Firms Face New Tax Curbs

I'm kinda split on this...first, I don't support any form of tax increase.

Second, squirreling money away into secret accounts just screams of impropriety in one form or another.

So, how bout....scrapping the current tax code, easing federal regulation on business.

Yeah, the system is broken all right. Our tax code makes no sense at all. We have very high rates for everyone, but with special reductions based on how much a special interest can afford to buy with campaign contributions.

And does anyone wonder why there is $700B offshore? You think putting a tax on it is going to bring it back? Nope, you are just going to see the corporations pull out of America. Heck, we’re all broke, in hock and about to stifle all productive activity under the wet blanket of cap & tax. No more money to be made here.

Another great reason to adopt the FairTax. See www.fairtax.org.

Do you really think that the politicians will give up the income tax? If the FairTax (or any of its consumption-based alternatives) are adopted, the most likely situation is that the U.S. household will be faced with both the "Fair Tax" AND the income tax, in addition to payroll taxes that will likely be increased anyways due to Congress' continued raiding of Social Security funds.

The proper solution to the present Government is to freeze its expansion on all fronts, no exceptions, and to shrink it down to its Constitutional size, while sunsetting income and payroll taxes...not implementing a "fair" tax. [Whenever political groups start using the word "fair" you know something is up, since "fair" is a very loose and subjective term.]

Just remember, if paying taxes is so patriotic [something implied by Sen. Grassley's quote in the article, and Grassley is a Republican] then in order to be wholly patriotic, everyone in the United States ought to pay 110 percent of their income, wealth, etc. into the federal treasury.

President Barack Obama will flesh out a proposal included in his February budget blueprint seeking to curb the practice of parking foreign earnings in offshore tax havens indefinitely.

What's a good country to look for a job, anyone know?

They soon will be nonexistent here!

I think this is posturing, performing for the choir. Congress, especially the senate will not kill their constituents business.

Oh...believe it. Just watch them do it.

Obama just had a press conference, and made it clear he wants money that does not belong to him. And he wants it now.

Wealth is going to be confiscated.

IMHO this is simply a continuing attempt at wealth redistribution. Right now this wealth, earned by others, is parked in offshore accounts and Obama wants it, plain and simple. He is all about taking other peoples' money for his own purposes (giving it to others that have not earned it). He wants to pick the winners and the losers and determine what is “fair” in his sole opinion.

Do you really think that the politicians will give up the income tax?

NO they won't just give it up. It will take pressure from constituents to force Congress critters into accepting passage of The Fair Tax. That is the purpose of the growing grassroots movement by Americans For Fair Taxation. Each session of Congress has seen more cosponsors for The Fair Tax since it was first introduced to Congress in 1999. Last session there were 76 cosponsors. There are already 52 after only four months. Additionally states are moving towards a Fair Tax on the state level. The Missouri and South Carolina houses have recently approved Fair Tax legislation similar to the federal bill. More states accepting the Fair Tax will increase passage of the federal bill.

If the FairTax (or any of its consumption-based alternatives) are adopted, the most likely situation is that the U.S. household will be faced with both the "Fair Tax" AND the income tax, in addition to payroll taxes that will likely be increased anyways due to Congress' continued raiding of Social Security funds.

We already have both an income tax and sales tax! Corporations, like individuals, have taxes levied on their income. Those taxes and the associated compliance costs are costs businesses pass onto the consumer by embedding the taxes in the price of everything we buy, totaling almost 23%. It is essentially a sales tax. The Fair Tax will remove the embedded taxes by eliminating corporate income taxes.

Regardless of that fact, Congress would have passed a national sales tax long ago if not for one salient point. Congress critters realize the outrage they would face if imposing a national sales tax on top of the federal income tax. Politicians do not want to fact that wrath.

The proper solution to the present Government is to freeze its expansion on all fronts, no exceptions, and to shrink it down to its Constitutional size, while sunsetting income and payroll taxes...not implementing a "fair" tax.

The Fair Tax will eliminate income and payroll taxes. What you're really referring to is controlling spending. There is no reason controlling spending and addressing the income tax problem at the same time. No tax code is designed specifically to control spending however The Fair Tax will do so to some extent by tying taxation to consumption. Increased spending would require a raise in the tax rate. Consumers/taxpayers would respond by reducing their purchases. Fewer purchases would reduce the amount of tax collected. Lessening the tax collection would force Congress to lower spending. It is a fundamental point addressed by founding father and first Secretary Of The Treasury Alexander Hamilton in his Federalist Paper #21. To quote"

"It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."

Right now this wealth, earned by others, is parked in offshore accounts and Obama wants it, plain and simple.

Thank you Gabrial for your insight.

You have it pegged to a tee, my FRiend!

Wealth is going to be confiscated.

Along with personal freedom.

What Obama doesn't realize is that many American corporations have bee acquired by foreign companies. Bud lite is owned by the Belgians. Miller is owned by the South Africans, Fiat just acquired ALL OF THE ASSETS of Chrysler (which means it will build cars and the shell corp will be owned by the government and the UAW with NO production facilities). The list goes on and on. Big companies are MUCH better off selling themselves to foreign owners who operate in stable tax jurisdictions that respect private capital. The political risk in the USA has become real, thanks to our African Dictator, and capital is leaving the USA. Kiss jobs and wealth creation goodbye...

Atlas Shrugged ping

http://www.regularfolksunited.com/index.php?tab=article_view&article_id=1566

Obama’s Newest Tax Proposal is a Declaration of War on U.S. Competitiveness

Date: Monday, May 4, 2009, 12:31 PM EDT, 12:31 PM EDT from Grover Norquist

President Obama and Treasury Secretary Geithner have unveiled yet another tax hike proposal — a declaration of war on American competitiveness.

America has the highest corporate income tax rate in the developed world. The United States is tied with Japan for one very dubious honor—having the highest corporate income tax rate in the developed world. According to the OECD, the United States has a combined marginal corporate rate of nearly 40 percent. This compares very negatively to our European competitors’ average rate of 25 percent. The Republic of Ireland stands in the starkest contrast, with a corporate income tax rate of 12.5 percent. In the developing world, rates of 10 or 15 percent are commonplace.

America is the only developed country that double-taxes the international profits of our own companies. If an Irish company earns a profit in France, it pays the French corporate income tax, and nothing else. But if a U.S. company earns that same profit in France, it must pay the French corporate tax and the U.S. corporate tax (minus whatever was paid to France). So not only does the U.S. impose the highest corporate rate in the world, it makes sure that this rate is applied to both domestic and international profits. This is called a “worldwide taxation system,” and is unique to the U.S.

Recognizing the problem this creates, Congress has crafted a confusing set of exclusions, deferrals, deductions, and credits on international profits. In general, U.S. companies can avoid paying this double-tax until they repatriate the profits back to the U.S.

By seeking to take away these double-tax band-aids without lowering the corporate rate substantially or fixing the global taxation scheme, Obama’s proposal will shove jobs and capital out of America and into foreign countries. Obama’s budget and Congressional tax-writers have been clear—they want companies to pay the full corporate rate as soon as the international profit is earned. In a global economy, companies don’t have to take this lying down. It’s a relatively-simple matter for a U.S. company with an Irish subsidiary to become an Irish company with a U.S. subsidiary. The Obama plan will force thousands of companies to make this job-killing decision. Companies that export goods will soon start exporting jobs.

The U.S. should tax our companies the way the rest of the world taxes theirs—territoriality. The rest of the developed world has figured this out: if they want to retain jobs and capital in their countries, they have to adopt territoriality. This means that companies only pay corporate income tax in the country where the profit is earned. The U.S. partially tried this in 2005, when companies were allowed to repatriate deferred foreign earnings at a 5.25% rate—far lower than what they would have to pay otherwise. The result was a one-year infusion of $318 billion in capital to the United States, resulting in $17 billion in additional corporate income tax payments, and the creation of thousands of new jobs.

The U.S. needs to lower our corporate income tax rate to become more competitive. American employers are competing globally with Irish, British, German, etc. companies. It makes no sense to saddle our employers with the highest corporate rate in the world. At the very least, we need to lower our corporate tax rate to 25 percent or less. This simply begins to make our tax treatment of large employers somewhat comparable to our European competitors. When combined with territoriality, this move would begin to change the corporate tax culture in the U.S. from a jobs killer to a jobs magnet.

I have been around long enough to think this will eventually be watered down if not withdrawn OR a new tax work-around will be created. In the process, the US’s biggest corporations will pour money into the Dem party coffers (protection money) and all will be ok on both sides. Strangely silent is C. Schumer (D-Wall Street) who I predict will ride in on a white horse and somehow go to bat for the corporations, at least those contributing to HIS coffers.

Obviously, Obama talks about US jobs lost only when it has to do with Republican policies. He could not wait to get his Swindle-Us bill with e-verify and restrictions on hiring illegals removed, so he could give taxpayer money to illegals.

But if amnesty has passed under Bush, Obama would have blamed Bush for the loss of US jobs.