Fair Tax = no more IRS problems | Page 2 | TigerDroppings.com
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ScoopAndScore
baton rouge
Member since Oct 2008
7853 posts

re: Fair Tax = no more IRS problems

BTW Zach, thanks a lot - I have a crappy song stuck in my head all day now (from other thread).



doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
7780 posts

re: Fair Tax = no more IRS problems
quote:

As an auditor that works on several clients that are multi-billion dollar companies, I can tell you that your belief that corporations use accountants and loopholes to pay no taxes is completely constructed by the media. In every case I have ever seen of a corporation paying little to no US taxes it is because they pay a monstrous amount of foreign taxes which are credited against the US tax owed, they are operating at a loss, or they operated at a loss in previous years.


I suspect you are hired to determine your client's tax liability and he expects you to know the tax code(s) such that they pay as little tax as possible.

If the US code was simple then the tax exposure a company had would be far easier for you to determine, right? That's all I'm saying. You shouldn't have to sift through a tax code that is so complex and so open to interpretation.

Cut out loopholes and have it to where you add up the expenses, you add up the revenues and if you made a profit you pay X amount of dollars. That would streamline things a lot.


Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
quote:

GeauxxxTigers23


Not sure how you are drawing that conclusion from my statement.

The US taxes income earned anywhere in the world, whether it's Zimbabwe or Ireland. If the foreign income tax is 45% in a jurisdiction the corporation will pay no US tax on that income as it is higher than the US rate of 35%. If the tax rate in a jurisdiction is 25% then the corporation will owe another 10% in tax on that income even though it was earned abroad.

So it doesn't really encourage moving operations abroad as the US corporate tax will hit you either way.


Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
quote:

doubleb


I agree with you. Personally I think there shouldn't be a corporate income tax.


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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
7780 posts

re: Fair Tax = no more IRS problems
quote:

The US taxes income earned anywhere in the world, whether it's Zimbabwe or Ireland. If the foreign income tax is 45% in a jurisdiction the corporation will pay no US tax on that income as it is higher than the US rate of 35%. If the tax rate in a jurisdiction is 25% then the corporation will owe another 10% in tax on that income even though it was earned abroad. So it doesn't really encourage moving operations abroad as the US corporate tax will hit you either way.


Question, If a corporation makes a product in the US and ships it overseas, how is that taxed compared to if they make a product overseas and it is sold over seas???

TIA


GeauxxxTigers23
USA Fan
TeamBunt General Manager
Member since Apr 2013
26930 posts
Online

re: Fair Tax = no more IRS problems
quote:

Not sure how you are drawing that conclusion from my statement.


You'll have to excuse me. I am admittedly ignorant on the subject.

quote:

So it doesn't really encourage moving operations abroad as the US corporate tax will hit you either way.


So if the corporate tax rate wasn't so high then less corporations would move overseas right. I mean, why go to a country with a higher corporate tax rate than the one you're based out of? Aside from labor costs of course.


TrueTiger
LSU Fan
Chicken's most valuable
Member since Sep 2004
13507 posts

re: Fair Tax = no more IRS problems
quote:

corporations use accountants and loopholes to pay no taxes


Zoom out of this frame and you see the bigger picture that any tax paid by a company is built into the price of the goods and services that they provide.

So ultimately the people are paying the taxes, the corporation just
gets to do part of the accounting work for it.

So, if the people are paying anyway why not simplify it with the FairTax?
Our current system reminds me of a Rube Goldberg machine.
Image: http://upload.wikimedia.org/wikipedia/commons/3/31/Rube_goldberg_machine.jpg
This post was edited on 5/23 at 11:21 am


BlackHelicopterPilot
LSU Fan
Top secret lab
Member since Feb 2004
34716 posts

re: Fair Tax = no more IRS problems
quote:

So if the corporate tax rate wasn't so high then less corporations would move overseas right. I mean, why go to a country with a higher corporate tax rate than the one you're based out of? Aside from labor costs of course.




Complex calculus. Many simply point and say "tax avoidance". But, labor costs, regulatory ease, land acquisition relief, labor laws (health care?, hours?, vacation?, etc) all factor in.

Also, access to markets: Suppose one wants into China. China says "open a facility and we let you sell here"

I'd suggest that TAX is one of the least of the mitigating factors.


Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
35% US tax no matter where it is made, but any foreign income tax paid will be subtracted from the US tax liability.

This gets in the area of transfer pricing as well which is extremely complex. Most large companies submit a form detailing their transferring pricing ahead of time to the IRS and the foreign tax jurisdiction to have it approved ahead of time so they are not hit with an unexpected tax burden in the future.


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baybeefeetz
Eastern Michigan Fan
the now
Member since Sep 2009
16123 posts

re: Fair Tax = no more IRS problems
quote:

I-ay upport-say is-thay


T H ! $
This post was edited on 5/23 at 11:03 am


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GeauxxxTigers23
USA Fan
TeamBunt General Manager
Member since Apr 2013
26930 posts
Online

re: Fair Tax = no more IRS problems
quote:

I'd suggest that TAX is one of the least of the mitigating factors


OK, I'll buy it.

quote:

But, labor costs, regulatory ease, land acquisition relief, labor laws (health care?, hours?, vacation?, etc) all factor in.


But these seem like they are mostly imposed by the government.

quote:

Also, access to markets: Suppose one wants into China. China says "open a facility and we let you sell here"


I see nothing wrong with this.


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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
7780 posts

re: Fair Tax = no more IRS problems
quote:

Zoom out of this frame and you see the bigger picture that any tax paid by a company is built into the price of the goods and services that they provide.


Exactly, and exactly why any company would want to LOWER the costs so that they can be more competitive.

If you pay lower taxes then you have a lower cost to do business.


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Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
quote:

GeauxxxTigers23


A lower tax rate in the US would encourage more corporations to incorporate in the US.

There are a myriad of reasons to have operations in other countries aside from US tax issues.


doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
7780 posts

re: Fair Tax = no more IRS problems
quote:

There are a myriad of reasons to have operations in other countries aside from US tax issues


Exactly, taxes are only part of the equation.


GeauxxxTigers23
USA Fan
TeamBunt General Manager
Member since Apr 2013
26930 posts
Online

re: Fair Tax = no more IRS problems
quote:

A lower tax rate in the US would encourage more corporations to incorporate in the US.

There are a myriad of reasons to have operations in other countries aside from US tax issues


I'm not trying to argue with you. You seem to know the laws so I'm just asking questions.


Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
I think one of the best taxation models we have in the world today is Hong Kong, and they are seeing an economic boom because of it. If the US modeled our tax code off of theirs I would be ecstatic.


BlackHelicopterPilot
LSU Fan
Top secret lab
Member since Feb 2004
34716 posts

re: Fair Tax = no more IRS problems
quote:

I think one of the best taxation models we have in the world today is Hong Kong, and they are seeing an economic boom because of it. If the US modeled our tax code off of theirs I would be ecstatic.



Can you highlight it?

Not asking for a phd level course


Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
Didn't mean to sound argumentative in my response, sorry about that.


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Beerinthepocket
LSU Fan
Dallas
Member since May 2011
639 posts

re: Fair Tax = no more IRS problems
The highest tax rate in the Hong Kong on any form of income personal or corporate is around 17.5%.

Lowest is 0% on interest, dividends, and capital gains.

Lowest personal income tax is
0% for the those under a certain income threshold. There are 2 levels above that, 2% and the 17ish% bracket.

There is no payroll tax. Everyone is forced to put 5% of income into a 401k type plan.

There is no VAT.

Google it, it's a quite interesting case study on what fiscally conservative country can accomplish with low tax rates. The top 5ish percent of earners still pay over 50% of all income tax but they are ok with it because of the low rates.

And with that my time doing cardio in the gym is up, good talk folks. First civil thread in the PT that I've seen in a while.



BlackHelicopterPilot
LSU Fan
Top secret lab
Member since Feb 2004
34716 posts

re: Fair Tax = no more IRS problems
quote:

Beerinthepocket


Thank you



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