See this link: http://www.reuters.com/article/us-usa-tax-offshore-idUSBREA3729V20140409 Quote: Foreign profits held overseas by U.S. corporations to avoid taxes at home nearly doubled from 2008 to 2013 to top $2.1 trillion, said a private research firm's report, prompting a call for reform by the Senate's top tax law writer. Are any reforms pending? Any views/issues that people have?
Watch this closely and we will see republicans' claims fall flat. They have argued forever that we need to cut taxes on the rich and then we'll see investment in businesses and more jobs. This will be proven, finally, to be the BS fantasy that the left has said it is after the Administration passes tax cuts for businesses from 35% (effective rate 14%) to a new rate of 15%. There will be no commensurate increase in jobs seen and hopefully this will put the final nail in the coffin for the "tax cuts mean jobs" nonsense.
All US businesses with income outside of the USA are paying applicable local corporate taxes. Please explain why a company, like Apple, should pay US corporate taxes on income generated in another nation? And, as long as we have these stupid rules, almost 100% of that cash will remain outside of the USA, will be invested outside of the USA...
The US is one of the few nations on the globe that has not moved to terrritorial taxing, i.e. you only pay taxes on income earned inside the country. If you are a Bolivian corporation you don't pay Bolivian taxes on money you earned in South Korea, even if you bring the money from South Korea into Bolivia. About the only countries that haven't moved to terrotorial taxing is North Korea and Albania. It is the Marxist Democrats that are against moving to territorial taxing - which makes sense seeing the other countries that haven't moved that way.
If were simply a matter of keeping revenues earned in china in china and taxed in china I would agree with you. Most of these companies however aggregate their profits in places not earned anyway, like ireland, where they park their intellectual property in order to receive low taxation.
Great for Ireland competing in the corporate tax arena! There is a corporate tax on income in Ireland...I think it is 12-13%? The key point in my comments is we're talking about taxable income which is not earned on US soil...in which US companies offshore pay the applicable local taxes. And there is no reason why the same company should pay US corporate taxes on top of foreign corporate taxes! The bottom line is our current tax policy is forcing trillion$ to be stored and invested outside of the USA...how can this be positive?
It is positive because it encourages them to invest offshore which raises offshore prosperity which creates offshore markets for onshore products which increases economic velocity which creates jobs which lifts people out of poverty which makes them less likely to want to engage in war. The reason Trump has to increase defense spending is because he is wanting to create more conditions ripe for conflict in other parts of the globe. How's that for an answer?
All good answers. I should think Americans would prefer those profits to be repatriated and invested in jobs in the US. The reason the law hasn't been changed could be the influence US corporations exert on the lawmakers, since the extra tax charge would hit the earnings number and potentially the share price.
That's a good answer (apart from the Trump part which I have no idea about), but are US lawmakers that altruistic?
They would get a deduction for any foreign taxes paid. It would only hit them hard if they had the cash stashed away in low-tax regimes. Your last sentence, exactly right from the viewpoint of US taxpayers.
When ordered to do so by their corporate overlords. Ultimately, capital investments will flow to wherever offers the best returns in investment and that ain't America at the moment.
I think one of the planks in Trump's platform was to encourage repatriation of those funds by eliminating or reducing the onerous tax imposed on bringing in offshore funds. I haven't heard that he has actually done anything towards that end yet.
The investment is limited so it's basically just cash sitting around. US companies won't expand offshore unless their product demands increase. I'm also guessing that most US companies will not invest offshore except in those areas which are already developed or developing. US facilities require labor and materials and infrastructure, stable government, all of which must be in place. Perhaps there is some positive impact to poverty but I doubt it, just as no matter how US corporations do in the US, it seems poverty remains an issue. Trump starting more wars, or greatly increasing military spending, will certainly help US labor and the economy, but IMO it's a short-lived economic boost. Plus, I'm guessing most US companies who produce military goods can take on more work load without more facilities and tons more labor...
No matter the offshore tax deduction IMO income generated outside of the US should not be subject to US taxation...
It's a bit strange that US citizens are taxed on their world-wide income, whether they live in the States or not. Boris Johnson (who's a US citizen - or was, he's trying to lose it) had to pay US tax on a property sale in England. Don't you just love it, since he's a c***. As for your opinion, you're welcome to it, but it would help the US finances.
Funding the US government does not need to be accomplished using stupid tax policy! Have you calculated how much the US economy might be energized, and how much additional federal taxation might be realized, should those trillion$ be allowed back into the USA?
So you don't actually know the economic benefits if we leave the cash offshore, versus bring the cash back and tax it, versus bring the cash back with no additional federal corporate tax? It would be great if someone actually had some facts!
You posted a comment...I responded...and you call this 'trolling'??? Check the dictionary for the definition and perhaps select another word...
The US enacted a "holiday" on repatriation of foreign profits in 2004, lowering the tax rate to 5.25%. Close to $400 million was repatriated. It is estimated that 60% of it went to dividends and share repurchases. A similar result on the $2 plus billion would be very positive for your 401K.
Most of corporate America can borrow million$/billion$ at lower interest rates than 5.25% so how would a CEO rationalize blowing 2-3% on any money they brought into the USA?
