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View Diary: Analysis: Dow 30 companies show what a joke calling corporate tax burden 'heavy' has become (70 comments)

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  •  more light is needed on those tricks (6+ / 0-)

    that make money appear to be 'overseas'.
    The general notion of a US multinational corp. is a vastly successful company (Apple)  that generates income from customers and franchises worldwide.
    That is seldom accurate. Much of that money is simply being laundered to make it less taxable.

    Last full month in which the average daily temperature did not exceed twentieth-century norms: 2/1985 - Harper's Index, 2/2013

    by kamarvt on Wed Mar 27, 2013 at 02:22:16 PM PDT

    •  its all transfer pricing. (3+ / 0-)
      Recommended by:
      VClib, Meteor Blades, MPociask

      a lot of big companies get preapproval from the IRS for their transfer pricing regimes by which profits are shuttled between subs.  the problem is that transfer pricing just has to be "reasonable," which means the IRS will only go on the attack if the prices are patently unreasonable and abusive.

      so the IRS should know quite a bit, but the law makes it structurally difficult to enforce.

      one promising approach that's being kicked around is using a common state method of "apportionment," wherein income is sourced to taxing jurisdictions based on some blended rate comprising things like where sales occur, where the workforce is located, and where real property is.

    •  U.S. tax law, (0+ / 0-)

      unlike other countries', slams foreign profits once repatriated. This is counter-productive.

      •  I don't know if slams is the right word (0+ / 0-)

        Tell me if the following hypothetical example is incorrect:

        Ford has a stockpile of money.  It can open a factory with that money here, or open a factory in LowTaxLand sell the products from that factory there. If we don't tax repatriated income, there will be signficant tax advantages for Ford to opening that factory and doing business in LowTaxLand.  They'll use the dollars originally made in America to build a factory in LowTaxLand, build a profitable enterprise there, and then bring pocket those profits back here in America, while only paying LowTaxLand taxes.

        Repatriation says you can still bring the money home, but we're going to level the tax playing field.  You'll get credit for the taxes you already paid in LowTaxLand, but you're going to true up with Uncle Sam.

        •  In theory (0+ / 0-)

          it is true that corporations take a credit on foreign taxes paid. However, the IRS insists that the foreign operations do everything (in the judgment of the IRS) to minimize those taxes and that credit. This leads to substantial disallowment and double taxation. This setup is largely peculiar to the U.S.

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