How stupid is this Tax? | TigerDroppings.com
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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
24302 posts

How stupid is this Tax?

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quote:

Here's the skinny. If an American company earns profit in another country, it has to pay that country's income taxes. But if it then chooses to bring that cash back to America, it owes U.S. taxes, minus a credit for foreign taxes already paid. So imagine Cisco earns $1 billion profit in Switzerland. It will owe Switzerland's 8.5% corporate tax. But if Cisco then brings the remaining $915 million back to the U.S. to pay dividends or expand its workforce, it will owe another 26.5% to the IRS -- the difference between Switzerland's 8.5% tax rate and America's 35% rate. It's called the repatriation tax.



quote:

U.S. companies held about $1.2 trillion in total cash. But almost 60% of that was sitting in foreign bank accounts, according to Moody's. Some companies hold the vast majority of their loot abroad. About 80% of Oracle's (NASDAQ: ORCL ) cash is held overseas. Apple (NASDAQ: AAPL ) holds close to 70% of its cash outside the U.S.




quote:

The Joint Tax Committee estimates that ending the repatriation tax altogether would raise deficits by about $8 billion per year -- a rounding error measured against $2.9 trillion in total revenue. A separate estimate from the Congressional Budget Office shows that ending repatriation taxes would actually raise federal tax revenue, since companies would likely bring more cash home to pay dividends, which are then taxed. Either way, repatriation taxes have a trivial impact on the federal budget.



Tmacelroy12
LSU Fan
Houston
Member since Aug 2012
5489 posts

re: How stupid is this Tax?
God bless America

ETA: Uncle Sam always wants his hand in something
This post was edited on 2/23 at 11:18 am


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Skin
McNeese State Fan
#FreeBrandonHarris
Member since Jun 2007
4331 posts

re: How stupid is this Tax?
About as stupid as retaliatory taxes.


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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7901 posts

re: How stupid is this Tax?
Switzerland's corporate tax rate is not 8.5%. According to KPMG it's 21%.


RickAstley
LSU Fan
Reno, Nevada
Member since May 2011
1649 posts

re: How stupid is this Tax?
I heard another face palm tax that will be implemented in some town in Texas. They will tax people involved in a car wreck in order to help fund the first responders, and clean up crew. The town expects to raise $50,000 a year from the tax. So if you got in a car wreck, you would be taxed regardless of whose fault it was, on top of all the standard expenses already involved. I wouldn't be surprised if they spend $60,000+ just implementing the new program.


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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
24302 posts

re: How stupid is this Tax?
Even if you are correct about Switzerland's coporate tax rate, which Im too lazy to check right now. The point is, it's already been taxed, it shouldn't be taxed again.


Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
121048 posts

re: How stupid is this Tax?
Seems stupid but what about that whole corporations are people thing?

If I go work in another country, I might be subject to taxation here at home depending on the duration of my stay there.


Teddy Ruxpin
LSU Fan
New Orleans, LA
Member since Oct 2006
21221 posts

re: How stupid is this Tax?
Corporations have been legal persons for decades and decades. No one gave a shite until one Supreme Court decision about campaign finances. Politics begot politics. Go figure.


ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How stupid is this Tax?
Apple is waiting for a tax holiday as the bulk of its $137 billion in cash is overseas


CalcuttaTigah
Member since Jul 2009
419 posts

re: How stupid is this Tax?
There have been discussions over the last few years of allowing that money to be repatriated, tax free as a one time deal. That would be very interesting.


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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
16726 posts

re: How stupid is this Tax?
quote:

Apple is waiting for a tax holiday as the bulk of its $137 billion in cash is overseas
It's amazing how all of their sales activity that generates income occurs outside the United States, but all of their research and design activity that cause expense occur in the United States. Same for General Electric and all other multinational corporations. They basically avoid paying U.S. income taxes on any cash they do not need repatriated.


Vols&Shaft83
Tennessee Fan
Member since Dec 2012
24302 posts

re: How stupid is this Tax?
quote:

It's amazing how all of their sales activity that generates income occurs outside the United States, but all of their research and design activity that cause expense occur in the United States. Same for General Electric and all other multinational corporations. They basically avoid paying U.S. income taxes on any cash they do not need repatriated.



Precisely, and as long as it's legal, can you blame them?

It's the same thing that's happened in California, you start asking for too much in taxes, and the companies will just say "frick it, we're leaving, you're greedy, and now you get 35% of NOTHING."

I'd do the exact same thing.


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Tiger at Law
LSU Fan
Baton Rouge
Member since May 2007
1542 posts

re: How stupid is this Tax?
quote:

It's amazing how all of their sales activity that generates income occurs outside the United States, but all of their research and design activity that cause expense occur in the United States. Same for General Electric and all other multinational corporations. They basically avoid paying U.S. income taxes on any cash they do not need repatriated.



quote:

As Judge Learned Hand stated in Helvering v. Gregory, 69 F.2d 809, 810 (2nd Cir.1934) aff'd 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935): "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes".


Ice Cream Sammich
LSU Fan
Baton Rouge
Member since Apr 2010
7598 posts

re: How stupid is this Tax?
Bookmarked.


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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
24302 posts

re: How stupid is this Tax?
quote:

"Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes".



Beautifully stated


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tirebiter
LSU Fan
ATL
Member since Oct 2006
5293 posts

re: How stupid is this Tax?
quote:

Even if you are correct about Switzerland's coporate tax rate, which Im too lazy to check right now. The point is, it's already been taxed, it shouldn't be taxed again.


Dividends shouldn't be taxed twice, either, but it still happens.


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