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View Diary: Eliminate corporate tax, seriously (422 comments)

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  •  Here is the situation (0+ / 0-)

    Apple has 100 billion in cash sitting in European etc accounts. They can spend it in Europe or china or wherever and not have to pay tax.

    If they bring it back to the US. to invest in jobs or items here. They have to pay tax.

    So Apple etc can build a new manufacturing plant in China. Without paying taxes. BUT if they build the same manufacturing plant in the US they would have to pay tax.

    So why would they ever invest in the US of we give them a tax penalty for doing so?

    That is how it works right now.

    •  But this presumes that the funds to make (2+ / 0-)
      Recommended by:
      Odysseus, Square Knot

      US investments would have to be transferred from off-shore.  On what do you base this?  In FY2013, Apple had $22.8 billion in US operating income (pre-tax), with $14 billion in cash (globally) on its books.  

      •  The fact that 2.1 trillion dollers are sitting (0+ / 0-)

        overseas.because of this very specific issue...... Not that all of it would need to come back. But even a fraction coming back would have a massive effect on world markets.

        TBH 2.1 trillion suddenly being repatriated to USD would be a world shaking event.

        It could either collapse the world economy, or give the US economy a HUGE shot of adrenalin.

    •  But, with the last tax holiday back in 2004 (4+ / 0-)

      as our guide:

      ◾After examining the various studies that have been conducted, the Congressional Research Service reported that the “studies generally conclude that the reduction in the tax rate on repatriated earnings…did not increase domestic investment or employment.”
      •  Thanks (1+ / 0-)
        Recommended by:

        I am waiting to hear an argument that explains why it would be different.  No one has weighed in yet.

      •  That was a long (0+ / 0-)

        time ago. So my memory may be a bit hazy.

        But..... There was not nearly as much money held overseas then. (I think)

        and the action was a holliday....

        I hate to tell you but the choice to bring 2.1 trillion back to the USA will not take days, months or even a few years.

        For the kind of serious decisions being made a "holiday" would be a laugh.

        I am not a huge fan of this idea, either way.

        Id prefer a tax on non repatraited profits. Say 1% per year, half of that is refundable once you bring it back.

        That would earn us around 20 Billion a year.

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