I for one look forward to finding out which of the 595 Apple subsidiaries I'll be doing business with moving forward. I guess what I'm saying is that yes, it's possible that some companies will put in the legwork to restructure into a few subsidiaries, but this tax wouldn't have applied to them in the current regime anyways. The biggest ones, on the other hand, are unlikely to do the leg-work.
Either way the plan can be adjusted, as my sibling says, to include the revenue from subsidiaries so let's not be defeatist :)
I think you have it backwards. The biggest companies that are already avoiding taxes can justify the lawyer costs to do it again.
Besides, they typically already have dozens of subsidiaries that are largely invisible to most employees and business partners. This is just adding more reasons to do so.
(Source: have worked on subsidiary taxonomy of large companies before, not for tax purposes, and from the outside there is often little information, at face value, why these subsidiaries exist. Even if you asked them, it wouldn't be hard to come up with legal reasons.)
You know how your bank is required to report any transaction to FinCEN in excess of $10,000 on what's called a CTR, or currency transaction report? Some enterprising criminals decided to break up their deposits into two $5000 transactions to avoid this. So naturally, they made that a crime called structuring [1]. I don't see why it wouldn't be illegal to break up your company into a thousand subsidiaries to evade taxes. My point is, this is solve-able, but we have to make the first move.
> I don't see why it wouldn't be illegal to break up your company into a thousand subsidiaries to evade taxes
It could be illegal, but this isn't the same as comparing a few timestamps. You'd need to dive into WHY the subsidiaries exist to determine that they weren't "legal" structures.
> Even if you asked them, it wouldn't be hard to come up with legal reasons
And as I said, they might be! There are probably many reasons to split up an organization that aren't CURRENTLY worth the effort. But this suddenly makes it worth the effort and they already have the justification.
The details of what these justifications are can be interesting, but are largely specific to each entity. Here is one general example: if you have a business presence in every state, boom, 50 subsidiaries already there. Come up with a few other bogus reasons and you can easily rack up entirely legal subsidiaries that on the surface, seem like intelligent organizational choices.
The front end company would be the same for everyone. They money would get funneled to the 4847373 shell companies on the back end. Then through Bermuda->Netherlands->Ireland a bit, same as usual. If it saves the company $.002, they will do it no matter how large and excessive their profits already are.
> I for one look forward to finding out which of the 595 Apple subsidiaries I'll be doing business with moving forward.
None of them. You'll be doing business with Apple CustomerCare or whatever it's called, and they're going to pay license fees for some logo, software or what have you to those 595 companies. It's how Amazon & Co funnel their money out of Europe without hardly paying any taxes, too.
Either way the plan can be adjusted, as my sibling says, to include the revenue from subsidiaries so let's not be defeatist :)