It's Time to Lower Corporate Taxes

[Kimura]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

I'm sorry, in my opinion, and from the available data, corporate taxes aren't affecting American competitiveness. Like I said, in these low or no corporate income tax havens, many of these countries have VAT and other regressive schemes.

With that being said, I have no problems with giving productive enterprises tax breaks, tax credits, etc, especially small and medium-sized firms. The only people I would like to see hit with a sin tax or Tobin tax would be some of the seedier elements of Wall Street, but that could mostly be handled with legislation to cripple speculation and RICO indictments.

 

[Toro]

Taxes are just a small part of it. Labor costs are king.

That's true. But taxes are still a cost. And it is driving American corporations offshore.

I don't think so. That is a myth that the right has been pushing since the beginning. Corporations enjoy all kinds of loopholes. What pushes companies off shore is cheap labor and cheap raw materials.

And cheap taxes.

If a company will act to lower it's input costs, it will also act to lower its other costs, such as taxes.

 

[Toro]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

The rate is low because American corporations employ very smart tax accountants and lawyers to find ways to lower their taxes from the very high marginal rate. Lower that rate and remove the incentives to avoid the high marginal tax rate.

Plus we repatriate capital from offshore, which is doing absolutely zero for the US economy.

 

[Crystalclear]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

I'm sorry, in my opinion, and from the available data, corporate taxes aren't affecting American competitiveness. Like I said, in these low or no corporate income tax havens, many of these countries have VAT and other regressive schemes.

With that being said, I have no problems with giving productive enterprises tax breaks, tax credits, etc, especially small and medium-sized firms. The only people I would like to see hit with a sin tax or Tobin tax would be some of the seedier elements of Wall Street, but that could mostly be handled with legislation to cripple speculation and RICO indictments.

It is affecting American competitiveness, since many companies move offshore.

 

[Ravi]

America once went to war to escape British taxes. Now, U.S. companies are moving to the U.K. to pay them.

U.S. businesses are buying foreign companies in countries with lower tax rates so they can switch their legal home and cut their tax bills. The process, known as inversion, is the hottest trend in mergers and acquisitions, driving some of the biggest takeovers this year.

While some companies are heading to low-tax countries like Ireland and the Netherlands, Britain is emerging as the most popular landing spot because American executives are comfortable with its location, language and lifestyle. A tax break for companies filing for patents in the U.K. is another reason, particularly for pharmaceutical makers, which have been big participants in the inversion rush.
Related Video

Drug companies and medical device makers are making multi-billion-dollar merger deals to avoid high U.S. corporate taxes. How do so-called "inversion deals" work? WSJ's Jason Bellini has The Short Answer.

Around 20 American companies have reincorporated overseas in the past 18 months, at least in part to escape the reach of the Internal Revenue Service, according to Robert Willens, a corporate tax adviser in New York, with about eight choosing the U.K. There have been a total of about 55 inversion deals since 1994, he said.
Related Reading

"Right now, it's safe to say that the U.K. is the preferred country of destination for inverted companies, given the favorable tax regime and the non-tax attractions of the U.K.," said Mr. Willens, a former managing director at Lehman Brothers. ...

Britain's emergence as an inversion haven is based in part on a dramatic overhaul of the country's corporate tax code over the past five years. The coalition government of the Conservative and Liberal Democrat parties has put in place a series of cuts that will reduce the main corporate tax rate to just 20% next year from 28% in 2010, as well as measures to lower tax on income from intellectual property.

The U.S. corporate income tax rate is about 39.1%, the highest among the developed countries that form the Organization for Economic Cooperation and Development, according to that organization. ...

A company can be incorporated in the U.K. and be subject to its corporate-governance structure, which many companies find attractive. They can also choose to maintain their operational headquarters in another country where the corporate tax rate may be lower than in the U.K. and pay taxes there, provided the company's board also meets in that country. That differs significantly from the U.S.: Companies incorporated there must pay taxes, even on overseas income.

In Inversion Tax Deals, U.K. Is a Winner - WSJ

Speculation. Why are so many companies moving to Mexico? Their tax rates are right up there according to your chart.

 

[Ravi]

Offshore cash is taxed as US marginal rates once it is repatriated. That's why it's sitting offshore. The United States is the only country which taxes offshore income that I'm aware of. A Canadian, Dutch, Swiss or Irish company can bring that cash back home without it being taxed.

I don't think that is correct. According to wikipedia:

Canadian residents and corporations pay income taxes based on their world-wide income. Canadians are protected against double taxation receiving income from certain countries which gave agreements with Canada through the foreign tax credit, which allows taxpayers to deduct from their Canadian income tax otherwise payable from the income tax paid in other countries. A citizen who is currently not a resident of Canada may petition the CRA to change her or his status so that income from outside Canada is not taxed.

Deductions which are not available to Americans.

For example, when I moved from Canada, I stopped paying or even filing Canadian income taxes even though I was still a Canadian. Now that I am an American, I have to pay and file to the IRS even if I leave the United States forever.

Canadian corporations can credit taxes paid on foreign income tax in ways that American companies cannot, I understand.

What? If you give up your American citizenship you won't be obligated to pay the IRS.

And Canada and the US have a tax treaty. Money I've earned in Canada was taxed by Canada but the treaty allowed me to take that as a deduction in the US.

btw, if it sucks so much here why did you ever leave!

 

[Dad2three]

Offshore corporate income is treated differently. US multinationals shift around $2 trillion to their offshore subsidiaries, so they can avoid paying corporate income tax. US corporations are sitting on 10 trillion cash, they don't need anymore tax breaks.

Offshore cash is taxed as US marginal rates once it is repatriated. That's why it's sitting offshore. The United States is the only country which taxes offshore income that I'm aware of. A Canadian, Dutch, Swiss or Irish company can bring that cash back home without it being taxed. An American company cannot. So American companies are reincorporating offshore. We are losing that anyways, and we will continue to do so. Lower the tax rate to 15% and it will stop.

I've heard that argument from the Left my whole life. The cost of healthcare is built into higher nominal wages. Canada is a higher cost country.

And? ...

You brought up the issue of healthcare as a marginal competitive advantage in a discussion about taxes, so I assumed that you did so to rebut the notion companies are leaving because of high American taxes. Can you point to any company that has left the United States because of healthcare costs? Healthcare costs certainly weren't the reason why Canadian companies were reincorporating in the US in the 1990s, which was a big deal in Canada. After the Canadian government cut corporate taxes, it stopped being a big deal in Canada.

YOU are NEVER honest Bubbaa right winger!

"The United States is the only country which taxes offshore income that I'm aware of."


Sending finances offshore has become so commonplace that US officials have sought to work with international leaders to close the loophole. Tax avoidance cost the US approximately $300 billion last year and although much of that sum comes from individuals, cracking down on corporations could prove difficult because transfers of this sort are completely legal.

This tax analysis comes just months after a congressional investigation found that Apple had set up a complicated web of subsidiaries to avoid paying any taxes. Lawmakers found that some of Apple’s subsidiaries listed zero employees and were effectively stateless entities run from the company’s offices in California.

“There is a technical term economists like to use for behavior like this,” Edward Kleinbard, a former staff director at the Congressional Joint Committee on Taxation, told the New York Times in May. “Unbelievable chutzpah.”

Nearly 60 top corporations used loophole to avoid paying billions in US taxes ? RT USA




Warren Buffett: High Corporate Taxes Are An American 'Myth'


"It's a myth that American corporations are paying 35 percent or anything like it," Buffett said, referring to the top marginal corporate tax rate. "Corporate taxes are not strangling American competitiveness."

Warren Buffett: High Corporate Taxes Are An American 'Myth'

 

[Dad2three]

Since 2009, at least 10 U.S. public companies have moved their incorporation address abroad or announced plans to do so, including six in the last year or so, according to a Wall Street Journal analysis of company filings and statements. That's up from just a handful from 2004 through 2008.

It's not just their incorporation address. It's mostly shifting assets offshore. That's why the effective corporate income tax rate has been falling. The US tax code incentivizes companies to do this. So reform the tax code and lower taxes, and we reduce the incentives for companies to go offshore. The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

". It's mostly shifting assets offshore"

YOU MEAN PLAYING WITH INTELLECTUAL PROPERTY BULLSHIT! Get honest ONE TIME Bubba!

Offshore Corporate Profits: The Only Thing ‘Trapped’ Is Tax Revenue

Recent investigations have revealed that multinational corporations are stockpiling trillions of dollars in “offshore” income, purportedly trapped overseas because of U.S. corporate taxes. This has created the illusion that there is a large stock of cash somewhere offshore, just waiting to be invested in our struggling economy, if only we could somehow unlock it.


These arguments are wrong. They are based on a faulty premise; these “trapped overseas” profits are neither overseas nor trapped. It is true that for accounting purposes, multinational corporations keep these dollars off of their U.S. books. But in the real world, the money is often deposited in U.S. banks, circulating in the U.S. economy, and available for a wide variety of domestic investments. For nearly all practical purposes, that money is already here, being put to work in the U.S. economy.

Offshore Corporate Profits: The Only Thing ?Trapped? Is Tax Revenue | Center for American Progress

 

[Ravi]

Offshore corporate income is treated differently. US multinationals shift around $2 trillion to their offshore subsidiaries, so they can avoid paying corporate income tax. US corporations are sitting on 10 trillion cash, they don't need anymore tax breaks.

Offshore cash is taxed as US marginal rates once it is repatriated. That's why it's sitting offshore. The United States is the only country which taxes offshore income that I'm aware of. A Canadian, Dutch, Swiss or Irish company can bring that cash back home without it being taxed. An American company cannot. So American companies are reincorporating offshore. We are losing that anyways, and we will continue to do so. Lower the tax rate to 15% and it will stop.

And? ...

You brought up the issue of healthcare as a marginal competitive advantage in a discussion about taxes, so I assumed that you did so to rebut the notion companies are leaving because of high American taxes. Can you point to any company that has left the United States because of healthcare costs? Healthcare costs certainly weren't the reason why Canadian companies were reincorporating in the US in the 1990s, which was a big deal in Canada. After the Canadian government cut corporate taxes, it stopped being a big deal in Canada.

YOU are NEVER honest Bubbaa right winger!

"The United States is the only country which taxes offshore income that I'm aware of."


Sending finances offshore has become so commonplace that US officials have sought to work with international leaders to close the loophole. Tax avoidance cost the US approximately $300 billion last year and although much of that sum comes from individuals, cracking down on corporations could prove difficult because transfers of this sort are completely legal.

This tax analysis comes just months after a congressional investigation found that Apple had set up a complicated web of subsidiaries to avoid paying any taxes. Lawmakers found that some of Apple’s subsidiaries listed zero employees and were effectively stateless entities run from the company’s offices in California.

“There is a technical term economists like to use for behavior like this,” Edward Kleinbard, a former staff director at the Congressional Joint Committee on Taxation, told the New York Times in May. “Unbelievable chutzpah.”

Nearly 60 top corporations used loophole to avoid paying billions in US taxes ? RT USA




Warren Buffett: High Corporate Taxes Are An American 'Myth'


"It's a myth that American corporations are paying 35 percent or anything like it," Buffett said, referring to the top marginal corporate tax rate. "Corporate taxes are not strangling American competitiveness."

Warren Buffett: High Corporate Taxes Are An American 'Myth'

Hey now. Toro might be somewhat deluded but he isn't a dishonest rightwinger.

 

[Kimura]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

I'm sorry, in my opinion, and from the available data, corporate taxes aren't affecting American competitiveness. Like I said, in these low or no corporate income tax havens, many of these countries have VAT and other regressive schemes.

With that being said, I have no problems with giving productive enterprises tax breaks, tax credits, etc, especially small and medium-sized firms. The only people I would like to see hit with a sin tax or Tobin tax would be some of the seedier elements of Wall Street, but that could mostly be handled with legislation to cripple speculation and RICO indictments.

It is affecting American competitiveness, since many companies move offshore.

It's really not.

The US has effective tax rate of 27.1%, which is below the OECD average of 27.7%. This means we have lower rates than most of our economic competitors and partners.

If we look at Fortune 500s, it's even more telling. All of the profitable fortune 500s, from 2008-2010, had an effective tax rate of around 18.5% over a three year period. We're talking effective tax rate, the actual % paid in federal corporate income taxes, is roughly half the statutory amount of 35%. Some companies paid nothing during this period, such as Wells Fargo and GE.

 

[Dad2three]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

The rate is low because American corporations employ very smart tax accountants and lawyers to find ways to lower their taxes from the very high marginal rate. Lower that rate and remove the incentives to avoid the high marginal tax rate.

Plus we repatriate capital from offshore, which is doing absolutely zero for the US economy.

" Plus we repatriate capital from offshore, which is doing absolutely zero for the US economy. "



Yes Corps are hurting for capital right? lol

 

[Toro]

What? If you give up your American citizenship you won't be obligated to pay the IRS.

Well, now you know why some companies have decided to "give up their American citizenship" and relocate partially or wholly abroad.

As with most developed countries, and unlike the United States, I don't have to give up my citizenship to stop paying taxes. As a Canadian citizen, I don't have to file Canadian taxes while living outside of Canada.

BTW, even when I wasn't an American citizen but had a Green Card, had I opted to leave the US permanently and give up my Green Card, I still would have had to pay an "exit tax" or be subject to American taxes for a period of years.

And Canada and the US have a tax treaty. Money I've earned in Canada was taxed by Canada but the treaty allowed me to take that as a deduction in the US.

Are you a partnership or a C-corp?

btw, if it sucks so much here why did you ever leave!

C'mon Ravi. I never said it sucked here.

 

[Kimura]

The United States has the highest corporate income tax rate in the world, so it is no surprise that companies engage in activities to lower their taxes.

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

The rate is low because American corporations employ very smart tax accountants and lawyers to find ways to lower their taxes from the very high marginal rate. Lower that rate and remove the incentives to avoid the high marginal tax rate.

Plus we repatriate capital from offshore, which is doing absolutely zero for the US economy.

Most of these countries were capital is held, such as the Cayman Isands and Bermuda, are tax havens, no business is done in any of these places. Just sayin'....

 

[Dad2three]

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

I'm sorry, in my opinion, and from the available data, corporate taxes aren't affecting American competitiveness. Like I said, in these low or no corporate income tax havens, many of these countries have VAT and other regressive schemes.

With that being said, I have no problems with giving productive enterprises tax breaks, tax credits, etc, especially small and medium-sized firms. The only people I would like to see hit with a sin tax or Tobin tax would be some of the seedier elements of Wall Street, but that could mostly be handled with legislation to cripple speculation and RICO indictments.

It is affecting American competitiveness, since many companies move offshore.

It's really not.

The US has effective tax rate of 27.1%, which is below the OECD average of 27.7%. This means we have lower rates than most of our economic competitors and partners.

If we look at Fortune 500s, it's even more telling. All of the profitable fortune 500s, from 2008-2010, had an effective tax rate of around 18.5% over a three year period. We're talking effective tax rate, the actual % paid in federal corporate income taxes, is rough half the statutory amount of 35%. Some companies paid nothing during this period, such as Wells Fargo and GE.

" The US has effective tax rate of 27.1%, which is below the OECD average of 27.7%. This means we have lower rates than most of our economic competitors. "

THAT'S A HERITAGE FOUNDATION MADE UP EFFECTIVE RATE, Not based on REAL Corps, but ones they actually made up AND analyzed for the 'effective' tax rates. It';s MUCH lower than that

Bernie Sanders Is Right and the Tax Foundation Is Wrong: The U.S. Has Very Low Corporate Income Taxes | CTJReports

 

[Toro]

America once went to war to escape British taxes. Now, U.S. companies are moving to the U.K. to pay them.

U.S. businesses are buying foreign companies in countries with lower tax rates so they can switch their legal home and cut their tax bills. The process, known as inversion, is the hottest trend in mergers and acquisitions, driving some of the biggest takeovers this year.

While some companies are heading to low-tax countries like Ireland and the Netherlands, Britain is emerging as the most popular landing spot because American executives are comfortable with its location, language and lifestyle. A tax break for companies filing for patents in the U.K. is another reason, particularly for pharmaceutical makers, which have been big participants in the inversion rush.
Related Video

Drug companies and medical device makers are making multi-billion-dollar merger deals to avoid high U.S. corporate taxes. How do so-called "inversion deals" work? WSJ's Jason Bellini has The Short Answer.

Around 20 American companies have reincorporated overseas in the past 18 months, at least in part to escape the reach of the Internal Revenue Service, according to Robert Willens, a corporate tax adviser in New York, with about eight choosing the U.K. There have been a total of about 55 inversion deals since 1994, he said.
Related Reading

"Right now, it's safe to say that the U.K. is the preferred country of destination for inverted companies, given the favorable tax regime and the non-tax attractions of the U.K.," said Mr. Willens, a former managing director at Lehman Brothers. ...

Britain's emergence as an inversion haven is based in part on a dramatic overhaul of the country's corporate tax code over the past five years. The coalition government of the Conservative and Liberal Democrat parties has put in place a series of cuts that will reduce the main corporate tax rate to just 20% next year from 28% in 2010, as well as measures to lower tax on income from intellectual property.

The U.S. corporate income tax rate is about 39.1%, the highest among the developed countries that form the Organization for Economic Cooperation and Development, according to that organization. ...

A company can be incorporated in the U.K. and be subject to its corporate-governance structure, which many companies find attractive. They can also choose to maintain their operational headquarters in another country where the corporate tax rate may be lower than in the U.K. and pay taxes there, provided the company's board also meets in that country. That differs significantly from the U.S.: Companies incorporated there must pay taxes, even on overseas income.

In Inversion Tax Deals, U.K. Is a Winner - WSJ

Speculation. Why are so many companies moving to Mexico? Their tax rates are right up there according to your chart.

It's not speculation. Tax experts are saying that a big reason why companies are reincorporating abroad is because of taxes.

 

[Ravi]

What? If you give up your American citizenship you won't be obligated to pay the IRS.

Well, now you know why some companies have decided to "give up their American citizenship" and relocate partially or wholly abroad.

As with most developed countries, and unlike the United States, I don't have to give up my citizenship to stop paying taxes. As a Canadian citizen, I don't have to file Canadian taxes while living outside of Canada.

BTW, even when I wasn't an American citizen but had a Green Card, had I opted to leave the US permanently and give up my Green Card, I still would have had to pay an "exit tax" or be subject to American taxes for a period of years.

And Canada and the US have a tax treaty. Money I've earned in Canada was taxed by Canada but the treaty allowed me to take that as a deduction in the US.

Are you a partnership or a C-corp?

btw, if it sucks so much here why did you ever leave!

C'mon Ravi. I never said it sucked here.

Uh, no. I don't know why American companies give up their "citizenship" but it isn't as simple as you are trying to claim. Also, I don't know that they are giving up their corporate citizenship. Are they totally independent of the USA?

S-Corp.

Just trying to figure out why you'd be here working if working in Canada or some other country is better for your company's bottom line.

 

[Toro]

Corporate taxes are at a half-century low. If we look at the rate actually paid by corporations, as opposed to IRS regs, the US literally has the second-lowest tax rate in the developed world.

The rate is low because American corporations employ very smart tax accountants and lawyers to find ways to lower their taxes from the very high marginal rate. Lower that rate and remove the incentives to avoid the high marginal tax rate.

Plus we repatriate capital from offshore, which is doing absolutely zero for the US economy.

Most of these countries were capital is held, such the Cayman Isands and Bermuda, are tax havens, no business is done in any of these places. Just sayin'....

Yup. I don't have a problem cracking down on that. But that capital was earned outside the United States where it was subject to income taxes in the foreign domicile, then deposited in offshore tax havens and sits there not helping the United States economy in any way.

 

[Ravi]

In Inversion Tax Deals, U.K. Is a Winner - WSJ

Speculation. Why are so many companies moving to Mexico? Their tax rates are right up there according to your chart.

It's not speculation. Tax experts are saying that a big reason why companies are reincorporating abroad is because of taxes.

Then why are companies moving to Mexico? They are in the top ten of tax rates.

 

[Dad2three]

Offshore cash is taxed as US marginal rates once it is repatriated. That's why it's sitting offshore. The United States is the only country which taxes offshore income that I'm aware of. A Canadian, Dutch, Swiss or Irish company can bring that cash back home without it being taxed. An American company cannot. So American companies are reincorporating offshore. We are losing that anyways, and we will continue to do so. Lower the tax rate to 15% and it will stop.




You brought up the issue of healthcare as a marginal competitive advantage in a discussion about taxes, so I assumed that you did so to rebut the notion companies are leaving because of high American taxes. Can you point to any company that has left the United States because of healthcare costs? Healthcare costs certainly weren't the reason why Canadian companies were reincorporating in the US in the 1990s, which was a big deal in Canada. After the Canadian government cut corporate taxes, it stopped being a big deal in Canada.

YOU are NEVER honest Bubbaa right winger!

"The United States is the only country which taxes offshore income that I'm aware of."


Sending finances offshore has become so commonplace that US officials have sought to work with international leaders to close the loophole. Tax avoidance cost the US approximately $300 billion last year and although much of that sum comes from individuals, cracking down on corporations could prove difficult because transfers of this sort are completely legal.

This tax analysis comes just months after a congressional investigation found that Apple had set up a complicated web of subsidiaries to avoid paying any taxes. Lawmakers found that some of Apple’s subsidiaries listed zero employees and were effectively stateless entities run from the company’s offices in California.

“There is a technical term economists like to use for behavior like this,” Edward Kleinbard, a former staff director at the Congressional Joint Committee on Taxation, told the New York Times in May. “Unbelievable chutzpah.”

Nearly 60 top corporations used loophole to avoid paying billions in US taxes ? RT USA




Warren Buffett: High Corporate Taxes Are An American 'Myth'


"It's a myth that American corporations are paying 35 percent or anything like it," Buffett said, referring to the top marginal corporate tax rate. "Corporate taxes are not strangling American competitiveness."

Warren Buffett: High Corporate Taxes Are An American 'Myth'

Hey now. Toro might be somewhat deluded but he isn't a dishonest rightwinger.

Yes, he's CLAIMED to NOT be a right winger but he's NEVER honest when I've SHOWN proof of his dishonesty and right wing crap. He's supposed to be considered 'moderate', and judged against the REAL loony right like Rabbi and Ed B, but he still will not accept reality and facts!

 

[Toro]

Uh, no. I don't know why American companies give up their "citizenship" but it isn't as simple as you are trying to claim. Also, I don't know that they are giving up their corporate citizenship. Are they totally independent of the USA?

No. They just shift their tax domicile.

Just trying to figure out why you'd be here working if working in Canada or some other country is better for your company's bottom line.

My organization's bottom line is best served by being in the US, though we do have offshore structures.