based driller said it expects to take writedowns “beginning with the first quarter of 2015.” The company didn’t offer details except to say that it doesn’t expect the amounts to have an impact on cash flow or liquidity. However, they will be material to its net earnings.
To contact the reporter on this story: Asjylyn Loder in New York at aloder@bloomberg.net
To contact the editors responsible for this story: Bob Ivry at bivry@bloomberg.net Dan Stets

In a dictatorship every one is presumed full of sin aka guilty

In a dictatorship every one is presumed full of sin aka guilty, there fore you have no legal rights that can protect you from a ruling elite.  
In a democracy you and your child are apart of the ruling elite not isolated from each other


20 February 2015 Last updated at 14:32 Share this pageEmailPrint 6.5K ShareFacebookTwitter US and UK accused of hacking Sim card firm to steal codes Sim card The stolen encryption keys allowed agencies to decode data that passes between mobile phones and cell towers Continue reading the main story Related Stories Millions of phones 'at risk of hack' Snowden: I was a high-tech US spy Cyber thieves profit via mobile malware US and British intelligence agencies hacked into a major manufacturer of Sim cards in order to steal codes that facilitate eavesdropping on mobiles, a US news website says. The Intercept says the revelations came from US intelligence contractor turned whistleblower Edward Snowden. The Dutch company allegedly targeted - Gemalto - says it is taking the allegations "very seriously". It operates in 85 countries and has more than 40 manufacturing facilities. The Intercept says that "the great Sim heist" gave US and British surveillance agencies "the potential to secretly monitor a large portion of the world's cellular communications, including both voice and data". It says that among the clients of the Netherlands-based company are AT&T, T-Mobile, Verizon, Sprint and "some 450 wireless network providers around the world". Full investigation The Intercept alleges that the hack organised by Britain's GCHQ and the US National Security Agency (NSA) began in 2010, and was organised by operatives in the "Mobile Handset Exploitation Team". Neither agency has commented directly on the allegations. However GCHQ reiterated that all its activities were "carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate". Mobile phone users in the Philippines (January 2015) Experts say that the alleged hack is a major compromise of worldwide mobile phone security line break How does the hack work? Each Sim card has an individual encryption key, installed by the chip manufacturer, that secures communications between the handset in which it inserted and mobile phone masts. This means that if anyone were to snoop on conversations or text messages, they would receive garbled, unintelligible data. That is, of course, unless those carrying out the surveillance get hold of the encryption key. With that information, they can even decrypt previously intercepted communications. However, this tactic only works for phone conversations and text messages. Communications through mobile applications such as Whatsapp, iMessage and many email services have separate encryption systems. line break The stolen encryption allowed the agencies to decode data that passes between mobile phones and cell towers. They were able to decrypt calls, texts or emails intercepted out of the air. A Gemalto spokeswoman said the company was unable to verify whether there had indeed been a breach, and highlighted that other Sim manufacturers could also have been targeted. She added: "We take this publication very seriously and will devote all resources necessary to fully investigate and understand the scope of such highly sophisticated techniques to try to obtain Sim card data". Global ripples Reacting to The Intercept's revelations, Eric King, deputy director of the campaign group Privacy International, said the NSA and GCHQ had "lost sight of what the rule of law means and how to weigh what is necessary and proportionate". He said trust in the security of our communications systems is "essential for our society and for businesses to operate with confidence". And the impact of these latest revelations will have "ripples all over the world." Passport Gemalto also manufactures ID chips for passports, among other technologies Privacy International is currently engaged in legal action against GCHQ over its alleged hacking practices. Gemalto makes Sim cards for mobile phones and furnishes service providers with encryption codes to keep the data on each phone private. The Intercept claims that by first cyber-stalking employees at Gemalto and then penetrating their emails, the spy agencies were able to steal thousands of encryption keys at source. This would allow them to eavesdrop easily on phone calls and texts without seeking permission from telecoms companies or foreign governments, and without leaving a trace. The Intercept cites as its source documents leaked by Edward Snowden, the former NSA contractor who is currently living in Russia. 'Weakest link' Karsten Nohl, a security researcher who has exposed previous Sim card vulnerabilities, told the BBC the leak showed that "it is still not terribly difficult" to circumvent encryptions on mobile phone communications. He added that since it was Gemalto, and not the mobile providers, which sets Sim encryption codes, this makes the Dutch firm the "weakest link of the security chain". Other Gemalto clients, such as passport agencies, buy blank chips and set the codes themselves. "A lot of telecom companies will be scrambling to find out what went wrong," said Mr Nohl. line break Analysis: Joe Miller, BBC technology reporter Lock If The Intercept's report is to be believed, the most striking discovery is how easily those wanting to engage in mass surveillance can eavesdrop on our mobile communications. Gemalto, the company which was allegedly targeted, manufactures an estimated 30% of all Sim cards worldwide. And crucially, it creates the security key for each item. All security agencies needed to do was obtain (by hacking, allegedly) the list of security keys from the firm. Then, as security expert Karsten Nohl says, they could snoop on phone calls with a "few hundred dollars worth of radio equipment in strategically important locations". This contrasts with security procedures used, for example, for chips in passports. Many are are also manufactured by Gemalto. These are delivered to the relevant authorities as a blank chip, and the Passport Office - not the company - creates the security key. Many of Edward Snowden's allegations have shone a light on complex surveillance tactics by the NSA. But perhaps this latest leak has done more to highlight how a single company is in control of millions of people's private data.

your vote is worthless unless it has money behind it ..this is not a democracy

Smoking

MPs courted by tobacco firms criticise move towards plain packaging

Six of the 15 MPs who have registered a financial interest related to a tobacco company have spoken out against proposal

Cigarettes on display

 Cigarettes on display at an off-licence. Photograph: Dan Kitwood/Getty Images

Matthew Weaver and Caelainn Barr

Thursday 22 January 2015 18.02 GMT

Share on Facebook Share on Twitter Share via Email Share on LinkedIn Share on Google+

More than a third of the MPs who have registered a financial interest related to a tobacco company have spoken out against a proposal to bring forward a law on plain cigarette packaging since it was announced on Wednesday.

In a surprise move, the health minister Jane Ellison said the government would give MPs a vote on the proposed law before May, and before the end of a consultation exercise.

Since then six of the 15 MPs who have declared “gifts, benefits and hospitality” related to a tobacco company in the current register of MPs’ interests (pdf) have criticised the plan.

All six were given a £1,404 trip to the Chelsea flower show that included a day pass and lunch for themselves and their spouses paid for by Japan Tobacco International, whose cigarette brands include Winston, Camel, Benson & Hedges and Silk Cut.

Five were Conservatives: Gerald Howarth, Angela Watkinson, Christopher Chope, Simon Hart and Glyn Davies. The sixth was Labour’s Gerry Sutcliffe.

Howarth condemned plain packaging as an “example of the nanny state”. Speaking in parliament, he said Australia’s experience since it had introduced plain packaging suggested more cigarettes would be sold on the black market.

“At present 13% of packs sold are illicit, denying the Treasury £3bn. If the Australian experience is anything to go by, that number is likely to rocket,” he said.

Watkinson told parliament that the public were already “constantly” warned about the health risks of smoking.

Chope asked Ellison: “What evidence is there that young people do not access illegal drugs as much because they are sold in plain packages?”

Hart said: “The minister will be aware that it is already an offence to smoke in public under the age of 16 and to purchase tobacco under the age of 18. Would it be a good start to ensure that the current laws work before we start imposing new ones?”

Davies did not speak in the debate but tweeted: “Hate banning things. Govt disease. Began eating beef again during BSE scare. Will have to consider smoking again after giving up 40 yrs ago.”

Labour’s Sutfcliffe said: “I do not want to see young people smoking, but I have concerns about standardised packaging, for two reasons. One is illicit trade, and I will give evidence on that and perhaps meet the minister and her colleagues about that illicit trade and its impact on our constituencies.”

Sutcliffe’s Labour colleague Simon Danczuk, who was also given a trip to Chelsea flower show by JTI, did not speak in the debate. But in September 2014 he spoke out against plain packaging in a interview for Better Retailing.