Accessibility links

Breaking News

United States: Foreign-Owned Companies Pay Their Taxes

Washington, 21 November 1996 (RFE/RL) - In almost every country, people begin to feel at one time or another that foreign-owned companies somehow avoid paying their share of the taxes. So the international economic consulting firm, Barents Group, has done a study of American subsidiaries of foreign companies and found that they paid a record $8.2 billion in federal taxes in 1993, a 15 percent increase over the previous year.

The study, conducted for the Organization for International Investment, was compiled from the latest available data from the U.S. federal tax collection agency, the Internal Revenue Service (IRS). It shows that foreign-owned subsidiaries make a major contribution to the economy of the host country.

Managing Director of the Barents Group, Linden Smith, told reporters in Washington Wednesday that the figures show that U.S. firms owned at least 50 percent by foreign owners saw their pre-tax net income nearly double in 1993 to $11.2 billion and their total assets grow by 11 percent to $2.1 trillion in that year.

The Barents group does economic policy and taxation design consulting work for a number of governments around the world, including Russia, Poland, Hungary, the Czech Republic, Bulgaria, Kazakhstan and China.

New York Super-Developer Trump Looking At Moscow

Donald Trump made thousands of millions of dollars and gained a movie-star-like personal fame in the United States with his real estate developments that in many ways changed the skyline of New York City.

Now Trump, whose interests range from gambling casinos to skyscrapers to historic American mansions, is taking a look at the newest emerging real estate market -- Moscow.

Trump was in the Russian capital city a couple of weeks ago, saying he was looking at "building a super-luxury residential tower which I think Moscow desperately wants and needs."

The "Moscow Times" quoted Trump as saying he picked Moscow because "it is really a city with a great future, great potential."

Trump hasn't said if he found what he was looking for. The "London Financial Times" observed that this would be the American tycoon's first foreign venture and that he could expect "a rough ride in the wild East -- where contract killings have become an almost routine means of settling commercial disputes and the country's highest officials are constantly becoming the subjects of fresh corruption scandals."

Trump has never been known to be put off by newspaper stories.

Young Entrepreneur Scared Off From Russian Capital

Todd Ruelle, a young American entrepreneur who overcame years of bureaucratic opposition to launch a fleet of non-polluting natural gas-powered taxicabs in Washington, D.C. had high hopes of putting a similar fleet onto the streets of Moscow.

But after a recent visit to Russia as part of a delegation of Washington small business owners, Ruelle says he is backing away from the idea after learning that the cost of pay-offs and corruption in Moscow is high.

"Twenty percent of your money has to be set aside for security and if you don't provide it, the Russian mafia will provide it for you," he said.

Ruelle told the "Washington Post": "It's going to be tough as a businessman to make any type of investment in Russia without a civil law partnership that you can trust because of the corruption factor."

Another member of the delegation was a bit more upbeat. Marylou Foley, who runs a tour service specializing in travel to Russia, says she found "entrepreneurship is alive and thriving in Russia." She noted "neighborhood bread stores, small textile factories and a business institute that teaches accounting and business management skills."

Americans Using Credit Cards More, Often Overspending

A consumer group called Bankcard Holders of America says U.S. consumers are using credit cards more often and in more places -- like food markets and movie theaters -- and are being more careless as a result. The Washington, D.C. area-based group says that 53 percent of all credit card users it questioned said they were in debt because of "overspending," while only nine percent blamed their indebtedness on a job loss.

Experts from the American Bankers Association says even more worrying is the fact that the rate of credit card delinquencies -- people whose accounts are at least 30 days late in being paid -- climbed to 3.66 percent this past summer, the highest level since the association began monitoring such data in 1974.

Coupled with the fact that personal bankruptcies in the United States are expected to surpass one million this year, the experts are concerned that too many consumers are getting in over their heads in using easy credit.

But other experts in the field say that the delinquency rate means conversely that more than 96 percent of credit card holders are current on their payments. And the executive director of Bankcard Holders, Ruth Susswein, says the banks which issue the cards are still "raking in record profits," although they are also tightening standards to cut losses.

Larry Shimmerine, a consulting economist for MasterCard International, says the convenience of putting purchases on a credit card and paying only one bill at the end of the month is very appealing to most people. He says improved technology is also lowering the cost of handling these transactions.

But Linda Sherry, the editorial director of Consumer Action, an advocacy group in San Francisco, worries that "it just seems like a really bad idea" to have people going out of their way to charge things like groceries. "Suppose something catastrophic happens," she asks. "Who will pay the credit card bills if you lose your job or fall seriously ill?"

And For The Obscenely Rich, A Catalogue

The really, really rich -- that tiny handful who have so much money they often don't even know how much they have -- don't worry about credit card debts, but may be more concerned about giving gifts that only they can afford.

Just in time for the Christmas shopping season, the 13th annual "Ultimate Gift Guide" is being published by a magazine called the Robb Report. According to "USA Today," the new guide features $79,000 gold and jewel wristwatches that will even keep track of golf scores, $10,000 toy railroad sets, $100,000 customized motorcycles, $325,000 Bentley automobiles, and $500,000 programs to provide yearly shipments of vintage wines.

The most expensive gifts in the catalogue are a 14 passenger jet airplane or a 16-room penthouse atop the Pierre hotel in New York City -- either can be had for about $35 million.

The catalogue doesn't say who is selling that New York Penthouse. Donald Trump doesn't own the Pierre Hotel. He has the Plaza.