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...and 20 to 10 is 50%. I chose the smaller % as it's still substantial. For your widget company, it does matter! ;-) What widgets you make, your price, your
by caminante 10y ago
...and 20 to 10 is 50%. I chose the smaller % as it's still substantial.
For your widget company, it does matter! ;-) What widgets you make, your price, your price relative to competition, market share protection, pricing power, where you build your factory, PP&E decisions, and more all depend on your tax rates. I promise, and want to compete against firms that overlook these parameters.
For GM, you're overlooking other (mis)management decisions that will show up in the share price.
Right now, MSFT is facing just such an issue re: re-patriating money from overseas. If there were a one time foreign tax holiday as floated by Obama, MSFT would choose very different decisions than the status quo in terms of buy backs and R&D spend. In terms of operations changing, I guarantee they'd re-think their debt and their product mix within their 3 reporting segments. Some products wouldn't be profitable enough to sell if the profit margin shifted 2-3%.
- Retric 10y agoI don't nessisarily disagree with you examples. But, I think you are misssing the forest for the trees. I have had several successful CEO's all tell me to ignore taxes. That does not mean you install or don't install solar panels based on tax breaks. It can be very important, but it's generally premature optimization. Further, it's not the top tax rate that is important it's differential tax rates aka A @X or B @ less than X. MSFT's re-patriating money is a good problem to have. They may see a tax holiday in the next administration or they may not. But again, it's getting to that point is the issue.
- caminante 10y agoI agree that taxes aren't the primary determinant of a business' success. I'm assuming that's what your acquaintances were arguing.