Comments on: Tax repatriation

By: WD7179

WD7179 — Mon, 24 Oct 2011 15:23:25 +0000

pheeble,
Really, you think they will run and hide, then why are they in such a rush to bring all that money over here? We all know why, they want the protections of the US, but they just don’t want to pay for it; that is left up to us tax payers. I say call their bluff, my bet is that they will decide brining back a portion of those profits is much better than leaving it overseas where any corrupt government can take it whenever they please.

By: pheebel_wimpe

pheebel_wimpe — Wed, 19 Oct 2011 21:47:06 +0000

Ugh! As soon as someone mentions offshore assets, people get hysterical and come up with ludicrous proposals to force corporations to bring the money home and subject profits that were already subject to foreign tax, to a separate batch of dividend taxes. Ridiculous moves like this will only encourage corporations to redomicile elsewhere. Even though offshore tax havens are notoriously high cost places to conduct actual business, if policymakers push hard enough, it might just become economical to move whole corporate headquarters abroad.

The whole discussion assumes that all international corporate tax planning involves shifting profits to a mailbox beside a sandy beach in a low-rate tax haven. While I don’t deny that some of that does happen (and should be audited heavily), a lot of international corporate tax planning revolves around more mundane concerns, like how to fund a business’s international operations.

As a general principle, tax should only be paid on income once, in the jurisdiction in which it is earned when it is earned. America subjects income that was earned abroad, regardless of whether it was active business income, or passive investment income, to full taxation when the corporation seeks to repatriate it. Double tax is the real injustice, and the reason why corporations continue to defer repatriation.

At the very least, America should allow corporations to claim credits for previously paid foreign tax against the repatriation taxes. Better still would be to allow profit legitimately earned through active business operations to return tax free.

By: M.C.McBride

M.C.McBride — Wed, 19 Oct 2011 20:07:08 +0000

This is a good article. I am not usually for tax increases, but I support this measure because of the desperate times we find ourselves in.

By: another1

another1 — Wed, 19 Oct 2011 19:01:09 +0000

So first was the attempt of injecting money into the banks to make sure the lent the money to businesses and individuals who needed, they bought t-bills and credit remained frozen even when the taxpayers bailed them out. Round 2. Repatriate offshore money to create jobs. Why don’t U.S. lawmakers consider the number of corporations investing in the 1st place (and not through M&A, but PP&E)? Nobody is investing in the U.S., even when they have money! It’s not a time to screw the taxpayers, again.

By: possibilianP

possibilianP — Wed, 19 Oct 2011 18:55:13 +0000

jaham, your economic theory has already been invented and is called the Laffer Curve. Look it up. Reagan implemented it and it was a disaster. He immediately raised taxes to offset the damage. You are not living in the real world. Let’s stick to economic theories that have been proven. The only one I can think of that really worked in the past was attributed to a man named John Maynard Keynes.

By: robb1

robb1 — Wed, 19 Oct 2011 18:06:06 +0000

Bravo David!

We need these type of articles… send them to all member of congress, please.

They typical small business still only have a 15% threshold at $ 50K. It should be raised to $ 100K just to do with inflation in the past 20 years. The savings will create jobs for sure and can be offset by the repatriation measures you suggest.

By: jaham

jaham — Wed, 19 Oct 2011 17:53:18 +0000

We need to reform our tax code: Lower rates for corporations and individuals and remove ALL deductions and loopholes – very simple (and do so in a manner that raises revenues). We don’t need 15,000 pages worth of inefficient tax code.

By: txgadfly

txgadfly — Wed, 19 Oct 2011 17:23:35 +0000

Why don’t individual citizens get tax preferences on overseas source income? All our competitors in Europe do that, even to the point of not taxing foreign income at all if its citizens do not live in their home country. Many countries do not tax a single individual homestead below a certain value either. Here we give tax breaks to buy speed boats!

Why are Government give-aways in the USA for large corporations and billionaires only? Here, they seem to think paying off on an insurance policy is a “give-away” when the insured is a common citizen. We need to export these people, not our jobs.

By: globecrawler

globecrawler — Wed, 19 Oct 2011 17:22:45 +0000

Here’s a head-scratcher. U.S. corporations can use foreign subsidiaries to earn income that’s untaxed in the U.S., but ordinary U.S. citizens who live in foreign countries are required to file a U.S. income-tax form every year and if they earn more than a certain amount, often must pay U.S. taxes on the excess. Sometimes ordinary middle-class incomes can attract U.S. taxes if there’s a wrinkle such as investment income.
It’s hard for me to think of another country that taxes people living abroad.
This looks like another illustration of the widespread complaint that the whole U.S. tax system is designed to benefit the powerful at the expense of the middle class.

By: 4ngry4merican

4ngry4merican — Wed, 19 Oct 2011 17:11:17 +0000

More proof, as if we needed any more, that massive tax breaks for mega-corporations do not create jobs. The offshore tax penalty sounds like a fine idea.