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The Joint Committee on Taxation has estimated that Sen. Sander's bill will raise close to 600 Billion dollars over the next decade if passed while incentivizing companies to bring their manufacturing and overseas locations back to the US. Naturally, the GOP will argue this as a blow to business and detrimental to our economy, but the rationale behind that is unbeknownst to me. This legislation will remove the incentive to offshore funds and bring in billions in additional revenue which will assist greatly in ensuring that we have the resources to fund our obligations.
"Corporations offshoring profits costs both the federal government and states billions of dollars per year. One of the more egregious giveaways is known as “deferral,” which allows U.S. corporations to avoid paying taxes on overseas profits until they bring that money back to the U.S., giving them every incentive to leave it overseas permanently.
According to the Congressional Budget Office, “The current tax system provides incentives for U.S. firms to locate their production facilities in countries with low taxes as a way to reduce their tax liability at home,” ultimately resulting in compensation for U.S. workers being lower. Sen. Bernie Sanders (I-VT) is introducing a bill today that would end this practice and close several other corporate tax loopholes:
Under this legislation, corporations would pay U.S. taxes on their offshore profits as they are earned. This legislation takes away the tax incentives for corporations to move jobs offshore or to shift profits offshore because the U.S. would tax their profits no matter where they are generated.
Under the Corporate Tax Fairness Act, U.S. corporations would continue to get a credit against their U.S. taxes for foreign taxes they pay. That means that when an American corporation has profits in a country with lower corporate taxes than the U.S., they would pay the federal government the difference between the foreign rate and the U.S. rate. When an American corporation has profits in a country with higher corporate taxes than the U.S., they would pay nothing to the U.S.
According to the Joint Committee on Taxation, “the provisions in this bill will raise more than $590 billion in revenue over the next decade.”
Due to the proliferation of loopholes, credits, and the use of tax havens, major corporations haven’t paid the full statutory tax rate in 45 years. In 2011, the 12.1 percent effective rate that corporations paid was the lowest in 40 years."
The Joint Committee on Taxation has estimated that Sen. Sander's bill will raise close to 600 Billion dollars over the next decade if passed while incentivizing companies to bring their manufacturing and overseas locations back to the US. Naturally, the GOP will argue this as a blow to business and detrimental to our economy, but the rationale behind that is unbeknownst to me. This legislation will remove the incentive to offshore funds and bring in billions in additional revenue which will assist greatly in ensuring that we have the resources to fund our obligations.
Obama ran on this platform in 2008 and then did absolutely nothing to follow it up. Yes, Bernie is different but the two major parties are not.
I would love to see something like this pass through Congress, but I don't have that much faith in the current Congress and this will either die there or it will be picked apart and put back together so many times that it is nothing more than a shell of a bill with no real power to do anything beyond the name of the bill itself.
I would love to see something like this pass through Congress,
Why? We have a company like P&G that has a diaper factory in China, you're going to tax them on the profits for the product they make in China? If P&G is paying X amount to the Chinese government and then X amount to the US government how do they compete in China against the Chinese company making diapers that is only paying X amount to the Chinese governement? On top of that they are facing competition at home from the same Chines company.
It would seem to me the logical choice for P&G would be to sever all ties with the US...
Why? We have a company like P&G that has a diaper factory in China, you're going to tax them on the profits for the product they make in China? If P&G is paying X amount to the Chinese government and then X amount to the US government how do they compete in China against the Chinese company making diapers that is only paying X amount to the Chinese governement? On top of that they are facing competition at home from the same Chines company.
It would seem to me the logical choice for P&G would be to sever all ties with the US...
Well if they are producing goods in another country, I don't have much sympathy for a company like P&G.
Well if they are producing goods in another country, I don't have much sympathy for a company like P&G.
You need to face the fact companies are in business to make a profit in markets that are highly competitive globally and are going to seek whatever edge they can to remain competitive. Here's the quote I always like to use from an acquaintance of mine that owns a small manufacturing business. To put this into contex this was 2007 and he was swamped with orders:
Quote:
In January a company came to me about having all of our stoves made in China. They would be shipped to LLS boxed and ready to sell. This at a much bigger profit than I could ever make working the way we do. THIS WILL NEVER HAPPEN AS LONG AS I OWN LLS. I DON'T CARE HOW FAR BEHIND WE GET. THANKS. This is a great country and forum.
He has this option becsue it's a niche market without any foreign competition. My question for you is what does he do when one of his competitors decides to take this deal or some foreign based company moves into his market severely undercutting him? Does he just watch his business that he spent decades building evaporate?
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