Posted on 08/25/2014 8:43:05 AM PDT by BenLurkin
This has to do with two elements of the American tax system.
For one, the U.S. has the highest statutory corporate tax rate in the OECD, a combined rate of about 39 percent when taking into account federal and state taxes. Effective tax rates are harder to come by, but a report from the Tax Foundation found that the U.S. had the highest marginal effective corporate tax rate among developed country groups. It can be profitable then for U.S. firms to move offshore to reduce tax liabilities.
But there is another factor at play here as well. Most developed economies use what’s known as a “territorial” tax system. Under such an approach, income is only taxed when it’s earned domestically. So a U.K.-headquartered company will only pay U.K. taxes on its British income. The United States, however, employs a hybrid between a territorial and worldwide system. U.S. citizens and corporations are required to pay U.S. taxes on all income – even if that income is earned outside of the country. (The tax system provides credits for foreign taxes paid, which reduce or eliminate double taxation of income.) But foreign income is only taxed upon repatriation – when it is brought back to American shores. At this point the incentives should be fairly clear – companies have every reason to avoid bringing their earnings back to the U.S. if they were earned in a lower corporate tax rate country....
Simply put, a worldwide tax system puts American firms at a significant competitive disadvantage
(Excerpt) Read more at forbes.com ...
Why is there a corporate tax rate all? Treat them like the individuals they claim to be.
Corporations are owned by the stockholders. Stockholders pay taxes when they receive dividends or realize a gain on the sale of the stock.
Taxation of corporations is double-taxation.
But low-information types think that's a good thing.
Reagan taught us the consumer pays all taxes. including the business tax that is passed on to the consumer in the form of higher prices.
BTW, would elimination of the business tax then lower consumer prices by 39 %?
As I said regarding Walgreeens, save your outrage for the companies who DON’T follow the law.
Great example :
Stephen Moore nukes MSNBC Chris Hayes on rich liberals wanting to pay higher taxes (7/8/12)
Can’t have it both ways.
“But low-information types think that’s a good thing.”
:::::::::
Still amazes me at my years, that there are people that are the “have nots” and are NOT willing to work for success yet they can criticize and demonize those that are WILLING TO WORK HARD for a decent life style.
Those are the LOSERS in America that this country still insists on supporting.
Where are the Freepers who vowed to boycott Walgreens when they announced their move overseas?
i have said that the problem isn’t inversion, it’s a government that is so greedy with taxation that it drives corporations to such a desperate measure
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.
Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934).
>> There shouldn’t be a tax on corporations at all. It’s double-taxation.
Too many too ignorant to understand the impact.
how about eliminating the merger phantom tax income penalty.
If a corporation merges, ordinary people are taxed on the phantom income of the new company stock value.
50 or 60 years ago, here in Pennsyltucky when Big Steel was cranking away in its heyday, corporations paid HUGE taxes. Particularly on the state and local level. These were used to fund public schools, public parks, amenities like the zoo, the museum, etc.
Of course that could only go on so long as the US had a near-monopoly on world production. So long as the corporations could sell all their product at any price they dictated, they did not really care what their tax rate was.
Cannot happen in a competitive world. Although to old timers they still believe it was a Golden Age (’...back then the admission to the zoo and museum was FREE....because corporations paid their FAIR SHARE!....yadda yadda)
You have no idea what you are talking about.
How many LLCs have you formed?
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