When Businesses Move to Mexico
May 17, 2016 07:57:49 #
ole sarg
Loc: south florida
The rate seems to be OK my mistake. The problem is major corporations only pay taxes on what they collect in the US and small corporations have other ways of lessening taxes.
Are you hearing that U.S. corporations are taxed much more than their international competitors, making it harder for them to compete in global markets? Those who think so want policymakers to substantially cut corporate income taxes, protect corporate tax loopholes or both. But that claim is highly misleading to begin with, as this recent Wall Street Journal analysis of pharmaceutical giant Pfizer's accounting methods illustrates.
First, some background. The U.S. federal corporate tax rate is 35 percent, and that "statutory" rate is what corporate tax critics cite most often. Additional state corporate taxes bump the overall number up closer to 40 percent.
The statutory rate, however, doesn't reflect the write-offs in the tax code (so-called tax expenditures) that reduce the "effective rate" on corporate profits – that is, what corporations actually pay in taxes as a share of their profits. Indeed, while the U.S. statutory rate is about 14 points higher than the average among industrialized countries, the effective rate differential is much smaller, a Congressional Research Service analysis found.
One of the largest corporate tax expenditures – and the one that's central to the Pfizer situation – is "deferral of income from controlled foreign corporations," which allows multinationals to delay paying U.S. tax on their foreign profits. Companies get a credit against their U.S. taxes for the taxes they pay to other countries, and they pay no U.S. taxes on the profits they earn in other countries that they haven't yet "repatriated" (that is, brought back) to the United States.
[SEE: Political Cartoons on the Economy]
In 2014, Pfizer reported $3.1 billion of tax obligations worldwide and an effective tax rate of 25.5 percent. That's well below the U.S. statutory rate, but Pfizer actually paid less than $1 billion in taxes for an effective rate of just 7.5 percent. The difference between its tax obligations and tax payments lies in the profits Pfizer has not yet repatriated – and may never repatriate – and hence profits on which they haven't paid taxes.
To be clear, Pfizer isn't doing anything illegal. As the Journal's analysis notes, the company is following accounting rules that require it to book those tax obligations unless they declare that they'll reinvest abroad, permanently or indefinitely, the profits on which they're based. Most companies with foreign profits seem to make such a declaration, and hence would report higher earnings and an even lower effective tax rate than Pfizer's under the same circumstances.
[OPINION: What Ben Carson Got Right About Taxes in the 4th Republican Debate]
Those who want to cut corporate tax rates are uninformed or disingenuous to point to statutory rates or artificially high effective rates like Pfizer's to argue that corporate taxes are too high. As my Center on Budget and Policy Priorities colleague Chye-Ching Huang says here, the big problem with taxing multinationals today is "stateless income": profits that aren't taxed anywhere. Cutting the corporate rate doesn't bring that income into the U.S. tax base or greatly reduce multinationals' search for "tax havens" (countries with very low or zero corporate tax rates); it mostly just costs public revenue on the profits that the government would otherwise tax.
http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates
In my company, a corp, I can transfer monies to tax differed havens such as IRAs via declaring bonuses in good years etc. I could write off my car, I had entertainment expenses, etc.
Are you hearing that U.S. corporations are taxed much more than their international competitors, making it harder for them to compete in global markets? Those who think so want policymakers to substantially cut corporate income taxes, protect corporate tax loopholes or both. But that claim is highly misleading to begin with, as this recent Wall Street Journal analysis of pharmaceutical giant Pfizer's accounting methods illustrates.
First, some background. The U.S. federal corporate tax rate is 35 percent, and that "statutory" rate is what corporate tax critics cite most often. Additional state corporate taxes bump the overall number up closer to 40 percent.
The statutory rate, however, doesn't reflect the write-offs in the tax code (so-called tax expenditures) that reduce the "effective rate" on corporate profits – that is, what corporations actually pay in taxes as a share of their profits. Indeed, while the U.S. statutory rate is about 14 points higher than the average among industrialized countries, the effective rate differential is much smaller, a Congressional Research Service analysis found.
One of the largest corporate tax expenditures – and the one that's central to the Pfizer situation – is "deferral of income from controlled foreign corporations," which allows multinationals to delay paying U.S. tax on their foreign profits. Companies get a credit against their U.S. taxes for the taxes they pay to other countries, and they pay no U.S. taxes on the profits they earn in other countries that they haven't yet "repatriated" (that is, brought back) to the United States.
[SEE: Political Cartoons on the Economy]
In 2014, Pfizer reported $3.1 billion of tax obligations worldwide and an effective tax rate of 25.5 percent. That's well below the U.S. statutory rate, but Pfizer actually paid less than $1 billion in taxes for an effective rate of just 7.5 percent. The difference between its tax obligations and tax payments lies in the profits Pfizer has not yet repatriated – and may never repatriate – and hence profits on which they haven't paid taxes.
To be clear, Pfizer isn't doing anything illegal. As the Journal's analysis notes, the company is following accounting rules that require it to book those tax obligations unless they declare that they'll reinvest abroad, permanently or indefinitely, the profits on which they're based. Most companies with foreign profits seem to make such a declaration, and hence would report higher earnings and an even lower effective tax rate than Pfizer's under the same circumstances.
[OPINION: What Ben Carson Got Right About Taxes in the 4th Republican Debate]
Those who want to cut corporate tax rates are uninformed or disingenuous to point to statutory rates or artificially high effective rates like Pfizer's to argue that corporate taxes are too high. As my Center on Budget and Policy Priorities colleague Chye-Ching Huang says here, the big problem with taxing multinationals today is "stateless income": profits that aren't taxed anywhere. Cutting the corporate rate doesn't bring that income into the U.S. tax base or greatly reduce multinationals' search for "tax havens" (countries with very low or zero corporate tax rates); it mostly just costs public revenue on the profits that the government would otherwise tax.
http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates
In my company, a corp, I can transfer monies to tax differed havens such as IRAs via declaring bonuses in good years etc. I could write off my car, I had entertainment expenses, etc.
travelwp wrote:
If the IRS sends a corporation a tax bill that says: Pay your Fair Share. The IRS would get nothing, so instead of Fair Share, what tax percentage should they pay?
May 17, 2016 08:02:43 #
ole sarg wrote:
You contradict yourself on so many levels your arg... (show quote)
It's not the first time "I've been wrong, and most likely not the last. Only something less than half of our hard-working folks are actually employed(working). And too many are CONTENT to be on the dole, as it were. RJM
May 17, 2016 08:08:34 #
ole sarg
Loc: south florida
You are wrong!
That number was based on the entire population regardless of age and health!
That number was based on the entire population regardless of age and health!
digit-up wrote:
It's not the first time "I've been wrong, and most likely not the last. Only something less than half of our hard-working folks are actually employed(working). And too many are CONTENT to be on the dole, as it were. RJM
May 17, 2016 08:20:12 #
ole sarg wrote:
You are wrong!
That number was based on the entire population regardless of age and health!
That number was based on the entire population regardless of age and health!
Again, I might be wrong, but I'm not enjoying your obsession with telling me that I am wrong.... In fact, you're liking it entirely too much.. I believe that you are "So Wrong To KEEP telling me, over and over That I am WRONG". What sick pleasure are you getting out of that??? RJM
May 17, 2016 08:27:00 #
exakta56
Loc: Orford,New Hampshire
When I read the replies here and note their incredible diversity and polarization, I am uncomfortably reminded that in extreme cases, some will kill to preserve their ignorance. Go to factcheck.org and look at the facts. Facts, as most of you know are those bits of information that happen to have past the test of veracity and are generally accepted as being TRUE.
May 17, 2016 08:31:21 #
exakta56 wrote:
When I read the replies here and note their incredible diversity and polarization, I am uncomfortably reminded that in extreme cases, some will kill to preserve their ignorance. Go to factcheck.org and look at the facts. Facts, as most of you know are those bits of information that happen to have past the test of veracity and are generally accepted as being TRUE.
Is "fact-check" one of those crack-pot liberal organizations? Rumor has it that that is the case. The same. Family as the SNOPES folks. Who will we believe? Where do you get your "TRUTH". Who feeds you your NEWS??? RJM
May 17, 2016 08:38:34 #
ole sarg
Loc: south florida
I say you are wrong because lies and innuendo influence others to make poor decisions. Just like your repeating falsehoods and innuendos has led to your poor understanding of reality!
digit-up wrote:
Again, I might be wrong, but I'm not enjoying your obsession with telling me that I am wrong.... In fact, you're liking it entirely too much.. I believe that you are "So Wrong To KEEP telling me, over and over That I am WRONG". What sick pleasure are you getting out of that??? RJM
May 17, 2016 08:47:26 #
ole sarg wrote:
I say you are wrong because lies and innuendo influence others to make poor decisions. Just like your repeating falsehoods and innuendos has led to your poor understanding of reality!
Thanks, for setting me straight!! You are so kind to do so! I didn't know that I'm so terrible, so... Thanks again for your "informed evaluation of me. I promise, I won't take it personal . Have a great day, and move on to criticize as many as you can. RJM
May 17, 2016 09:22:21 #
ole sarg wrote:
You don't know what you are talking about. He said he would cut the deficit and he Did
YOU ARE A LIAR AND YOUR PANTS ARE ON FIRE!
YOU ARE A LIAR AND YOUR PANTS ARE ON FIRE!
you are an uniformed idiot.. Debt and Deficit are 2 different things...not surprised that you do not understand that concept...
May 17, 2016 09:24:59 #
digit-up wrote:
Thanks, for setting me straight!! You are so kind to do so! I didn't know that I'm so terrible, so... Thanks again for your "informed evaluation of me. I promise, I won't take it personal . Have a great day, and move on to criticize as many as you can. RJM
digit..no one here takes sargetta seriously...he escapes from a VA psycho-ward every 10 days or so & vomits his nonsense about how important he is & he carries a gun because of secret missions & other such BS...he will be gone soon so dont take his shit personally..
May 17, 2016 09:33:07 #
exakta56
Loc: Orford,New Hampshire
It is fun to watch the conversation devolve to slander by those who find their misconceived 'facts' challenged. Factcheck.org will shed a lot of needed light on this discussion. But there is always the risk of finding out that your cherished ideas are opinions unsupported by fact. Scary thought!
May 17, 2016 09:36:23 #
wilpharm wrote:
digit..no one here takes sargetta seriously...he escapes from a VA psycho-ward every 10 days or so & vomits his nonsense about how important he is & he carries a gun because of secret missions & other such BS...he will be gone soon so dont take his shit personally..
Thank you, and I mean it, this time. I appreciate a second opinion . Particularly That which you just gave me. I hate to IGNORE anyone, really, but you must admit, it's not always an option. Some folks are just "always Right". I think it's the grandest thing on the Hogg, now we can effectively just delete (ignore) those we see as moronic blow-hards. What will be interesting to see, is what happens when Joe ignores Sam and Sam ignores Joe. ??
May 17, 2016 09:38:07 #
T_Span wrote:
There is no doubt some accuracy in what you state,... (show quote)
Hard to believe what you have to say when the truth is that the UNIONS have created a 'work' atmosphere that has driven the cost of doing business here to new highs and so it is easier to get the same job over there at substantial saving. Now if only we can make unions passe when it comes to anybody employed by the government or for the government. It is well known and excepted that the Democraps and unions are out to screw working Americans out of their last dime.
May 17, 2016 09:44:19 #
Checkmate wrote:
Hard to believe what you have to say when the truth is that the UNIONS have created a 'work' atmosphere that has driven the cost of doing business here to new highs and so it is easier to get the same job over there at substantial saving. Now if only we can make unions passe when it comes to anybody employed by the government or for the government. It is well known and excepted that the Democraps and unions are out to screw working Americans out of their last dime.
strangely enough, I was driving from Monterrey,Mex to Laredo,Tx about a month ago & we passed 3 trucks loaded with new US POSTAL SERVICE
delivery vans, headed North, made somewhere in MEXICO....SO obviously our own govt prefers foreign made vehicles (or their price)..
May 17, 2016 10:38:04 #
lairs still know how to figure. ou guys sure know how to muddy the waters.
in my dad's time 1900, you could raise a family on $0.50 a day. in henery ford's day you could do it on $5.00 or less a day.in 1955 you could do it on $12.00 a day. in the late 60"s on $25.00 a day. today it's whatever they will pay you plus what you must run up on your credit card. something is really wrong when we must depend on permanent debt and minimum payments to survive.
in my dad's time 1900, you could raise a family on $0.50 a day. in henery ford's day you could do it on $5.00 or less a day.in 1955 you could do it on $12.00 a day. in the late 60"s on $25.00 a day. today it's whatever they will pay you plus what you must run up on your credit card. something is really wrong when we must depend on permanent debt and minimum payments to survive.
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