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Old Today, 09:54 AM
 
1,019 posts, read 211,818 times
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Quote:
Originally Posted by Thatsright19 View Post
The floor for GILTI is 13.125 so Iím not sure how P&G would have gotten its effective tax rate under that without using any low or no tax jurustrictions.
My summary is imperfect, of course, and I probably misunderstood a thing or two. Perhaps the source article does a better job. Do you have access to the WSJ article? If so, can you take a look at it?
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Old Today, 10:06 AM
 
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Originally Posted by Thatsright19 View Post
Tax doesn’t drive the business.
While tax doesn't drive the business, it frequently drives site selection - especially in capital intensive industries.. For example, a modern high-end semiconductor wafer fab is about an $6-8 Billion capital investment, and national and local jurisdictions offer substantial tax incentives along with a package of non-tax incentives (e.g., access to electricity, credits at universities for ongoing employee education, water, etc etc). Heck, Vietnam moved a river to encourage Intel to put a lower-tech assembly-test facility in their country.

The jobs are high-paying jobs - wafer fab employees typically have PhDs in EE, ChemE, Chemistry, Materials Science, ME, IE, Solid State Physics, etc.

Even so, the differential cost of labor is only one step up from rounding error and is not a factor in site selection for a wafer fab. Availability of an educated workforce is a major factor, but the differential in labor costs from one jurisdiction to another is rounding error.

Last edited by RationalExpectations; Today at 10:15 AM..
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Old Today, 10:12 AM
 
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Originally Posted by CaptainNJ View Post
laws sunset intentionally for the benefit of politicians. they will be busy but they will be very happy. they can collect their bribery from people who are impacted by the law. thats the only thing government does.
Very true. For nearly 35 years, the R&D tax credit would periodically expire, companies would lobby for its reinstatement, and congress would collect campaign contributions. It was finally made permanent in 2015, I think.

https://en.wikipedia.org/wiki/Resear...ion_Tax_Credit
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Old Today, 11:13 AM
 
2,496 posts, read 1,596,666 times
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Quote:
Originally Posted by RationalExpectations View Post
While tax doesn't drive the business, it frequently drives site selection - especially in capital intensive industries.. For example, a modern high-end semiconductor wafer fab is about an $6-8 Billion capital investment, and national and local jurisdictions offer substantial tax incentives along with a package of non-tax incentives (e.g., access to electricity, credits at universities for ongoing employee education, water, etc etc). Heck, Vietnam moved a river to encourage Intel to put a lower-tech assembly-test facility in their country.

The jobs are high-paying jobs - wafer fab employees typically have PhDs in EE, ChemE, Chemistry, Materials Science, ME, IE, Solid State Physics, etc.

Even so, the differential cost of labor is only one step up from rounding error and is not a factor in site selection for a wafer fab. Availability of an educated workforce is a major factor, but the differential in labor costs from one jurisdiction to another is rounding error.
Well, of course. Manufacturers are infamous for using county lines to pit them against each other for property tax abatements and other credits. That’s just driving location. That’s not driving the idea that a plant was needed in the first place to meet that regions capacity. There was already 100 factors beyond tax that drive home the idea that plant was happening. Anyone who thought tax reform was going to generate some massive capital outburst of spending is clueless.

Trust me. Tax and legal often tell the business not to do xy and z and the pushback comes that it’s happening regardless of the tax impacts. The business very often wins out, as they rightfully should many times.
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Old Today, 11:15 AM
 
2,496 posts, read 1,596,666 times
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Quote:
Originally Posted by RationalExpectations View Post
My summary is imperfect, of course, and I probably misunderstood a thing or two. Perhaps the source article does a better job. Do you have access to the WSJ article? If so, can you take a look at it?
No, I donít have access to the wsj. Honestly, short of sitting down and seeing their international organizational chart and learning the institutional knowledge of their tax planning strategies with the vp of tax from p&g, itís a pretty hopeless exercise. Itís also misleading to only look at GILTI only.
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