Step right up folks, witness the greatest tax give-away in human history!!!
The US Congress is about to approve a cut in the corporate tax rate from 35% to 21%, which is simply awesome! When you consider that the effective rate is actually about 20% already, this may mean that some US corporations may soon pay an effective rate of….wait for it….ZERO PERCENT, depending on what generous write-offs stay in place!
But wait! There is MORE!!
The USA requires American corporations to pay tax on their foreign earnings. Right now, there is between $1.6 - $2.1 Trillion in corporate profits overseas that has not been returned to the USA in order to avoid taxes on that money.
This works out to between $560 Million and $735 Million in tax revenue at the 35% rate, or between $320 Million and $420 Million in tax revenue at the effective rate that has not been remitted to the tax man because these taxes are not owed until they actually land in the USA. The higher number here is actually larger that the US Government’s deficit for this year. If it were to be remitted, the US Government would have a surplus.
So, what is coming?
The US Congress will reduce the rate of corporate taxation on this foreign-earned revenue to 10% on what they actually have overseas now, and then to zero after that. This has been proposed to encourage these companies to actually bring their profits back to America, and pay any tax.
Get it?
The Congressmen, who have been bought by these same corporations, are proposing to soak the US Government for between $525 Million at the top end and $160 Million at the bottom end in tax revenue lost to the US Government. They will then ensure that the US Government gets nothing from the foreign profits of US Corporations ever again. Has there ever been a greater tax give-away in human history!?
Hmm...there is a thought. Why would Congress not tell these companies that the rate will go up to 50% within a year of they do not remit their foreign profits at the 35% rate, or these profits will be imputed to their domestic operations and taxed accordingly? That would definitely get this money flowing into the US Treasury!!
Well, we all know why such an approach is impossible. This “pay your fair share of taxes owing” approach presupposes, again, that Congress - Republicans and Democrats - aren’t actually owned by corporate America.
Reality - US corporations dictated the tax reform bill now going through Congress, and US Congressmen know their place.
I should add that a zero tax rate on foreign corporate earnings is not abnormal. But US corporations owe hundreds of millions of dollars NOW. There is no excuse for not seeking to have all taxes that are owed remitted asap. The little people have to pay all of the tax they owe - why are these corporations getting a free ride?
Is it because they invest and create jobs? This money was earned OVERSEAS! Why is the US Congress rewarding US corporations that invest and create jobs OUTSIDE of the USA?
This gift to US corporations underscores just about everything wrong in that country today - there is one America for the rich and their corporations, and one for everyone else. This will not last, and it may not end well.
The US Congress is about to approve a cut in the corporate tax rate from 35% to 21%, which is simply awesome! When you consider that the effective rate is actually about 20% already, this may mean that some US corporations may soon pay an effective rate of….wait for it….ZERO PERCENT, depending on what generous write-offs stay in place!
But wait! There is MORE!!
The USA requires American corporations to pay tax on their foreign earnings. Right now, there is between $1.6 - $2.1 Trillion in corporate profits overseas that has not been returned to the USA in order to avoid taxes on that money.
This works out to between $560 Million and $735 Million in tax revenue at the 35% rate, or between $320 Million and $420 Million in tax revenue at the effective rate that has not been remitted to the tax man because these taxes are not owed until they actually land in the USA. The higher number here is actually larger that the US Government’s deficit for this year. If it were to be remitted, the US Government would have a surplus.
So, what is coming?
The US Congress will reduce the rate of corporate taxation on this foreign-earned revenue to 10% on what they actually have overseas now, and then to zero after that. This has been proposed to encourage these companies to actually bring their profits back to America, and pay any tax.
Get it?
The Congressmen, who have been bought by these same corporations, are proposing to soak the US Government for between $525 Million at the top end and $160 Million at the bottom end in tax revenue lost to the US Government. They will then ensure that the US Government gets nothing from the foreign profits of US Corporations ever again. Has there ever been a greater tax give-away in human history!?
Hmm...there is a thought. Why would Congress not tell these companies that the rate will go up to 50% within a year of they do not remit their foreign profits at the 35% rate, or these profits will be imputed to their domestic operations and taxed accordingly? That would definitely get this money flowing into the US Treasury!!
Well, we all know why such an approach is impossible. This “pay your fair share of taxes owing” approach presupposes, again, that Congress - Republicans and Democrats - aren’t actually owned by corporate America.
Reality - US corporations dictated the tax reform bill now going through Congress, and US Congressmen know their place.
I should add that a zero tax rate on foreign corporate earnings is not abnormal. But US corporations owe hundreds of millions of dollars NOW. There is no excuse for not seeking to have all taxes that are owed remitted asap. The little people have to pay all of the tax they owe - why are these corporations getting a free ride?
Is it because they invest and create jobs? This money was earned OVERSEAS! Why is the US Congress rewarding US corporations that invest and create jobs OUTSIDE of the USA?
This gift to US corporations underscores just about everything wrong in that country today - there is one America for the rich and their corporations, and one for everyone else. This will not last, and it may not end well.
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