Repatriation of Foreign Income

Any thoughts on this? I think it's counterproductive and only encourages companies to build up more offshore money in anticipation of a repeat of the tax holiday. A less time-sensitive tax policy on foreign income should be put in place.

http://finance.fortune.cnn.com/2011/06/21/schumer-adds-new-weight-to-repatriation-tax-talks/

"...The idea is to encourage corporations keeping a collective total of more than $1 trillion parked abroad to bring it home by temporarily lowering the tax rate to about 5% from 35%. The tax receipts from that holiday then would be dedicated to an infrastructure bank that would help fund new building projects..."

You don't need to bribe rich people with low taxes. You tax the things they cannot move and which everyone needs e.g land that is not their primary home or workshop/office.

The idea is to encourage corporations keeping a collective total of more than $1 trillion parked abroad to bring it home by temporarily lowering the tax rate to about 5% from 35%

It enrages me to think that our government is considering rewarding people who are filthy rich and intentionally withholding that wealth from our economy.

Originally posted by AThousandYoung
You don't need to bribe rich people with low taxes. You tax the things they cannot move and which everyone needs e.g land that is not their primary home or workshop/office.

[b]The idea is to encourage corporations keeping a collective total of more than $1 trillion parked abroad to bring it home by temporarily lowering the tax rate to about 5% fro ...[text shortened]... ewarding people who are filthy rich and intentionally withholding that wealth from our economy.

It enrages you that the US government cannot tax money that is in a different country. I'd probably like for the US to tax the Saudi government but I fully recognize there is no justification for such an action.

It seems to make sense that it in many situations if you lower taxes, capital will flow in and governments will have new sources of revenue. This should not make you angry, it should make you realize that the answer to raising revenues isn't always just to tax at a higher and higher level.

Originally posted by quackquack
It enrages you that the US government cannot tax money that is in a different country. I'd probably like for the US to tax the Saudi government but I fully recognize there is no justification for such an action.

It seems to make sense that it in many situations if you lower taxes, capital will flow in and governments will have new sources of revenue. ...[text shortened]... ize that the answer to raising revenues isn't always just to tax at a higher and higher level.

These are American companies.

Here's a little more from

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/01/bloomberg1376-LNMK4J07SXKX01-4JJHIHRMUDNJSALNV7ONP90PSF.DTL


"The problem with a repatriation holiday is that companies haven't actually paid taxes in the countries where they earned the income, said Edward Kleinbard, a law professor at the University of Southern California.

"They are advocating for completing the circle of global aggressive tax planning under which they will pay close to no tax anywhere in the world," said Kleinbard, who was chief of staff at the congressional Joint Committee on Taxation.

In 2004, Congress allowed companies to bring money home at a 5.25 percent tax rate as long as they submitted plans for domestic investment. Studies later found that much of the money was used to buy back shares and pay dividends. The Joint Committee on Taxation estimates that a new repatriation holiday would encourage companies to move more profits offshore in anticipation of another holiday."

Originally posted by quackquack
It enrages you that the US government cannot tax money that is in a different country. I'd probably like for the US to tax the Saudi government but I fully recognize there is no justification for such an action.

It seems to make sense that it in many situations if you lower taxes, capital will flow in and governments will have new sources of revenue. ...[text shortened]... ize that the answer to raising revenues isn't always just to tax at a higher and higher level.

I think "taxing money" is a foolish concept. Money is an arbritrary thing of no inherent value. Tax wealth, not money. Specifically, tax capital, or "financial wealth", or whatever it's called these days.

Originally posted by AThousandYoung
I think "taxing money" is a foolish concept. Money is an arbritrary thing of no inherent value. Tax wealth, not money. Specifically, tax capital, or "financial wealth", or whatever it's called these days.

Do you mean tax on the basis of the monetary value of assets, not the monetary value of transactions? Just trying to understand. If so, it's a bigger topic.

Originally posted by JS357
Any thoughts on this? I think it's counterproductive and only encourages companies to build up more offshore money in anticipation of a repeat of the tax holiday. A less time-sensitive tax policy on foreign income should be put in place.

http://finance.fortune.cnn.com/2011/06/21/schumer-adds-new-weight-to-repatriation-tax-talks/

"...The idea is to encour ...[text shortened]... n would be dedicated to an infrastructure bank that would help fund new building projects..."

Mind blowing concept - stop punishing people for doing good things.

Originally posted by Wajoma
Mind blowing concept - stop punishing people for doing good things.

Quote:

As repatriation skeptics, including the Obama administration, are only too well aware, this has been tried before, in 2004, with "no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions," said Obama's former Assistant Treasury Secretary for Tax Policy, Michael Mundanca, in a blog post in March (sfg.ly/dWTVh8).

More than 800 U.S. multinationals took the earlier tax holiday, courtesy of the 2004 American Jobs Creation Act. The resulting repatriation amounted to approximately $360 billion, $19 billion of which went to the U.S. Treasury.

The rest of it? Not jobs, not domestic reinvestment. According to the National Bureau of Economic Research, up to 92 cents of every dollar repatriated went to dividends, stock buybacks - nominally forbidden by the law - and shoring up balance sheets.

"Most of the largest beneficiaries of the holiday actually cut jobs in 2005-06," noted Mundanca, referring to a report by the nonpartisan Congressional Research Service.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/07/BULP1K72Q5.DTL

Originally posted by JS357
Do you mean tax on the basis of the monetary value of assets, not the monetary value of transactions? Just trying to understand. If so, it's a bigger topic.

I mean a tax on people who charge rent, mostly. Vacation homes too. The details of how the beaurocracy calculates these things don't interest me that much, though I am wary of the tendency of beaurocrats, accountants and other munchkins to manipulate such calculations.

Originally posted by JS357
Any thoughts on this? I think it's counterproductive and only encourages companies to build up more offshore money in anticipation of a repeat of the tax holiday. A less time-sensitive tax policy on foreign income should be put in place.

http://finance.fortune.cnn.com/2011/06/21/schumer-adds-new-weight-to-repatriation-tax-talks/

"...The idea is to encour ...[text shortened]... n would be dedicated to an infrastructure bank that would help fund new building projects..."

High tax rates are why so much corporate money is off shore in the first place. It is the "greed of government" which drives businesses off shore.

Originally posted by JS357
Quote:

As repatriation skeptics, including the Obama administration, are only too well aware, this has been tried before, in 2004, with "no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions," said Obama's former Assistant Treasury Secretary for Tax Policy, Michael Mundanca, in a blog post in March (sfg.ly/dWTVh8).

More th ...[text shortened]... arch Service.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/07/BULP1K72Q5.DTL

"$19 billion of which went to the U.S. Treasury."

How that amounts to nothing is beyond me.

"92 cents of every dollar repatriated went to dividends, stock buybacks - nominally forbidden by the law - and shoring up balance sheets."

Seems like what a responsible corporation does. Should the government take more than 8%? That's why the money is off shored in the first place. Guess who pays corporate taxes in the end? The consumer.