Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Most businesses in the US are small businesses who can't afford a team of lawyers or having offshore accounts, so we want a lower rate to help the majority of the mom and pop businesses.
Then you should know that effective US corporate tax rates are all over the map, varying widely over time, by industry, and by size and age of the firm. Also that these effective rates as a whole are and long have been below OECD and other comparable averages. And of course dollars paid in foreign taxes are a credit against taxes owed to the US. These offsets are the opposite of double-taxation. The problem though is that whatever the applicable US taxes on foreign earnings are, they are not owed until the funds are repatriated. That should be changed to taxable as earned, regardless of where the funds are left sitting in storage. In an increasingly global economy, there is less and less reason to want to repatriate earnings in any case, but concurrent taxation would do away with a barrier for those funds that otherwise ought to be.
Then you should know that effective US corporate tax rates are all over the map, varying widely over time, by industry, and by size and age of the firm. Also that these effective rates as a whole are and long have been below OECD and other comparable averages. And of course dollars paid in foreign taxes are a credit against taxes owed to the US. These offsets are the opposite of double-taxation. The problem though is that whatever the applicable US taxes on foreign earnings are, they are not owed until the funds are repatriated. That should be changed to taxable as earned, regardless of where the funds are left sitting in storage. In an increasingly global economy, there is less and less reason to want to repatriate earnings in any case, but concurrent taxation would do away with a barrier for those funds that otherwise ought to be.
I'm a CPA and work for companies trying to reduce their effective rates as well and I agree with his statements. What you may not understand is that companies spend billions of dollars to reduce their effective rates. That's wasted money and inefficient for our economy. Also, the diverse rates you reference result from what essentially ends up being a regressive form of taxation. Large international companies are able to shift profits and tax plan their way to rates less than 35. However, smaller domestic corporations are much closer to the 35%. Also, certain industries just aren't able to move IP, etc. to reduce their rates so they pay closer to 35% as well. it's not a fair taxation regime and most everyone seems to agree on that, and agree that our rates are too high, they just can't figure out exactly how to fix it.
The "fix" that you describe would only force more companies to leave the US. Why , in an environment where companies are already moving overseas via inversions, would our government start taxing overseas earnings more aggressively. That would only further incentives businesses to move their headquarters overseas.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
