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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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  •  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  They'll use the dollars originally made in America to build a factory in LowTaxLand, build a profitable enterprise there, and then bring pocket those profits back here in America, while only paying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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