[nirvdrum]

As a US citizen you can't declare your income was earned in Ireland and avoid or reduce paying US federal income tax. You can't avoid US federal income tax even if you lived in Ireland and worked for an Irish company for that year.

[s1artibartfast]

You can renounce your citizenship which is essentially the same thing.

[nirvdrum]

You can't just renounce it. It's a quite expensive process. And naturally, once you have, you no longer receive any of the benefits of US citizenship. Whereas the companies in question get to avoid taxes while retaining the benefits of being located in the US.

[s1artibartfast]

>Whereas the companies in question get to avoid taxes while retaining the benefits of being located in the US.

My understanding is that they are treated like any other global company located outside the US that is doing business within the US.

It seems as arbitrary as the US policy of taxing expats living and working in foreign countries just because they were born on US soil.

It is much more practical to tax both individuals and corporations when and where they make their money opposed to where they originated.

Of course to do so would likely require a shift from corporate taxes to more sales and capital gains taxes, which is a good idea in its own right.

[nirvdrum]

They're not doing business with another company in any meaningful sense. There's multiple companies set up with the same owners so they can pretend the one in the lower tax region makes all of the revenue, often through IP licenses that look like expenses to the entity in the higher tax region. It's financial engineering that doesn't reflect where value is actually being created or revenue captured.

I'm not a CPA, but my understanding is as a US citizen, your closest analog would be setting up an irrevocable trust. But, then you no longer have control of those assets. Owners of these shell corporations are able to effectively control their assets. Naturally, if they were legitimately doing business with a 3rd party company, they'd have no say over what that other company can do with their revenue. That's a key difference between what's a normal business operation and what's a shell game for tax avoidance.

[s1artibartfast]

I still don't see how you would separate legitimate use of the law from illegitimate if both cases follow the letter of the law. In the case of the double Irish, it's largely irrelevant because the US law was fixed under Trump, as was the Irish law. Even before, us owners of alphabet had to pay capital gains on any realized tax so there was way for an individual to profit.

I imagine we will have trouble finding common ground given that I think corporate taxation is a bad way to collect revenue to begin with.