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US Companies Parking Profits Offshore Indefinitely

ONW said:
Thx Chris, and tell me where I'm wrong here, but we have the consumer market that everyone wants access to. If we tell, for example IKEA, that they are paying a X% import tax unless they build a plant that produces Y% of their goods in the U.S., would that be acceptable by the WTO?
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No, I think the WTO would consider that discriminatory and subject to trade retaliation.
 
Wrangor said:
Actually like that. If the true goal is to strengthen our business community something along this lines could have a very positive effect without costing too much money to the government.
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Not taxing any US based companies wouldn't cost too much money?

Plus, you would have to institute some sort of accumulated profits tax with severe penalties, or shareholders would treat companies like IRAs with no minimum withdrawal requirements.
 
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ChrisL68 said:
Not taxing any US based companies wouldn't cost too much money?

Plus, you would have to institute some sort of accumulated profits tax with severe penalties, or shareholders would treat companies like IRAs with no minimum withdrawal requirements.
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The still are gong to have to withdraw that money to have access to it in any significant amounts (at which point it would be taxes). You could severely lower the business rates without eliminating it. It would also increase production, increase the tax base, and increase profits for the big players. This would all bring more money into the coffers.

We need to evaluate our priorities with regards to how we are encouraging businesses to act. This was always my opposition to violent change to the minimum wage. You would basically be encouraging businesses to cut labor.

Incremental growth in minimum wage coupled with lower businesses taxes will encourage growth while at the same time passing some of the profits down the line to the laborers.
 
ChrisL68 said:
Really good discussion on this subject. I dont agree with all of the recommendations but at least they are asking the right questions.

http://blogs.hbr.org/2014/08/the-conversation-we-should-be-having-about-corporate-taxes/
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Thanks that was informative. I definitely agree with this. I'm fine with a small tax as they say in the next paragraph as long as it's simple.

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Mihir Desai: Well, yeah, I think there’s a fair amount of merit. And I don’t even know if it’s a minority. The corporate tax is a hard tax to like. It’s a hard tax to like because it’s a second layer of taxation and it’s entity-level taxation. So it’s always going to be dominated by a tax on individuals, because you’re giving another margin for distortion and another margin for evasion.
 
ChrisL68 said:
No, I think the WTO would consider that discriminatory and subject to trade retaliation.
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Is it discriminatory because I used a specific company or would applying it to all foreign corporations be discriminatory also?
 
One problem I have with tax following book income is that book accounting rules are so divorced from the economic reality of the transaction.

An example. Hot start up tech Company A issues restricted stock of 1,000 shares to an employee when the share value is $1 per share.

When the shares vest in 3 years and the employee actually owns the shares and can sell them, the value of the shares is $100 per share.

For tax, the employee has compensation of $100,000 and the employer gets a deduction of $100,000. Make sense since the employer transferred something worth $100K to the employee.

For book, expense is $1,000, based on the value of the shares when they were granted.
 
ONW said:
Is it discriminatory because I used a specific company or would applying it to all foreign corporations be discriminatory also?
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They are real persnickety about all foreign entities being subject to the same rules as domestic entities.
 
ChrisL68 said:
They are real persnickety about all foreign entities being subject to the same rules as domestic entities.
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The same rules or different rules applying to foreign vs. domestic entities?
 
ONW said:
The same rules or different rules applying to foreign vs. domestic entities?
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The rule can't be applied in a discriminatory fashion. VAT tax imports and exclude exports, but they do for every company foreign or domestic.
 
Don't other countries have VATs, or am I thinking of purchases not imports?
 
I'm not convinced most people posting on this thread have any knowledge about the tax code.

Not only are the US's corporate tax rates some of the highest in the world but this kicker is always fun:

The US is one of very few countries (the only major economy) in the whole world where all of one's income is taxed as if it is earned in the US. Let's take an example: If a company based in the US earns $1bil dollars in the US and $1bil in the EU, it must pay US taxes on all that income (there are reciprocal agreements that will reduce this but the delta between the two tax rates must be paid to the US as if the income was earned on the US bracket). That same company based in Europe would pay taxes on the $1bil to US at US rate and $1bil to its home country at the prevailing rate.
 
Deacon923 said:
Uh that was noted on page 2 or so. Try to keep up.
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bnr_burn_center3.jpg
 
http://www.ft.com/intl/cms/s/0/ae979ad0-4708-11e4-8c50-00144feab7de.html#axzz3EiEhrswl
Apple hit by Brussels finding over illegal Irish tax deals

Apple will be accused of prospering from illegal tax deals with the Irish government for more than two decades when Brussels this week unveils details of a probe that could leave the iPhone maker with a record fine of as much as several billions of euros.

Preliminary findings from the European Commission’s investigation into Apple’s tax affairs in Ireland, where it has had a rate of less than 2 per cent, claim the Silicon Valley company benefited from illicit state aid after striking backroom deals with Ireland’s authorities, according to people involved in the case.
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Weird, it's asking me to signup to get access to the article now. It was letting me in earlier.
 
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