[solidsnack9000]

The problem here is not how the US taxes corporations, but rather that there are different corporations involved. A regular citizen can not establish an additional, foreign citizen that "owns" them or "supplies" them with IP (or labor hours, &c) -- this kind of tax management accounting is not possible for citizens.

[oarsinsync]

They're not different unrelated corporations, they're subsidiaries of a parent that is ultimately a US entity.

The citizen has literally upped and moved themselves entirely to a foreign country.

The corporation has just forked a bit of itself elsewhere.

And yet the corporation can't be taxed, but the individual can.

[solidsnack9000]

It's not just forking "...a bit of itself elsewhere..." -- corporations in different jurisdictions are taxed differently. That's the whole thing.

The relationship between companies can be a complex matter. Do they have to be wholly owned subsidiaries, really?

[AnthonyMouse]

You still haven't answered the question: What are you going to do when Apple or Google becomes "subsidiaries of a parent that is ultimately not a US entity"? What about your proposal prevents them from registering the parent company somewhere else while changing nothing else about their operations? Making them file different paperwork doesn't accomplish anything.

[bdangubic]

would in this case help to treat Apple and Google as foreign company? No government contracts (or super strict rules to get them), tariffs…?

[solidsnack9000]

Well, it doesn't make sense to treat a local branch of a foreign company like a foreign company for tariff reasons -- one role of tariffs is to encourage local branches.

For example, Toyota builds cars in the USA; and rigorously controls how Toyota USA builds cars in the USA. That's actually kind of the point -- from an industrial policy standpoint, it is valuable and useful if companies bring their technology and approaches here and administer them with their knowhow.

Regarding government contracts, it could probably come down to some percentage of ownership or the way control is administered; but many defense companies are publicly traded and that means they can be owned in part by foreign entities (people or corporations).

[AnthonyMouse]

> No government contracts (or super strict rules to get them)

Now you've created a disadvantage for corporations to bid on government contracts, reducing competition and causing the government to pay more for stuff. Meanwhile the companies that actually bid are then the ones that specialize in lobbying the government and register locally and other corporations still register elsewhere.

> tariffs

If you were going to use that you could just as easily use VAT to begin with.

[bdangubic]

foreign-owned companies already are at disadvantage (rightfully so) getting gov contracts. so if you gonna try to evade paying taxes claiming you are based in Burma the government should treat you accordingly. given that there is no bigger customer than US government the companies might re-think their Burmese HQ?

[AnthonyMouse]

> given that there is no bigger customer than US government the companies might re-think their Burmese HQ?

Only if the percentage of their business represented by US government contracts is more than the US corporate tax rate, i.e. only for companies like Lockheed whose business is focused on government contracts. But those are some of the largest "domestic companies" being put at a disadvantage by the existing tax system because they already can't use the same international tax avoidance strategies as other companies when they're required to use domestic supply chains by those same government contracts.

Meanwhile the companies that do lower percentages of their business with the government would just stop doing business with the government at all, causing the government to pay more for things because that company would otherwise have been the one to get the contract by being the one to offer the government the best price.