Current Events > Large Companies Oppose Idea for Taxing Foreign Profits

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SK8T3R215 08/29/17 9:41:26 AM #1:	https://www.wsj.com/articles/large-companies-oppose-idea-for-taxing-foreign-profits Congressional Republicans are trying to write new rules for taxing foreign profits of U.S. corporations, and a group of large, influential companies is warning against one prominent option. Under current law, companies owe the full 35% corporate-tax rate on their world-wide earnings and have to pay it on any profits they bring back to the U.S. That system encourages companies to book profits overseas and leave them there. The issue is often a flashpoint in debates over changing the tax code. Republicans want to lower the corporate-tax rate and let companies bring future global profits home without paying U.S. taxes on top of foreign taxes. They are searching for a way to do that without giving companies an incentive to move more operations and profits to countries with far lower taxes. One alternative Republicans are considering is a minimum tax on those profits. But such a tax would have “unintended and adverse consequences,” the business group, which includes companies such as Eli Lilly & Co. and United Parcel Service Inc., told top lawmakers this month in a previously undisclosed policy paper. As part of that overhaul, Republicans want to exempt foreign corporate income from U.S. taxes to a large extent. Other countries, including the U.K., have shifted to similar systems in recent years and Republicans want to follow that trend. The 35% rate would come down and the minimum rate would be set below the new U.S. corporate tax rate. Republicans may also be considering other rules beyond a minimum tax, and they haven’t made any final decisions. A minimum tax would act as a “safety net” against companies trying to pay little or no tax on some foreign income, said Ed Kleinbard, a tax law professor at the University of Southern California. “The United States does not encourage competitiveness when it simply subsidizes international tax avoidance". But the alliance argues that a minimum tax would focus too much on U.S.-based companies and that the rules wouldn’t match other how other major countries treat their home companies. A minimum tax, the alliance contends, would give foreign-based firms an advantage. Under the current system, U.S. companies get tax credits for payments to foreign governments and only pay the difference between lower foreign rates and the U.S. rate if they repatriate profits. The system encourages U.S. companies to book profits abroad and leave them there. They can often pay the same tax rates outside the U.S. as their foreign competitors do, but they can’t move cash freely around the world or distribute it to shareholders without triggering the need to pay U.S. taxes. To companies, that is a significant problem and it drives their dissatisfaction with the current system. Eliminating the tax on foreign profits would allow U.S. companies to bring future foreign profits home without paying U.S. taxes. But that kind of system would give companies a bigger incentive to shift profits abroad because they could reap the benefits of lower foreign tax rates. Lower U.S. corporate-tax rates would reduce that incentive, but wouldn’t remove it. The countries that use tax systems Republicans want to emulate allow their home companies to bring back cash with little or no tax. They use a variety of rules to prevent companies from seeking to pay less tax by moving operations or profits abroad, but generally don’t have minimum taxes on active foreign profits. The basic architecture of the GOP plans calls for lowering tax rates and removing tax breaks, which would raise taxes on low-tax industries such as pharmaceuticals and lower them for higher-taxed retailer. Satisfying high-rate domestic companies and low-rate multinationals is one of the challenges facing lawmakers. --- New York Knicks, New York Jets, New York Yankees. <cite>SK8T3R215 posted [p:885648974] in Large Comp... [t:75719888]...</cite> <quote>https://www.wsj.com/articles/large-companies-oppose-idea-for-taxing-foreign-profits Congressional Republicans are trying to write new rules for taxing foreign profits of U.S. corporations, and a group of large, influential companies is warning against one prominent option. Under current law, companies owe the full 35% corporate-tax rate on their world-wide earnings and have to pay it on any profits they bring back to the U.S. That system encourages companies to book profits overseas and leave them there. The issue is often a flashpoint in debates over changing the tax code. Republicans want to lower the corporate-tax rate and let companies bring future global profits home without paying U.S. taxes on top of foreign taxes. They are searching for a way to do that without giving companies an incentive to move more operations and profits to countries with far lower taxes. One alternative Republicans are considering is a minimum tax on those profits. But such a tax would have “unintended and adverse consequences,” the business group, which includes companies such as Eli Lilly & Co. and United Parcel Service Inc., told top lawmakers this month in a previously undisclosed policy paper. As part of that overhaul, Republicans want to exempt foreign corporate income from U.S. taxes to a large extent. Other countries, including the U.K., have shifted to similar systems in recent years and Republicans want to follow that trend. The 35% rate would come down and the minimum rate would be set below the new U.S. corporate tax rate. Republicans may also be considering other rules beyond a minimum tax, and they haven’t made any final decisions. A minimum tax would act as a “safety net” against companies trying to pay little or no tax on some foreign income, said Ed Kleinbard, a tax law professor at the University of Southern California. “The United States does not encourage competitiveness when it simply subsidizes international tax avoidance". But the alliance argues that a minimum tax would focus too much on U.S.-based companies and that the rules wouldn’t match other how other major countries treat their home companies. A minimum tax, the alliance contends, would give foreign-based firms an advantage. Under the current system, U.S. companies get tax credits for payments to foreign governments and only pay the difference between lower foreign rates and the U.S. rate if they repatriate profits. The system encourages U.S. companies to book profits abroad and leave them there. They can often pay the same tax rates outside the U.S. as their foreign competitors do, but they can’t move cash freely around the world or distribute it to shareholders without triggering the need to pay U.S. taxes. To companies, that is a significant problem and it drives their dissatisfaction with the current system. Eliminating the tax on foreign profits would allow U.S. companies to bring future foreign profits home without paying U.S. taxes. But that kind of system would give companies a bigger incentive to shift profits abroad because they could reap the benefits of lower foreign tax rates. Lower U.S. corporate-tax rates would reduce that incentive, but wouldn’t remove it. The countries that use tax systems Republicans want to emulate allow their home companies to bring back cash with little or no tax. They use a variety of rules to prevent companies from seeking to pay less tax by moving operations or profits abroad, but generally don’t have minimum taxes on active foreign profits. The basic architecture of the GOP plans calls for lowering tax rates and removing tax breaks, which would raise taxes on low-tax industries such as pharmaceuticals and lower them for higher-taxed retailer. Satisfying high-rate domestic companies and low-rate multinationals is one of the challenges facing lawmakers.</quote> ... Copied to Clipboard!
SK8T3R215 08/29/17 2:36:54 PM #2:	Bump --- New York Knicks, New York Jets, New York Yankees. <cite>SK8T3R215 posted [p:885664493] in Large Comp... [t:75719888]...</cite> <quote>Bump</quote> ... Copied to Clipboard!
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Current Events > Large Companies Oppose Idea for Taxing Foreign Profits