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(3) repatriating ... Very few other countries will tax foreign earnings the way the US does. If you were a company would you want to lose 35% of your money to

(3) repatriating ... Very few other countries will tax foreign earnings the way the US does. If you were a company would you want to lose 35% of your money to spend it in the US, or just wait to find a project overseas? That tariff is a much higher bar for local investment. And trust me, they have projects they want to spend money on. Most of the money would probably get paid out in dividends if it was only a one-time thing (ala 2004), since you don't want to start projects you cannot fund in the future, but even that pumps more money into other projects in the US indirectly.

Retric 10y ago
You can deduct forensic taxes from US taxes owed so it's a long way from 35% most of the time.
- chris_va 10y ago
  Except most of the money is sheltered using legal tax avoidance ala Dutch Sandwich (nice job EU), so maybe 30%? Either way, CFOs do not like to waste money.
  - WildUtah 10y ago
    The EU is deepening the problems with non-territorial US taxes with its loony tax loopholes. Still, the USA could just end the problem entirely by going territorial.
    - chris_va 10y ago
      That makes very little sense. Why would the US be entitled to money earned in another country by a non US entity?
      - Retric 10y ago
        I don't think companies should be able to operate subsidiary's because it's not a separate entity. This would prevent a lot of bad behavior and I am unsure of any net gains for society.
    - kspaans 10y ago
      Or more countries could go non-territorial like the US!
    - yxhuvud 10y ago
      What are you talking about? EU is not deepening anything but rather actively combating tax loopholes.
mdorazio 10y ago
Companies have these massive cash reserves because they are massively profitable each year and need somewhere to store the excess. So I fundamentally disagree with your argument that they have projects they want to fund and don't because they can't easily access the overseas cash. We're talking about tens of billions of dollars here for many companies, not $100M to sink into a new department or research project, which they can either easily fund out of operating revenue or get a loan for at less than 5% interest. As I stated in another comment, the only winners of the 2004 repatriation holiday were shareholders and executives, not the American public. That's a big reason why people don't want a repeat.
- nemothekid 10y ago
  >Companies have these massive cash reserves because they are massively profitable each year and need somewhere to store the excess. To be clear here, American companies aren't moving cash from the US out to overseas to hide them from the IRS - this is cash that was generated overseas. For every iPhone sold in the US, Apple is paying an appropriate tax. A similar way to look at this is, lets say you moved to Russia, started a new life, with a new job, and every time you wanted to send money to your mom, the US took a 35% cut. (I'm aware that American expats still have to pay taxes as well).
  - kig 10y ago
    It's more like you moved to London, got a new lucrative job, and paid zero taxes by squirreling all your income away into a tax haven. And then you want to send that money to your US bank account without paying taxes to anyone. As a result your new London friends have to pay more tax to pick up your bill on unpaid UK taxes, and your mom in the States has to pay more tax to pick up your bill on unpaid US taxes.
    - walshemj 10y ago
      Tell me how working in London as I do I can, " squirrel away all your income away into a tax haven"

Retric 10y ago

You can deduct forensic taxes from US taxes owed so it's a long way from 35% most of the time.

chris_va 10y ago
Except most of the money is sheltered using legal tax avoidance ala Dutch Sandwich (nice job EU), so maybe 30%? Either way, CFOs do not like to waste money.
- WildUtah 10y ago
  The EU is deepening the problems with non-territorial US taxes with its loony tax loopholes. Still, the USA could just end the problem entirely by going territorial.
  - chris_va 10y ago
    That makes very little sense. Why would the US be entitled to money earned in another country by a non US entity?
    - Retric 10y ago
      I don't think companies should be able to operate subsidiary's because it's not a separate entity. This would prevent a lot of bad behavior and I am unsure of any net gains for society.
  - kspaans 10y ago
    Or more countries could go non-territorial like the US!
  - yxhuvud 10y ago
    What are you talking about? EU is not deepening anything but rather actively combating tax loopholes.

mdorazio 10y ago

Companies have these massive cash reserves because they are massively profitable each year and need somewhere to store the excess. So I fundamentally disagree with your argument that they have projects they want to fund and don't because they can't easily access the overseas cash. We're talking about tens of billions of dollars here for many companies, not $100M to sink into a new department or research project, which they can either easily fund out of operating revenue or get a loan for at less than 5% interest. As I stated in another comment, the only winners of the 2004 repatriation holiday were shareholders and executives, not the American public. That's a big reason why people don't want a repeat.

nemothekid 10y ago
>Companies have these massive cash reserves because they are massively profitable each year and need somewhere to store the excess. To be clear here, American companies aren't moving cash from the US out to overseas to hide them from the IRS - this is cash that was generated overseas. For every iPhone sold in the US, Apple is paying an appropriate tax. A similar way to look at this is, lets say you moved to Russia, started a new life, with a new job, and every time you wanted to send money to your mom, the US took a 35% cut. (I'm aware that American expats still have to pay taxes as well).
- kig 10y ago
  It's more like you moved to London, got a new lucrative job, and paid zero taxes by squirreling all your income away into a tax haven. And then you want to send that money to your US bank account without paying taxes to anyone. As a result your new London friends have to pay more tax to pick up your bill on unpaid UK taxes, and your mom in the States has to pay more tax to pick up your bill on unpaid US taxes.
  - walshemj 10y ago
    Tell me how working in London as I do I can, " squirrel away all your income away into a tax haven"