Posted on 05/03/2009 5:11:57 PM PDT by Sub-Driver
Some business lobbyists say that raising taxes on U.S. firms’ foreign profits will make the firms a takeover target for foreign competitors. The U.S.- headquartered firms will be able to lower their global tax burden by merging with a foreign rival and transferring control of foreign subsidiaries to the foreign firm.
That’s exactly what happened in the shipping industry, after Congress in 1986 denied deferral for U.S.-based shipping firms, said Ken Kies, a tax lobbyist for Clark Consulting’s Federal Policy Group. Kies lobbied lawmakers to restore deferral benefits to the shippers as part of the 2004 law.
U.S.-flagged ships declined between 1985-2004 from 737 to 412 vessels, according to a Kies’ analysis of shipping changes published in the journal Tax Notes. Foreign shippers based in Singapore and Denmark acquired U.S. shipping firms.
A change in tax treatment of overseas income might impact whether new firms decide to locate in the U.S. or abroad. “If we repealed deferral, you’d be crazy from a tax perspective to set up a new company with current or future foreign operations in the U.S.,” said PwC’s Merrill.
Kies said Obama officials haven’t offered a convincing response to why raising taxes on foreign profits wouldn’t undercut U.S. firms’ competitiveness abroad.
“...but it’s ALL for the unions, doncha know? He’s definitely in bed with the unions!”
Now that it appears that the UAW will control both management and labor at Chrysler and GM, how long will it be before they require that ALL suppliers be unionized?
Why would capital come to this country anymore?
Creditors and investors are demonized. Bond holders are “evil and greedy.” This is what Argentina has been doing for 50 years and it go worse starting around 2002 when the country went bankrupt.
They stiffed bond holders who were mostly older Italians and Germans who bought the bonds.
That will cause corporations to move out of the country.
Thats right, they were already taxed in the host country.
If they are a foreign based company, they only have to pay taxes on what they make in the US and not overseas operations.
It will make sense for all companies to base their corporate headquarters out of the country.
Who better to talk about tax cheats than ZERO’s administration.
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