4 ms·

Can you explain why a tax cut would lead to a huge bill?

• goldenkey 9y ago
  They decided to finally pay their (lower) taxes to move them into U.S banks instead of illegally holding the funds offshore
  • xbmcuser 9y ago
    1. It was not illegal for them to keep the money offshore 2. They had to pay 1 time tax on money held offshore. once it is paid they still don't need to bring it back just it won't cost them anything to bring back.
  • dragonwriter 9y ago
    They were already, largely, in US banks. The offshore status was entirely an accounting status, and there was nothing illegal about it. It was tax avoidance, not evasion.
  • tanilama 9y ago
    Illegal? In what sense?
    • tedunangst 9y ago
      In the sense that if I were god emperor I would have made a law against it.
• advisedwang 9y ago
  The corporate tax rate was cut, but it was also expanded to include foreign income. Companies with offshore holdings that never had income tax paid had to pay a one-off tax bill on that. Google paid $9.9B in this one-off tax payment, which is larger than their entire margin for the quarter.
  • polskibus 9y ago
    If their offshore holdings are profits made offshore, then shouldn't those profits be taxed offshore? Is this what Trump really did, taxed offshore before EU does it, so the EU taxes will be much lower?
    • iainmerrick 9y ago
      If their offshore holdings are profits made offshore, then shouldn't those profits be taxed offshore? Typically, the profits are held in tax havens, with low or zero tax. So effectively they are not being taxed already, due to loopholes in the tax code.
• toast0 9y ago
  The tax bill changed many things. It reduced many tax rates and it sort of eliminated corporate taxes on income earned outside the country. It added a corporate alternative minimum tax on global income that will mostly apply when income is taxed below 10% in the country where it is earned. It also added a one time tax on any earnings held overseas from prior tax years. The one time tax is hitting companies that were holding earnings overseas. The corporate AMT will hit companies with very low global taxes.
  • polskibus 9y ago
    Earnings earned where? Surely it's ok to keep earnings earned overseas, overseas?
    • refulgentis 9y ago
      Outside the country. Yes.
    • toast0 9y ago
      Until 2017, As a US corporation, earnings earned overseas were taxable in the US, but the taxes were only assessed if the earnings were brought into the US (repatriated). Since 2018, as a US corporation, earnings earned overseas are not taxable in the US in the general tax (20%ish); they are taxable in the alternative minimum tax (10%ish), but there is a credit for taxes paid overseas. As a transition, in the 2018 tax year, any prior earnings earned overseas and not previously repatriated are subject to a one time transition tax.