Inversion deals for those who don't know the term are when US companies buy smaller foreign companies and move their headquarters overseas, such as the Burger King deal. The reason they do this is taxes. Not US taxes, foreign taxes. Here are some of the benefits.
1) Foreign countries over the last couple decades have streamlined and flattened taxes to attract businesses, even socialist Canada and Europe, while the US has not.
2) Foreign countries do not charge their companies taxes on their overseas operations. The US does. Think about how stupid that is to disadvantage our own companies like that.
3) Foreign countries do not charge taxes for repatriating money from overseas. This is linked to bullet two. Think about the implication of this. Don't we want companies to bring money home? Yet we tax companies up to 35% when they do. Would you prefer to have $1 invested overseas or $0.65 invested in the US? When Bush lowered the repatriation rate for one year to 5%, tax receipts in dollars for repatriating ballooned. Companies simply do not bring money home, the cost is too high. So, government doesn't get the taxes and the money does not come back to our economy.
4) Foreign governments do not handicap their companies doing business in foreign governments like we do. Our government endlessly investigates and punishes our companies for practices that are completely legal, standard and compliant in other countries because they violate US law we are applying overseas. This one isn't really driving them overseas, but it's a clear benefit to doing so.
Here is not a benefit of inversion deals
- Taxes on US operations - Liberals keep making it sound like it lowers taxes on US operations, it doesn't.
A rational solution?
- Level the playing field. Ideal would be to out-capitalist the socialist countries that are more business friendly than we are, but at least for God sakes make it even. Don't punish us to remain.
The Obama solution? Don't do anything to make it attractive to stay, just try to punish companies that leave. Authoritarian leftism.
- In his first term, he ramped up regulations on companies that acquired similar sized companies for inversion deals, which was the norm at that time.
- Companies reacted by finding a loophole that bypassed the regulation and started acquiring smaller companies. Note, we always find a way around government, you can't stop us from being rational. You need to make it rational to stay, not just punish us for leaving.
- So now, they applied regulations to try to stop companies from doing the inversion deals with smaller companies. All they are doing is trying to reduce the benefit. Remember from above how US companies don't repatriate money? They are making it harder to do an inversion deal and move money into the US. We shot one foot, now we want to shoot the other.
Companies will as we always do continue to find ways around authoritarian leftist solutions. Authoritarian leftists will go down with their socialist ship and not fix it. Remember how they keep money out of the US, get almost no tax revenue for it, yet vehemently demand we continue the tax. Authoritarian leftism is about government control.
1) Foreign countries over the last couple decades have streamlined and flattened taxes to attract businesses, even socialist Canada and Europe, while the US has not.
2) Foreign countries do not charge their companies taxes on their overseas operations. The US does. Think about how stupid that is to disadvantage our own companies like that.
3) Foreign countries do not charge taxes for repatriating money from overseas. This is linked to bullet two. Think about the implication of this. Don't we want companies to bring money home? Yet we tax companies up to 35% when they do. Would you prefer to have $1 invested overseas or $0.65 invested in the US? When Bush lowered the repatriation rate for one year to 5%, tax receipts in dollars for repatriating ballooned. Companies simply do not bring money home, the cost is too high. So, government doesn't get the taxes and the money does not come back to our economy.
4) Foreign governments do not handicap their companies doing business in foreign governments like we do. Our government endlessly investigates and punishes our companies for practices that are completely legal, standard and compliant in other countries because they violate US law we are applying overseas. This one isn't really driving them overseas, but it's a clear benefit to doing so.
Here is not a benefit of inversion deals
- Taxes on US operations - Liberals keep making it sound like it lowers taxes on US operations, it doesn't.
A rational solution?
- Level the playing field. Ideal would be to out-capitalist the socialist countries that are more business friendly than we are, but at least for God sakes make it even. Don't punish us to remain.
The Obama solution? Don't do anything to make it attractive to stay, just try to punish companies that leave. Authoritarian leftism.
- In his first term, he ramped up regulations on companies that acquired similar sized companies for inversion deals, which was the norm at that time.
- Companies reacted by finding a loophole that bypassed the regulation and started acquiring smaller companies. Note, we always find a way around government, you can't stop us from being rational. You need to make it rational to stay, not just punish us for leaving.
- So now, they applied regulations to try to stop companies from doing the inversion deals with smaller companies. All they are doing is trying to reduce the benefit. Remember from above how US companies don't repatriate money? They are making it harder to do an inversion deal and move money into the US. We shot one foot, now we want to shoot the other.
Companies will as we always do continue to find ways around authoritarian leftist solutions. Authoritarian leftists will go down with their socialist ship and not fix it. Remember how they keep money out of the US, get almost no tax revenue for it, yet vehemently demand we continue the tax. Authoritarian leftism is about government control.
