Proof Taxes have to be Cut - Corporate Inversions

I hope most people realise that ---
--- this is not just an issue for the US, it happens in all countries where there is higher taxation ....its called taxation arbitrage.
-- most of the jobs dont go anywhere, its simply that the corporate head quarters and the sources of income and expense change on paper.
--- even solutions such as taxing the sales where they originate will not fix the issues unless the expenses are in the same jurisdiction.

---- welcome to the world of globalisation.

 

this is for ricter.

out tax system puts us the us is 94th out of 100.

http://www.breitbart.com/Big-Govern...t-Causing-Businesses-Citizens-to-Flee-America

The U.S. tax system is so burdensome and arbitrary that a 2013 study undertaken by a European think tank ranked it 94th out of 100, right after Zimbabwe, for its impact on business competitiveness. No wonder the U.S. economy is growing at half the pace as during the Reagan-Clinton years and creating about one-sixth the jobs.
Recent IRS abuses of American businesses, taxpayers, and nonprofits for political views and contributions—and Justice Department reluctance to prosecute malefactors—only add to perceptions that the U.S. tax system makes America no place to do business. Increasing numbers of businesses and individuals are making that choice.

American corporations are merging with foreign competitors for the explicit purpose of locating corporate headquarters and tax residences outside the United States. These so-called “tax inversions” started as a trickle in the 1990s but are increasing. Activist investors are pressuring U.S. corporate executives to maximize stockholders’ after tax profits—and to shield stockholders from IRS and Justice Department enforcement abuses.

Similarly, private citizens living abroad—unable to obtain bank services, faced with huge tax and compliance costs, and the risk that even a hangnail error or whispered politically incorrect view could put them in the cross-hairs of the IRS—are disavowing their U.S. citizenship.

For private citizens, the costs of leaving America for good are quite high. Those include discriminatorily higher estate taxes for heirs who remain U.S. citizens and arbitrarily higher taxes on the sale of property and securities.
Democrats and Republicans alike say they want tax reform, but Obama is unwilling to reduce the overall tax burdens. He only wants to move around and reduce certain deductions but maintain or increase revenues.

More and more businesses and citizens will still want to leave America. And Congress appears not to have the courage to take on America’s KGB—the IRS.
Peter Morici is an economist and business professor at the University of Maryland,

 

It's all part of turning us into a third world banana republic, ie the "Chicago way." Pile on tax and regulatory burdens, enforce them selectively and let the favored reap the rewards. El Presidente and his family of course decide who prospers and who doesn't. Who gets health care and who doesn't. Who gets prosecuted and who doesn't. Who gets a government contract and who doesn't.

It will help to get a lot of people in here voting who have experience in that type of system.

 

I'm a little bit torn here considering that trickle down has been proven to be a myth. That said, corporations need some incentive to start hiring. So it's a you go first proposal I have. Hire some people, you get a guaranteed cut. Don't and you won't. Bottom line is that corporate America cannot be trusted to do anything but fill the pockets of a very few people, all at the expense of the average American worker. They must show some good faith before I'd give them anything.
One more thing. Ain't none of these bastards paying 35% or anything close to it, so sing that bullshit song somewhere else. And stick that flag lapel up your ass too. Gratitude is a word of action, not a bunch of hot air and empty gestures.

 

Hiring, however, is not an act of philanthropy; it is a response to increased demand. For that demand to be realized, potential buyers must have money. When wages are stagnant or declining, purchasing power is reduced.

But this path has been trod before. We may get to the point where executives can make tons of money without selling anything at all.

 

Uh, no we won't. At least not on any level of sustainability.

 

why should there be income taxes?
we can certainly afford to cut them in half.

if you eliminate paying interest on the debt all you would have to do is trim the federal budget a tiny bit and we would be in balance.
but we don't even have to be in balance.
the massive inflation we have experienced up until quantitative easing was not due to govt spending.
if you consider how many dollars there are out there and how much the world economy grows with dollars being part of it.
our govt could deficit spend and still not see inflation.

Without knowing how much inflation is being causes by dollar creation by the Fed... there is no reason for income taxes.

 

Its costs a lot more money to do business in the U.S. because of our out of control tax system.

http://www.breitbart.com/Big-Govern...ness-Tax-Agenda-Chasing-Burger-King-to-Canada


Burger King’s effort to acquire Tim Horton’s, a Canadian purveyor of coffee and doughnuts, is a good business decision, but its choice to locate corporate headquarters north of the border would be the direct result of President Obama’s anti-business tax policies.
Burger King is a well managed global enterprise with stores in nearly 100 countries, and half its profits earned abroad. Like rival McDonald’s, its sales are declining as millennials turn away from hamburgers, and it is seeking other avenues to expand.

McDonald’s is getting into coffee—a high margin business—in a big way, and Tim Horton’s java knowledge offers Burger King the opportunity to do the same.

Also, Burger King could apply its knowledge of foreign franchising and restaurant regulations to expand Tim Horton’s limited global footprint, as rival Dunkin’ Brands is doing in Asia.

Simply, the U.S. federal corporate tax rate is 35 percent and applies to both Burger King’s domestic and overseas profits, whereas Canada’s rate is 15 percent and only applies to Tim Horton’s domestic sales.

In the second quarter of this year, Burger King’s federal and state income taxes were 24 percent of its operating costs and 34 percent of its profits. Locating in Canada would cut those figures by up to 25 percent.

No responsible CEO or corporate board could reasonably ignore those figures, and that’s why about 60 U.S. companies have completed or plan so called “tax inversions”—acquisitions or mergers with foreign companies that permit them to locate their tax address in a friendlier jurisdiction.

What American businesses actually pay in federal and state income taxes varies a lot, thanks to many exemptions, deductions, and provisions to delay taxes on foreign earnings; however, the average combined U.S. and foreign tax burden on profits is about 30 percent, whereas the average for foreign rivals is about 23 percent.

Ohio Democratic Senator Sherrod Brown is calling for a boycott of Burger King, and Treasury Secretary Lew is busy crafting legislation for Congress to make tax inversions more difficult if not impossible.

If Congress doesn’t act, Lew is threatening to bypass Congress and make tax inversions illegal by “reinterpreting” tax laws—likely as suits the convenience of Obama’s political agenda.

And that’s the more fundamental point. The U.S. tax system has become both burdensome and quite arbitrary—a political tool that presidents of both parties may use to reward friends and punish enemies.

A 2013 study undertaken by a European think tank ranked the United States 94th out of 100, right after Zimbabwe, for its impact on business competitiveness. No wonder the U.S. economy is not creating enough jobs.

In a recent example, the Treasury Department determined that telecommunications company copper and fiber optic transmission lines—think the wires on poles outside your home—are real estate, and may be placed in a special real estate investment trust that receives privileged tax treatment.

It is no accident that telecom companies, which are highly regulated entities, are big donors to the Democratic Party. In fact, the home of Comcast’s CEO is one of the president’s favorite fund raising venues.

Democrats and Republicans alike say they want corporate tax reform—eliminate loopholes and deductions and lower rates—but Obama has made clear he wants more revenue overall out of the exercise.

 

I had wondered if someone was going to post the Burger King story - particularly the angle where Warren "Pay Your Fair Share" Buffet was bankrolling the deal to allow Burger King to leave the US for tax purposes.