Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
5% and 10% aren't actually the effective amounts. The big point there is that they do not account for foreign tax credits. The actual percentage itself is arbitrary anyway. It makes little sense to go by what sounds good. Anyway I hope they don't do this. It just takes attention away from the messed up tax laws for a few more years. If they're forced to address the inherent problems prior to any negotiation, something might actually be done. A couple of the links I like on the 2004 one show up behind pay-walls, but you could google for the WSJ assessment. Its stated purpose was unfulfilled, and we're still left with problematic policy, because the process was merely reset. The other part of it is that just monkeying with the numbers isn't enough, if whatever final rate is not actually enforceable and they are unable to control the effective rate. My other issue is that this doesn't affect companies in an equivalent fashion. It places an enormous divide between small to medium and large companies, as the former cannot afford the accounting staff and lawyers to support such a tax plan. In that sense it contributes to some of our other problems including the nonsense that set up the mortgage crisis (goes back pretty far, Glass-Stieglitz was repealed in the 90s).
Quote:
Originally Posted by SpamSandwich
And THAT is why the rate must be permanently reduced.
I don't think that alone would fix it. Some of the really small countries that lack much in the way of infrastructure can always go lower in an attempt to grow their financial markets.
1. “Not being used as expected” neither means nor implies “not used”.
2. Congress doesn’t have the first clue about how business operates.
As any software programmer knows, the user will always find a way to use software in an unexpected way. That doesn't imply a lack of knowledge on the part of the programmer, just the impossibility of thoroughly predicting people.
1. “Not being used as expected” neither means nor implies “not used”.
2. Congress doesn’t have the first clue about how business operates.
I forgot to address this one. You might want to read a bit more on that. At the time these companies lobbied for the same things suggesting that it would free up funds for infrastructure investments. It's a matter of what they said they would do vs what actually happened. As for Congress, I do not believe their claims of ignorance on most things.
It is an excellent question: why does the United States get to tax money coming from sales that happened in other countries? Is there a justification for this other than "just because we can".
No way. Corps should not pay less than the middle class tax payer. 10-15% is more appropriate.
The average middle class tax payer pays about a 12% effective tax rate. But if they are married, have kids and own a home with a mortgage, that rate drops to 5% pretty quick. (I'm only talking Federal income tax here.)
Besides, if to add the 5% on top of the foreign tax that Apple already paid, they will end up paying around 10-15% on that money. The same as the middle class tax payer.
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
You really don't understand American politics do you
It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother.
There's nothing against double taxation. In fact many things you purchase have been taxed quite a few times.
But not by the same entity on the same money. Your income is taxed by the Fed and State (and sometimes Local). But that's not double taxation. That's a money grab by 2 (or more) different entities.
If you give over $15,000 of money that you already paid tax on to a friend, that friend will have to paid tax on it (a gift tax). That's not double taxation because 2 different people are paying the tax on the same money. It would be double taxation if you also had to pay the gift tax for giving away your already taxed money.
Double taxation is when the same person if taxed twice by the same entity for the same money. Which is the case when the Fed taxed the money when it was corporate profit and then again as a dividend to the shareholders. It can be argue that the shareholders owns the corporation and thus paid the corporate tax on the money that they later received as a dividend, that they also had to pay tax on. Which is a valid argument as to why dividend should not be taxed as regular income but at lower rate, even if it's not long term capital gains. Either that, or make it so that the corporation do not have to pay tax on the money they give to the shareholders in the form of a dividend.
The only other thing I can think of that comes remotely close to a double taxation is when the State tax my income when I receive it and then again when I spend it in the State and pay a sales tax. But it can be argue that the sales tax is a tax on the value of the goods and not the money itself.
Read the above link. Apple has to get their money into the U.S. before July 1, 2014 to avoid paying 30% tax penalty for having U.S money in foreign banks!
The U.S. is cracking down on anyone who has more than 50k on an offshore account.
use your mind and think what will happen to our economy in the U.S.???
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
Quote:
Originally Posted by SpamSandwich
Agree on all points.
I disagree with them on one point, which many people in this thread also continue to mistakenly say. "why should companies be taxed again when they move those money back?". They are in no way moving the money "back" as it was never in the US to begin with. If a foreign company like Toyota wanted to invest $100 billion in their US operations; do you think the US Government is going to tax them just to bring that money to our shores? Nope, in fact they may even be given incentives to do so by reducing or deferring some of the taxes on assets, such as plants and equipment. The whole notion that because Apple (or any company) is headquartered in the US, that bringing foreign profits into the US is considered bringing the money back to the US is ignorant.
Quote:
Originally Posted by Richard Getz
You really don't understand American politics do you
It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother.
I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.
I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.
-PopinFRESH
First post was serious. Saying the only person you know in American politics is the only sane person you know in American politics, implying that person is the only sane one, is, well, stupid! You can't evaluate an only statement without knowing the any or all.
Second was humorous (noted by the smile). Then (s)he goes on by noting (s)he does understand why the high tax rate. Our politics (if (s)he knew anything about our politics) on taxes is never what is fair, but what they can get to tax and spend. Again, if you don't know any politicians, why would you think to understand our politics?
I would like a tax holiday too. Since that is unlikely there is no reason why corps should get one. Simple solution levy the tax regardless of whether they repatriate the earnings. That is about the only way we can unilaterally eliminate the incentive to leave earnings overseas.
As a result, every major US corporation will pack up and move their headquarters overseas.
Read the above link. Apple has to get their money into the U.S. before July 1, 2014 to avoid paying 30% tax penalty for having U.S money in foreign banks!
Did you read the link? It says there's a 30% tax on future transfers if institutions don't comply with the rulings for transparency of account ownership. It has nothing to do with forcing money into a different place. They just want to know where money is going and who's putting it there. Also, it was reported that Apple's foreign cash is held in US financial institutions, not the other way round:
75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
They can basically claim anything that they genuinely owed by foreign tax credit. If they didn't file a return in that country and thus "overpaid", that could be scrutinized, although I don't think it happens much in practice. As you point out it's also a credit rather than a general write-off in the sense of operating costs, so it is applied directly against their actual liability.
The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
But why does the U.S. government care whether Apple has paid the full tax rates of a different country?
But why does the U.S. government care whether Apple has paid the full tax rates of a different country?
They don't necessarily care in the way you seem to be suggesting(?). As I mentioned there's a tax credit that ensures they don't pay anything over the tax rate of the US by allowing credits directly against what they would otherwise owe. I worded it that way to distinguish it from write offs such as operating expenses.
Comments
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
5% and 10% aren't actually the effective amounts. The big point there is that they do not account for foreign tax credits. The actual percentage itself is arbitrary anyway. It makes little sense to go by what sounds good. Anyway I hope they don't do this. It just takes attention away from the messed up tax laws for a few more years. If they're forced to address the inherent problems prior to any negotiation, something might actually be done. A couple of the links I like on the 2004 one show up behind pay-walls, but you could google for the WSJ assessment. Its stated purpose was unfulfilled, and we're still left with problematic policy, because the process was merely reset. The other part of it is that just monkeying with the numbers isn't enough, if whatever final rate is not actually enforceable and they are unable to control the effective rate. My other issue is that this doesn't affect companies in an equivalent fashion. It places an enormous divide between small to medium and large companies, as the former cannot afford the accounting staff and lawyers to support such a tax plan. In that sense it contributes to some of our other problems including the nonsense that set up the mortgage crisis (goes back pretty far, Glass-Stieglitz was repealed in the 90s).
And THAT is why the rate must be permanently reduced.
I don't think that alone would fix it. Some of the really small countries that lack much in the way of infrastructure can always go lower in an attempt to grow their financial markets.
Thanks for that. It proves two things.
1. “Not being used as expected” neither means nor implies “not used”.
2. Congress doesn’t have the first clue about how business operates.
As any software programmer knows, the user will always find a way to use software in an unexpected way. That doesn't imply a lack of knowledge on the part of the programmer, just the impossibility of thoroughly predicting people.
Quote:
Thanks for that. It proves two things.
1. “Not being used as expected” neither means nor implies “not used”.
2. Congress doesn’t have the first clue about how business operates.
I forgot to address this one. You might want to read a bit more on that. At the time these companies lobbied for the same things suggesting that it would free up funds for infrastructure investments. It's a matter of what they said they would do vs what actually happened. As for Congress, I do not believe their claims of ignorance on most things.
Hanlon's razor
No way. Corps should not pay less than the middle class tax payer. 10-15% is more appropriate.
The average middle class tax payer pays about a 12% effective tax rate. But if they are married, have kids and own a home with a mortgage, that rate drops to 5% pretty quick. (I'm only talking Federal income tax here.)
Besides, if to add the 5% on top of the foreign tax that Apple already paid, they will end up paying around 10-15% on that money. The same as the middle class tax payer.
There's nothing against double taxation. In fact many things you purchase have been taxed quite a few times.
Nada, zip, zilch, nil, zero, devoid of anything.
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
Well giving your don't follow American politics, that's not saying much is it?
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
You really don't understand American politics do you
It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother.
There's nothing against double taxation. In fact many things you purchase have been taxed quite a few times.
But not by the same entity on the same money. Your income is taxed by the Fed and State (and sometimes Local). But that's not double taxation. That's a money grab by 2 (or more) different entities.
If you give over $15,000 of money that you already paid tax on to a friend, that friend will have to paid tax on it (a gift tax). That's not double taxation because 2 different people are paying the tax on the same money. It would be double taxation if you also had to pay the gift tax for giving away your already taxed money.
Double taxation is when the same person if taxed twice by the same entity for the same money. Which is the case when the Fed taxed the money when it was corporate profit and then again as a dividend to the shareholders. It can be argue that the shareholders owns the corporation and thus paid the corporate tax on the money that they later received as a dividend, that they also had to pay tax on. Which is a valid argument as to why dividend should not be taxed as regular income but at lower rate, even if it's not long term capital gains. Either that, or make it so that the corporation do not have to pay tax on the money they give to the shareholders in the form of a dividend.
The only other thing I can think of that comes remotely close to a double taxation is when the State tax my income when I receive it and then again when I spend it in the State and pay a sales tax. But it can be argue that the sales tax is a tax on the value of the goods and not the money itself.
Read the above link. Apple has to get their money into the U.S. before July 1, 2014
to avoid paying 30% tax penalty for having U.S money in foreign banks!
The U.S. is cracking down on anyone who has more than 50k on an offshore account.
use your mind and think what will happen to our economy in the U.S.???
Rand Paul at it again? I am not American and dont follow America politics much either. But he is the only sane American politician that i know.
I also dont get why it should be a high rate of 10%? Sorry for being naive, but those money were foreign profits why should companies be taxed again when they move those money back?
And if it was just a way to make more tax, shouldn't 5% be fair and enough?
Agree on all points.
I disagree with them on one point, which many people in this thread also continue to mistakenly say. "why should companies be taxed again when they move those money back?". They are in no way moving the money "back" as it was never in the US to begin with. If a foreign company like Toyota wanted to invest $100 billion in their US operations; do you think the US Government is going to tax them just to bring that money to our shores? Nope, in fact they may even be given incentives to do so by reducing or deferring some of the taxes on assets, such as plants and equipment. The whole notion that because Apple (or any company) is headquartered in the US, that bringing foreign profits into the US is considered bringing the money back to the US is ignorant.
You really don't understand American politics do you
It is about tax and spend. The corporations (and the rich) are evil and the poor need to be handed money by Big Brother.
I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.
-PopinFRESH
I can't tell if you are being serious, or sarcastic considering you quoted him twice in a row with what may seem like bi-polar sentiments.
-PopinFRESH
First post was serious. Saying the only person you know in American politics is the only sane person you know in American politics, implying that person is the only sane one, is, well, stupid! You can't evaluate an only statement without knowing the any or all.
Second was humorous (noted by the smile). Then (s)he goes on by noting (s)he does understand why the high tax rate. Our politics (if (s)he knew anything about our politics) on taxes is never what is fair, but what they can get to tax and spend. Again, if you don't know any politicians, why would you think to understand our politics?
I would like a tax holiday too. Since that is unlikely there is no reason why corps should get one. Simple solution levy the tax regardless of whether they repatriate the earnings. That is about the only way we can unilaterally eliminate the incentive to leave earnings overseas.
As a result, every major US corporation will pack up and move their headquarters overseas.
Did you read the link? It says there's a 30% tax on future transfers if institutions don't comply with the rulings for transparency of account ownership. It has nothing to do with forcing money into a different place. They just want to know where money is going and who's putting it there. Also, it was reported that Apple's foreign cash is held in US financial institutions, not the other way round:
http://qz.com/86740/the-seven-craziest-findings-in-the-us-investigation-of-apples-tax-avoidance-practices/
75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
75-100% of Apple's $102b off-shore cash is held in US financial institutions and managed by Braeburn Capital in Nevada. The notion of repatriating digital cash is just semantic. They just wouldn't be allowed to use the cash in the US before paying the tax on it. The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
They can basically claim anything that they genuinely owed by foreign tax credit. If they didn't file a return in that country and thus "overpaid", that could be scrutinized, although I don't think it happens much in practice. As you point out it's also a credit rather than a general write-off in the sense of operating costs, so it is applied directly against their actual liability.
The only reason the repatriation tax is so high for Apple is because they have paid so little tax outside the US. If they'd paid the full tax rates outside the US, their repatriation tax would be closer to 10%.
But why does the U.S. government care whether Apple has paid the full tax rates of a different country?
But why does the U.S. government care whether Apple has paid the full tax rates of a different country?
They don't necessarily care in the way you seem to be suggesting(?). As I mentioned there's a tax credit that ensures they don't pay anything over the tax rate of the US by allowing credits directly against what they would otherwise owe. I worded it that way to distinguish it from write offs such as operating expenses.
But why does the U.S. government care whether Apple has paid the full tax rates of a different country?
Because that's how the tax system works?