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To: dark_lord
3rd, when US corporations move offshore to avoid taxes, they are expecting the best of two worlds.

I chose Stanley Tools as an example to avoid that rebuttal. The tools that Stanley makes in the US are taxed, the profits on tools manufactured here are taxed. What Stanley was trying to avoid was paying taxes on goods made overseas and sold overseas. A wrench made in China being sold to a worker in Germany resulted in the profit being taxed in the US. Multinationals like to make foreign subsidiaries - like a whole company in China that does nothing but manufacture tools with Stanley's name on it.

A fine example of that was when IBM was going a great job around the world, they had an office in South Africa. Due to the government giving endless grief to companies doing business in South Africa during the aparteid years, IBM spun off a business called SBM and the new company employees still could receive IBM training and benefits, but the new company didn't have a US nexus so they didn't have to fork over any portion of the profits to the US.

94 posted on 07/29/2003 8:33:17 AM PDT by Dr Warmoose
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To: Dr Warmoose
Yes, there is an issue on companies paying taxes on goods made here and sold overseas. The normal response is that they build a factory overseas near their market and sell there. This reduces shipping costs and can make them more competitive anyway. Does that cost some US jobs? Yes, while making the company more competitive. But this is not the kind of situation that concerns me. I am more concerned with a situation like Accenture.

Accenture is a multinational consulting firm. However, they do a ton of business in the US. By incorporating in Bermuda they avoid the US taxation structure, yet make BILLIONS of dollars doing services in the US. One can argue that we should dump the corporate income tax structure entirely, but until we do, in effect Accenture is benefiting from the US infrastructure but avoiding paying for it.

125 posted on 07/29/2003 9:25:25 AM PDT by dark_lord (The Statue of Liberty now holds a baseball bat and she's yelling 'You want a piece of me?')
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