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Started By
Message
How stupid is this Tax?
Posted on 2/23/13 at 10:36 am
Posted on 2/23/13 at 10:36 am
LINK
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.
Posted on 2/23/13 at 11:17 am to Vols&Shaft83
God bless America
ETA: Uncle Sam always wants his hand in something
ETA: Uncle Sam always wants his hand in something
This post was edited on 2/23/13 at 11:18 am
Posted on 2/23/13 at 11:47 am to Vols&Shaft83
About as stupid as retaliatory taxes.
Posted on 2/23/13 at 12:20 pm to Vols&Shaft83
Switzerland's corporate tax rate is not 8.5%. According to KPMG it's 21%.
Posted on 2/23/13 at 1:22 pm to Vols&Shaft83
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.
Posted on 2/23/13 at 2:39 pm to Layabout
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.
Posted on 2/23/13 at 3:13 pm to Vols&Shaft83
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.
If I go work in another country, I might be subject to taxation here at home depending on the duration of my stay there.
Posted on 2/23/13 at 4:35 pm to Powerman
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.
Posted on 2/23/13 at 5:58 pm to Teddy Ruxpin
Apple is waiting for a tax holiday as the bulk of its $137 billion in cash is overseas
Posted on 2/24/13 at 9:40 pm to Vols&Shaft83
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.
Posted on 2/25/13 at 12:15 am to ThaBigFella
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.
Apple is waiting for a tax holiday as the bulk of its $137 billion in cash is overseas
Posted on 2/25/13 at 6:04 am to Poodlebrain
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.
Posted on 2/25/13 at 9:50 am to Poodlebrain
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".
Posted on 2/26/13 at 8:04 am to Tiger at Law
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
Posted on 2/26/13 at 11:34 am to Vols&Shaft83
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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