Obama pushes to stop corporate overseas tax moves


#1

*The Obama administration is urging Congress to act swiftly to curtail a growing trend in which U.S. corporations reorganize overseas with foreign entities in part to trim their tax bills back home.

Treasury Secretary Jacob Lew told both House and Senate leaders in a letter that such deals, known as inversions, “hollow out the U.S. corporate income tax base,” and Congress should immediately enact legislation retroactive to May that stops the practice.

“We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes,” Lew said in the letter dated Tuesday.*Arizona Daily Star


#2

If not for the high corporate taxes in this country they wouldn’t be doing this. The net effect of a law like this is these companies will move everything to a foreign country costing 10s of thousands of people their jobs,


#3

Exactly. Whining that it’s not fair and then try to penalize them isn’t going to do much to encourage them to stay in the US.


#4

Simple, stop taxing so much. The govt needs to learn to live within its means, and cut spending.

Corporations don’t move entire facilities and headquarters, and all the adjacent logistical nightmares, because it’s fun to do so. They are doing so because the costs of remaining are ridiculously high.


#5

They cant compete in the world market when they are paying higher taxes than their competitors.


#6

This is only one more example of their philosophy that everything belongs to the government and allowing you to keep some of what you earn is a handout.

The US is the only major country that taxes a corporation on the income it earns abroad. They still have to pay taxes to the country where the income was earned and then pay again if they move the profits back to the US. Any company that wants to sell outside the US is virtually forced to keep reinvesting profits outside the US rather than creating jobs here.

This is phony rhetoric trying to sound populist while actually hurting the job prospects of people in the US that need them.


#7

Oh please. It is a complete myth that our corporate taxes are one of the highest in the world. There are so many loopholes that most companies pay far, far less than the eye-popping numbers FOX News likes to throw out. Heck, General Electric had a year where they paid no corporate taxes :shrug:.

Offshore accounts are just capitalistic greed.


#8

How many corporate tax returns a year so you prepare?

If the taxes aren’t lower why would they move?


#9

If they are a publicly traded company, one could argue they go through the hassle of moving the company because they have a fiduciary duty to the stock-holders to do so. Once a means of running the company at a much lower cost is identified, it is pretty hard to argue with continuing to run the company at the higher cost. Particularly, if there isn’t some kind of substantial risk in going the lower cost route.


#10

What you’re pointing out is crony-capitalism. Not capitalism. The pursuing favors for one company over another, GE for example through their support for one branch of one of the major parties. Green energy subsidies and tax breaks etc. Representatives from both parties do this, part of the inside-the-beltway methodology. The ‘elites’ of the establishment of parties on both sides.

Some corporations pay considerable amounts in taxes. The loopholes are put in the law by our representatives, supposedly because each of those tax breaks is in our, the public’s, best interests. So, if your company that doesn’t have the ear of a representative to give you a break, or you’re not willing to play that game, or pay to play, or you’re one of the poster children a party is trying to distract the public by labeling evil— than moving off shore is a quite logical, again if you’re publicly traded perhaps legally required, move to make.


#11

=SMGS127;12189225]Oh please. It is a complete myth that our corporate taxes are one of the highest in the world. There are so many loopholes that most companies pay far, far less than the eye-popping numbers FOX News likes to throw out. Heck, General Electric had a year where they paid no corporate taxes :shrug:.

This comment misses the point that the reason WHY there are so many off-shore accounts is because of the high US corporate tax rate.

Also, I’d trust FOX over any other Western news outlet.

Offshore accounts are just capitalistic greed.

Were it not for those, thousands if not millions of Americans would be out of work because instead of paying employees, companies would be sending all that dough to the federal government, where much of it would undoubtedly be wasted.


#12

So why isn’t there an influx of overseas companies that abandon incorporation in their countries for tax purposes and set up shop here?


#13

I was somewhat amused on being lectured about getting my information from Fox-in the last 30 plus years I have done thousands of corporate tax returns. Cant recall ever going to Fox for help.:slight_smile:


#14

Even you don’t believe this. How is this greed if there are no tax savings? Any well managed company would stay and exploit all those loopholes if that cost less than a tax inversion.

The reason General Electric paid no federal income tax is because they had a massive loss during the financial panic of 2008-2009 and they were mostly a financial company at that time. The tax loss carryforward is available to all companies or more of them would go broke in down years if they paid tax only on good things and ignored bad things.

I am still using up my capital losses from back then because the $3000 maximum annual offset has not changed since the 1970’s. It is one of the items that was not indexed for inflation and is a barrier to capital formation that produces jobs.


#15

Corporations shouldn’t pay income taxes. Their income is double taxed. Once when they earn it, and again when they pass it on to their shareholders.


#16

estesbob. Is that true for private corporations as well? Sorry, not sure how they work-- but would it be the same type of thing? The corporation pays the tax and than the private owners pay tax again on whatever profit distribution comes to them?

I’m assuming what you meant for a publicly traded corp is that the corporation pays tax on the businesses profit, then the stockholders pay taxes again on their share of that profit?


#17

It is true for “C” Corps. It is not true for S corps whose income flows directly to the shareholders personal returns. Most small corporations are “S” corps. Almost all large Corporations are “C” corps.

The double taxation for a “C” corps occurs when the dividends it pays are taxed again on the shareholders tax return. Dividends are not tax deductible for “C” corps.


#18

You do see the inherent contradiction in your post, right?

If it’s a myth that our rates are one of the highest in the world, then why are there offshore accounts? These are contradictory points.


#19

In truth, businesses don’t pay taxes, they only collect them. A tax on a business is really a tax on the customers, vendors, employees, and/or owners of that business.


#20

Then why would corporations care what their tax rate is?


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