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Discussion Starter #1
Subsidies, tax cuts, loopholes,.....





I'm thinking that our country needs to re-think time limits on how it manage these, since everybody from middle class tax payers on up the ladder to international corps, markets within the economy, and banks......seem to take to these for market repairs and quickly get addicted/apply new bills/new logistics of earnings, profits, expectations and billing cycles, to these instead of making proper adjustments to spending and operations for the long haul.



How long or short do you folk think these methods should be enacted, to better control addiction and weening of these funding supplements?
 

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Subsidies, -Should be re-examined every 6 months. If costs change or the subsidies themselves are inadequate or being taken advantage of... the short span of time in-between -would help keep the losses or inadequacies, to a minimum.

tax cuts, It's our money... forever.

loopholes, They shouldn't be there to begin with... a tiered flat tax would eliminate loopholes all together.
 

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Repeal the 16th, that and the Fed started all the problems. Income tax is just another thing that repressive regimes do to keep the poor, poor.
 

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Discussion Starter #4
Not much replies here for a room fulla "Your ****in it all up...."
opinions....:D
 

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I am work for a large international accounting firm. Our clients range from GE to Boeing to DuPont....

Example:

The U.S. corporate tax rate is 39%
The corporate tax rate in Ireland is 12.5%

As a CEO/CFO of a large international corporation (with shareholders breathing down your back) would you rather pay tax on your income at a rate of 39% or 12.5%?

Yes, most opt for the 12.5%. These large international corporations establish sophisticated joint ventures and/or SPE's (special purpose entities) that are "legal". The U.S. based corporation is able to source income to these JV's or SPE's that are located in a low tax rate country.

Because the U.S. tax rate is so high, it only makes business sense to establish (and pay tax) in a low rate country. If the U.S. tax rate was LESS, more of those tax dollars would go to the U.S. Treasury and not some foreign country.

Less is more!
 

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I am work for a large international accounting firm. Our clients range from GE to Boeing to DuPont....

Example:

The U.S. corporate tax rate is 39%
The corporate tax rate in Ireland is 12.5%

As a CEO/CFO of a large international corporation (with shareholders breathing down your back) would you rather pay tax on your income at a rate of 39% or 12.5%?

Yes, most opt for the 12.5%. These large international corporations establish sophisticated joint ventures and/or SPE's (special purpose entities) that are "legal". The U.S. based corporation is able to source income to these JV's or SPE's that are located in a low tax rate country.

Because the U.S. tax rate is so high, it only makes business sense to establish (and pay tax) in a low rate country. If the U.S. tax rate was LESS, more of those tax dollars would go to the U.S. Treasury and not some foreign country.

Less is more!
I agree 100%. As for the OPs question, whatever the rules are, they need to be predictable well into the future. Uncertainty - as we have now - causes business to sit on it's hands until it can do some predictable forecasting. The more the business community thinks the rules are going to change, the less aggresive they will be about investing in the future.
 

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I agree 100%. As for the OPs question, whatever the rules are, they need to be predictable well into the future. Uncertainty - as we have now - causes business to sit on it's hands until it can do some predictable forecasting. The more the business community thinks the rules are going to change, the less aggresive they will be about investing in the future.
Absolutely true. Businesses and individuals have no idea what to expect out of Washington. Will the Bush (2001) rates (and other tax provisions) be extended? If so, for whom? If so, how long? Permanently? Temporarily? Even if they are allowed to expire on 12/31/10, there will be certainty. I totally agree that we need certainty and predictability with regards to our tax legislation. The uncertainty of not knowing what our tax laws will be in 2011 and beyond causes small/medium businesses and their owners to stop investing, stop hiring, stop expanding, etc. until there is certainty and predictability in one of their major costs of doing business in America (taxes).
 

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Absolutely true. Businesses and individuals have no idea what to expect out of Washington. Will the Bush (2001) rates (and other tax provisions) be extended? If so, for whom? If so, how long? Permanently? Temporarily? Even if they are allowed to expire on 12/31/10, there will be certainty. I totally agree that we need certainty and predictability with regards to our tax legislation. The uncertainty of not knowing what our tax laws will be in 2011 and beyond causes small/medium businesses and their owners to stop investing, stop hiring, stop expanding, etc. until there is certainty and predictability in one of their major costs of doing business in America (taxes).
The same holds true for regulation. If the regulatory landscape is a moving target, business gets uneasy and contemplates going where the regs are more stable. In the Democrats big-government world, churning out new regs is a way of life. These regs pile on top of each other year after year with few of them ever going away which just slowly chips away at our national competitiveness. It's a perfect prescription for the destruction of the greatest economy the world has ever known.
 

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I am work for a large international accounting firm. Our clients range from GE to Boeing to DuPont....

Example:

The U.S. corporate tax rate is 39%
The corporate tax rate in Ireland is 12.5%

As a CEO/CFO of a large international corporation (with shareholders breathing down your back) would you rather pay tax on your income at a rate of 39% or 12.5%?

Yes, most opt for the 12.5%. These large international corporations establish sophisticated joint ventures and/or SPE's (special purpose entities) that are "legal". The U.S. based corporation is able to source income to these JV's or SPE's that are located in a low tax rate country.

Because the U.S. tax rate is so high, it only makes business sense to establish (and pay tax) in a low rate country. If the U.S. tax rate was LESS, more of those tax dollars would go to the U.S. Treasury and not some foreign country.

Less is more!
As an accountant I am surprised that you don't understand the difference between the actual tax rate and the realized tax rate. Yes the actual tax rate for corporations in the US is 39% but the actual realized tax rate is less than 13%. While some companies do actualy pay 39% many other companies pay no taxes at all and some get a tax credit as high as 59%.( in other words their tax bill is -59%)
The difference is that Ireland has no deductions for the corporations to take advantage of, but here in the US companies get thousnads of write offs. These write offs change the actual earnings that companies report and so reduce the amount of tax that they actualy pay. Another interesting metric of corparate tax contributions is the amount of taxes corporations pay compared to the GDP of the country. US corporations pay the lowest percentage of taxes compared to GDP of any other nation in the world.

While it may be better to lower the tax rate and remove all tax breaks, that system makes it much harder on start-up businesses who would have to pay taxes on income even if they made no actual profits. The system in place now helps start-ups become strong and vital tax paying companies.

You need to realy compare apples to apples when looking at tax rates around the world and US competetiveness on tax rates. Does a company realy care that the tax rate in Ireland is 12.5% when the actual rate they may pay in the US is 0, or less? No...and any CEO/CFO worth his weight is going to think this way.
 

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Absolutely true. Businesses and individuals have no idea what to expect out of Washington. Will the Bush (2001) rates (and other tax provisions) be extended? If so, for whom? If so, how long? Permanently? Temporarily? Even if they are allowed to expire on 12/31/10, there will be certainty. I totally agree that we need certainty and predictability with regards to our tax legislation. The uncertainty of not knowing what our tax laws will be in 2011 and beyond causes small/medium businesses and their owners to stop investing, stop hiring, stop expanding, etc. until there is certainty and predictability in one of their major costs of doing business in America (taxes).
As a business owner, I can tell you that I do not make any decisions about my business based on tax policy. If I need a machine to serve my customers I buy a machine. If I have excess capacity I don't buy a machine until I don't have excess capacity. If I need more men to satisfy customer demand I hire more men if I don't have enough work for all my men I first cut back on overtime then I lay off if I have to.
This idea that businesses calculate the tax rate and any programs to save tax dollars every day is laughable. Yes if there is a program that may gain some tax advantage this year and it will be gone next year, I may push up a purchase decision, but I am not up nights thinking of ways to save a few thousand dollars on my taxes. I am thinking every minute of every day about how to make my customers want to do more business with me, and that is what most successfull businesses think about every day.
 

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As an accountant I am surprised that you don't understand the difference between the actual tax rate and the realized tax rate. Yes the actual tax rate for corporations in the US is 39% but the actual realized tax rate is less than 13%. While some companies do actualy pay 39% many other companies pay no taxes at all and some get a tax credit as high as 59%.( in other words their tax bill is -59%)
The difference is that Ireland has no deductions for the corporations to take advantage of, but here in the US companies get thousnads of write offs. These write offs change the actual earnings that companies report and so reduce the amount of tax that they actualy pay. Another interesting metric of corparate tax contributions is the amount of taxes corporations pay compared to the GDP of the country. US corporations pay the lowest percentage of taxes compared to GDP of any other nation in the world.

While it may be better to lower the tax rate and remove all tax breaks, that system makes it much harder on start-up businesses who would have to pay taxes on income even if they made no actual profits. The system in place now helps start-ups become strong and vital tax paying companies.

You need to realy compare apples to apples when looking at tax rates around the world and US competetiveness on tax rates. Does a company realy care that the tax rate in Ireland is 12.5% when the actual rate they may pay in the US is 0, or less?
Machine, I'm not going to explain the intricacies of our cross-boarder tax laws on this Vette forum. I think you are referring to "effective" rate and "marginal" rate. I'm not sure what you mean by actual and realized tax rate. Nonetheless, I am very familiar with deductions, credits, offsets, etc. Most major U.S. corporations, AFTER claiming all applicable deductions, credits, offsets, etc. would pay 39% of their NET taxable income to the U.S. federal coffers as opposed to a much lower rate ON THE SAME TAXABLE INCOME in a tax-haven foreign country.

There is a reason why large multinational corporations pay our firm hundreds of thousands of dollars to assist them with establishing presence in more tax-friendly countries.

Smaller U.S. businesses, without a global presence, are stuck with paying our corporate tax rates. Start-ups generally pay no tax (because, as you mentioned, deductions/credits exceed GROSS income) or they may pay 15% - 25% based on the graduated U.S. tax rate scale.
 

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and any system of governance which is controlled by a tax base or subsidy can't work on anything less than a four year cycle. To expect that an agency can move (stop/start) subisidies in a short window is wishful.

Things that need to occur is our total gov't accounting system needs to change. we need to be rewarded for savings.
There have been many years as a commander I would have been able to save in some areas if it meant In the future I could buy new furniture.. Unfortunately few USG agencies have the ability to fund items as working capitol or stock funds. our current program is to spend it all or get cut that much for next year.. and we are never funded for depreciable items.
 

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As a business owner, I can tell you that I do not make any decisions about my business based on tax policy. If I need a machine to serve my customers I buy a machine. If I have excess capacity I don't buy a machine until I don't have excess capacity. If I need more men to satisfy customer demand I hire more men if I don't have enough work for all my men I first cut back on overtime then I lay off if I have to.
This idea that businesses calculate the tax rate and any programs to save tax dollars every day is laughable. Yes if there is a program that may gain some tax advantage this year and it will be gone next year, I may push up a purchase decision, but I am not up nights thinking of ways to save a few thousand dollars on my taxes. I am thinking every minute of every day about how to make my customers want to do more business with me, and that is what most successfull businesses think about every day.
Fortunately (or unfortunately) you are in a minority in my world. Tax legislation is a significant driver of how, when and where businesses operate. Yes, there are many other factors to consider as you mentioned above, but taxation plays a significant role to most other large scale businesses.
 

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Fortunately (or unfortunately) you are in a minority in my world. Tax legislation is a significant driver of how, when and where businesses operate. Yes, there are many other factors to consider as you mentioned above, but taxation plays a significant role to most other large scale businesses.
From what I have seen the most troublesome unpredictability that large businesses have to deal with is the stock market. The fickel nature of the market forces companies to constantly meet "expectations" which negate long term planning. Out of all of my customers, one is now a publicly traded company. Luckily for me they are traded on the london Exchange and so are not as "hampered" by the market. I did have another customer that was traded on the NY stock exchange. They had layoff after layoff to boost stock prices, even though they had good sales and products. Unfortunatly thier sales didn't meet expactations since they were in the super competetive wafer metrology industry. Soon they had no more engineers to design new products. They are gone now.
 

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Machine, I'm not going to explain the intricacies of our cross-boarder tax laws on this Vette forum. I think you are referring to "effective" rate and "marginal" rate. I'm not sure what you mean by actual and realized tax rate. Nonetheless, I am very familiar with deductions, credits, offsets, etc. Most major U.S. corporations, AFTER claiming all applicable deductions, credits, offsets, etc. would pay 39% of their NET taxable income to the U.S. federal coffers as opposed to a much lower rate ON THE SAME TAXABLE INCOME in a tax-haven foreign country.

There is a reason why large multinational corporations pay our firm hundreds of thousands of dollars to assist them with establishing presence in more tax-friendly countries.

Smaller U.S. businesses, without a global presence, are stuck with paying our corporate tax rates. Start-ups generally pay no tax (because, as you mentioned, deductions/credits exceed GROSS income) or they may pay 15% - 25% based on the graduated U.S. tax rate scale.
This article explains it far better than I can.

http://www.reclaimdemocracy.org/corporate_welfare/real_tax_rates_plummet.php

And this one shows our standing in the world..

http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf
 

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Fortunately (or unfortunately) you are in a minority in my world. Tax legislation is a significant driver of how, when and where businesses operate. Yes, there are many other factors to consider as you mentioned above, but taxation plays a significant role to most other large scale businesses.
:agree: And it plays a significant role with very small businesses as well. Some people just have so much money, they are begging the government to tax them more. But they are ignorant to the fact that most business owners aren't in that situation, and they have to pay attention when an increase of this size is looming.
 

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From your first link - this is what I was referring to in my first post:

How they do it...

Offshore tax sheltering. Over the past decade, corporations and their accounting firms have become increasingly aggressive in seeking ways to shift their profits, on paper, into offshore tax havens, in order to avoid their tax obligations. Some companies have gone so far as to renounce their U.S. "citizenship" and reincorporate in Bermuda or other tax-haven countries to facilitate tax sheltering activity.

Not surprisingly, corporations do not explicitly disclose their abusive tax sheltering in their annual reports. For example, Wachovia's extensive schemes to shelter its U.S. profits from tax are cryptically described in the notes to its annual reports merely as "leasing." It took extensive digging by PBS's Frontline researchers to discover that Wachovia's tax shelter involved pretending to own and lease back municipal assets in Germany, such as sewers and rail tracks, a practice heavily promoted by some accounting firms. Other tax shelter devices, such as abuses of "transfer pricing," also go unspecified in corporate annual reports. Nevertheless, corporate offshore tax sheltering is estimated to cost the U.S. Treasury anywhere from $30 billion to $70 billion a year, and presumably the effects of these shelters are reflected in the bottom-line results of what companies pay in tax.
 
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