How do "repatriation tax relief" proponents justify it?

[livendive 8]

OK, so the basic concept is that American corporations pay corporate taxes. Some of them don't want to pay their share, so they invest overseas and make money there. The government (reasonably in my opinion) then says, hey, all good...just pay your tab when you bring that money back in country. If they didn't do this, then those who ship jobs overseas would have a distinct tax advantage over those who keep jobs here, in addition to the common salary/cost advantage. Now, the proposal being bantied about is to offer a holiday, or steep discount on those taxes, in order to stimulate jobs? Are you kidding me? If these countries were interested in creating American jobs, they'd have kept that money here in the first place! In my opinion, the better course of action would be to offer tax benefits to those companies who DON'T ship jobs overseas. I'm curious how proponents of this kind of cut justify it, I mean besides the whole "the only good tax is the one that doesn't affect me" thing.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[DougH 270]

Dave,

First you need to remove the judgement from your claim. The companies are legally reinvesting profits from CFC's over seas. They are paying foreign taxes overseas. This is all legal in the tax code, so to say they aren't paying their "fair share" is bullshit. They are paying exactly what congress has legislated.

Corporations don't cheat at taxes, normally. The biggest tax cheats are small business owners and people in cash businesses. There is a difference between using the full extent of the law to your advantage, and being a liar that under reports income! Don't like it, write your senators!

Back to the holiday, it brings the cash back, plain and simple. Otherwise the companies will just continue to reinvest it over seas. No tax revenue for us, and no cash coming back.

I won't make the claim that it is going to spur massive job growth, it hasn't in the past.

But it would allow the funds to return here, and there will be some tax on it.

The cash is more to likely get passed on to shareholders in the form of dividends than it is going to end up paying the salary of newly created jobs. But even divedends to shareholders isn't a bad thing. Some of that will get pushed back into the economy through consumer spending. It helps 401k's, pensions, and retirement plans.

Back to the whole jobs claim...Why would they create jobs any way? The economy sucks and no one is buying their products. All the cash in the world won't spur job creating with weak demand.

"The restraining order says you're only allowed to touch me in freefall"
=P

[rushmc 23]

It is more of a market advantage

Corps (in the end) do not pay taxes

Taxes are just a cost of doing business and those costs are figured in the selling price of the product

Those who buy the product here pay those taxes in the end

If the taxes leavied on a corp make them unable to compete in the market, they close. Whether they make said product, here or elsewhere

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[livendive 8]

There is some judgement, but not so much as you imply. I never suggested corporations cheat their way out of taxes, nor did I suggest that sending their investments overseas was illegal. Yes, it's individuals and small businesses who fail to report income, because that's the only way of dodging taxes that they can afford. Large corporations on the other hand, buy politicians who will give them perfectly tailored tax breaks. If they fail to purchase sufficient "friends" of this type, they take their ball and go to Asia and then try to purchase said "friends" from their. When they get enough, they'll bring their ball back, but only if we agree to also throw a homecoming party for them, complete with BJs from everyone for the guest of honor.

You do make a good point about the general state of the economy, but it's kind of outside the scope of what I wanted to learn in this thread. I know I'm personally in a state of spending less, saving more, and shedding some debt, and I expect that to continue for awhile. However I also have increasing regard for those companies that I consider good "corporate citizens", and I think my future spending should probably start taking that into consideration.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[DougH 270]

Quote

There is some judgement, but not so much as you imply. I never suggested corporations cheat their way out of taxes, nor did I suggest that sending their investments overseas was illegal. Yes, it's individuals and small businesses who fail to report income, because that's the only way of dodging taxes that they can afford. Large corporations on the other hand, buy politicians who will give them perfectly tailored tax breaks. If they fail to purchase sufficient "friends" of this type, they take their ball and go to Asia and then try to purchase said "friends" from their. When they get enough, they'll bring their ball back, but only if we agree to also throw a homecoming party for them, complete with BJs from everyone for the guest of honor.

You do make a good point about the general state of the economy, but it's kind of outside the scope of what I wanted to learn in this thread. I know I'm personally in a state of spending less, saving more, and shedding some debt, and I expect that to continue for awhile. However I also have increasing regard for those companies that I consider good "corporate citizens", and I think my future spending should probably start taking that into consideration.

Individuals and small business that fail to report income do so because they are cheats and liars. It has nothing to do with a lack of tax deductions.

They have the same basic deductions that most corporations are entitled to. Business expenses, cost of sales. That makes up the lions share of corporate tax deductions.

Sure the local pizza guy down the street doesn't get into the realm of being able to claim an R&D credit, is that why he skims cash under the table?

These are global companies with global investors. We are talking about profits that are earned over seas. They aren't hiding profits that are made here in the US.

Would you rather we structure things in a way that encourages them to relocate to a low tax jurisdiction like Ireland? They would then continue to not pay US tax on foreign earnings. And they would only pay US tax on business that is deemend effectively connected to a US trade or business. Win or lose for us?

And further lets consider that corporations are taxed twice. Once at the corporate level, and then again when they distribute earnings to their shareholders.

"The restraining order says you're only allowed to touch me in freefall"
=P

[SkyDekker 1,465]

Quote

Individuals and small business that fail to report income do so because they are cheats and liars. It has nothing to do with a lack of tax deductions.

They have the same basic deductions that most corporations are entitled to. Business expenses, cost of sales. That makes up the lions share of corporate tax deductions.

Sure the local pizza guy down the street doesn't get into the realm of being able to claim an R&D credit, is that why he skims cash under the table?

These are global companies with global investors. We are talking about profits that are earned over seas. They aren't hiding profits that are made here in the US.

Would you rather we structure things in a way that encourages them to relocate to a low tax jurisdiction like Ireland? They would then continue to not pay US tax on foreign earnings. And they would only pay US tax on business that is deemend effectively connected to a US trade or business. Win or lose for us?

And further lets consider that corporations are taxed twice. Once at the corporate level, and then again when they distribute earnings to their shareholders.

You mean like these companies who have head offices in tax friendly countries. They claim huge revenues out of those offices, yet the office consists of one receptionist answering phonee (Often shared by multiple Head Offices).

[DougH 270]

All of my clients that are HQ'd out of Ireland have all of their management function right there in Ireland.

Lawyers, managers, treasury, sales people, it is all in Ireland.

I am sure there are plenty of exceptions.

The main point is that if you structure the tax code in a manner that encourages companies to relocate overseas they are going to move skilled jobs overseas.

"The restraining order says you're only allowed to touch me in freefall"
=P

[kallend 2,150]

Quote

And further lets consider that corporations are taxed twice. Once at the corporate level, and then again when they distribute earnings to their shareholders.

Fallacious argument. Wages paid to corporate emplyees are also taxed twice by that reasoning, and again when those workers buy anything.

...

The only sure way to survive a canopy collision is not to have one.

[DougH 270]

Quote

Quote

And further lets consider that corporations are taxed twice. Once at the corporate level, and then again when they distribute earnings to their shareholders.

Fallacious argument. Wages paid to corporate emplyees are also taxed twice by that reasoning, and again when those workers buy anything.

It isn't fallacious Prefesser. Tax code results in corporate earnings being subject to income tax twice.

A sole proprietor's earnings from his business are subject to how many income taxes? One, his or her own.

Wages to corporate employees are not subject to two levels of income taxes. That is absolute horse shit!

Wages paid to a corporate employee are deductions to the corporation, within reason (ie 162M), and are income to the employees.

Employees buying things with those earnings brings indirect taxes into play, sales tax, which has nothing to do with income tax.

"The restraining order says you're only allowed to touch me in freefall"
=P

[kallend 2,150]

Quote

Quote

Quote

And further lets consider that corporations are taxed twice. Once at the corporate level, and then again when they distribute earnings to their shareholders.

Fallacious argument. Wages paid to corporate emplyees are also taxed twice by that reasoning, and again when those workers buy anything.

It isn't fallacious Prefesser. Tax code results in corporate earnings being subject to income tax twice.

.

Disagree. The corporation is legally a separate entity in its own right. It is taxed once, then the shareholders are taxed once.

"A corporation is a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its members."

...

The only sure way to survive a canopy collision is not to have one.

[DougH 270]

You can disagree all that you want, the math is simple.

Joe Blow's pizza shack is a sole proprietor run business. Joe reports the earnings from his pizza shop on Schedule C of his 1040.

Joe's pizza sucks and he only manages to sell one pizza all year for 20 bucks, that would be revenue. The dough, utilities, toppings and cheese cost Joe 10 bucks, that would be expense.

That gives Joe earnings of 10 dollars, which he has one level of income tax applied to.

Pizza Smut, a has an equally shitty year, their sauce sucks, and they also sell one 20 dollar pizza, and have expenses of 10 dollars.

Pizza Smut has taxable income of 10 dollars. It pays corporate income tax on this earnings.

Pizza Smut later issues a cash dividend to Warren Buffet and a few other shareholders. Those shareholders have the dividend taxed as part of their personal earnings.

1 level of tax for the earnings from Joe's pizza shop, 2 levels of tax for the earnings from pizza Smut.

You can try to twist it all you want, but you would be wrong. It is one of the disadvantages of using a corporation as your business structure.

"The restraining order says you're only allowed to touch me in freefall"
=P

[kallend 2,150]

Quote

You can disagree all that you want, the math is simple.

It's not a matter of math. It's a matter of definition. A corporation is legally different from its shareholders. Hence taxing a corporation is not the same as taxing its shareholders. Calling it double taxation is just a ploy by the rich to try to get even richer at the expense of other taxpayers.

What part of "a separate legal entity having its own privileges and liabilities distinct from those of its members" is so hard to comprehend?

...

The only sure way to survive a canopy collision is not to have one.

[DougH 270]

It is not a ploy it is a mathematical certainty.

What is so hard about following the earnings. The money passed on to shareholders is the money original earned by the corporation, it is the same money. The fact that they are legal distinct entities doesn't mean anything. They are distributing earning previously subject to income tax.

Every CPA and lawyer in this country that is worth half a damn will agree.

This isn't academia it is simple fucking math! You are wrong.

What is so hard to understand that a corporation can only distribute previously contributed capital, or earnings.

"The restraining order says you're only allowed to touch me in freefall"
=P

[funjumper101 15]

Quote

It is not a ploy it is a mathematical certainty.

What is so hard about following the earnings. The money passed on to shareholders is the money original earned by the corporation, it is the same money. The fact that they are legal distinct entities doesn't mean anything. They are distributing earning previously subject to income tax.

Every CPA and lawyer in this country that is worth half a damn will agree.

This isn't academia it is simple fucking math! You are wrong.

What is so hard to understand that a corporation can only distribute previously contributed capital, or earnings.

This is a perfect example of how the power of owning the media message can teach people to believe things that are not factually correct. What sounds plausible and believable is actually totally and completely wrong, as defined in the rule of LAW. Yet credulous people will repeat, over and over, that which is worng, even when corrected with FACTUAL information.

The USA is screwed. The media presents bullshit to the masses and they fall for it, hook, line, and sinker. Critical thinking in tandem with factual accuracy still gets parroted responses from the credulous.

When parroted bullshit is passed of as real thinking, we're fucked. Happens all the time now with the RWCs, as their side owns all of the mass media.

[billvon 3,120]

>Now, the proposal being bantied about is to offer a holiday, or steep discount on
>those taxes, in order to stimulate jobs? Are you kidding me?

Nope. A lot of US firms have a lot of money tied up overseas (because they sell products overseas) and they effectively can't bring it back into the US without getting hammered on taxes. So instead they try to invest it outside the US.

If they _could_ bring it back into the US, many of them would use it here to buy more stuff, hire more people etc.

Of course, this is just one of the many ways you can use money to "stimulate the economy."

[kallend 2,150]

Quote

It is not a ploy it is a mathematical certainty.

.

It has absolutely NOTHING to do with math, and everything to do with the legal definition of a corporation. A corporation is NOT the same entity as any of its shareholders. Therefore no entity is being taxed twice. That is just right wing propaganda to justify more benefits for the already wealthy.

...

The only sure way to survive a canopy collision is not to have one.

[DougH 270]

The earnings are taxed twice, your wrong. Thanks for playing.

I'll make it simple since you want to make a simple accounting concept into a bs political one, and into a rich versus poor one at that.

Are corporations taxed?

Are dividends received by sharehiolders taxed?

Can corporations claim dividends as a deduction to reduce their taxable income?

"The restraining order says you're only allowed to touch me in freefall"
=P

[DanG 1]

Corporations pay their employees a salary, which is then taxed. How is this any different from taxing shareholder dividends?

- Dan G

[kallend 2,150]

Quote

Corporations pay their employees a salary, which is then taxed. How is this any different from taxing shareholder dividends?

It isn't. Doug has just bought the GOP line (hook and sinker too).

...

The only sure way to survive a canopy collision is not to have one.

[kallend 2,150]

Quote

The earnings are taxed twice, your wrong. Thanks for playing.

I'll make it simple since you want to make a simple accounting concept into a bs political one, and into a rich versus poor one at that.

Are corporations taxed?

Are dividends received by sharehiolders taxed?

Can corporations claim dividends as a deduction to reduce their taxable income?

Fatally flawed analysis of the situation indicating complete misunderstanding of what is being taxed.

...

The only sure way to survive a canopy collision is not to have one.

[SkyDekker 1,465]

Quote

The earnings are taxed twice, your wrong. Thanks for playing.

Those earnings are not traxed twice. They are taxed more than twice.

Corporation
shareholder
sales tax if spent
Estate tax if saved beyond death

etc

Your math and definitions are off.

Thanks for playing (and I really hope you don't work in the financial field)

[Southern_Man 0]

Quote

Corporations pay their employees a salary, which is then taxed. How is this any different from taxing shareholder dividends?

Oh, oh, I know. The worker's salary is taxed at a much higher effective rate.

"What if there were no hypothetical questions?"

[DougH 270]

Quote

Corporations pay their employees a salary, which is then taxed. How is this any different from taxing shareholder dividends?

It is very very different and very very simple.

Corporations claim their payroll as a deduction. Payroll is a cost that reduces taxable income. The dollars being paid to an employee are not taxed twice, they are taxed only at the employee level.

Corporation don't get taxed on gross receipts, they get taxed on net income.

It is basic GAAP. A dividend is a equity related transaction, it does not involve a companies P&L. A dividends is a distribution of retained earnings. Earnings which are already subject to tax at the corporate level when the company has a taxable profit and they file their annual 1120.

Tell you what, go to your local accountant and lawyer and tell them you want to start a business but you want to structure it as a C-corporation instead of a sole proprietor type business, or a LLC, or even a partnership.

One of the things they should explain to you is that you are going to expose your earnings to two levels of taxation.

"The restraining order says you're only allowed to touch me in freefall"
=P

[DougH 270]

Quote

[
Thanks for playing (and I really hope you don't work in the financial field)

That is funny, we are discussing income tax. If you think payroll and sales tax are corporate and individual income tax I won't even bother wasting my time.

So sales tax = income tax?

Nice attempt at muddying the water.

"The restraining order says you're only allowed to touch me in freefall"
=P

[kallend 2,150]

Quote

Quote

Corporations pay their employees a salary, which is then taxed. How is this any different from taxing shareholder dividends?

It is very very different and very very simple.

Yes it is - the entity is taxed, not the money. A corporation is a different entity than its shareholders. So simple, I'm surprised you can't figure it out.

...

The only sure way to survive a canopy collision is not to have one.