That's exactly why we need a LOWER tax rate on businesses. Businesses
doing this shows the effect of "taxing businesses" at too high a rate.
We need to have near the lowest in the world. China is one of the lowest
tax rates on businesses and their rate is 35%.
We want businesses to have more money, not less.
With more money, more will be paid to management and workers, invested in
buildings and new production facilities, production research etc.
Also business profits go to share holders, like you, Stan.
You are the beneficiary of the earnings of good businesses making lots of
money, money that eventually goes into your pension fund.
73
DR
On Tue, Sep 19, 2017 at 12:32 PM, Redacted sender sblumen123 for DMARC <
dmarc-noreply@xxxxxxxxxxxxx> wrote:
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Wonkblog <http://www.washingtonpost.com/news/wonk/>
Tax-avoiding mergers allowed U.S. companies to lower their initial tax
bill by $45 million, CBO says
By Carolyn Y. Johnson
<https://www.washingtonpost.com/people/carolyn-johnson/> September 18 at
5:51 PM
<carolyn.johnson@xxxxxxxxxxxx?subject=Reader%20feedback%20for%20%27Tax-avoiding%20mergers%20allowed%20U.S.%20companies%20to%20lower%20their%20initial%20tax%20bill%20by%20$45%20million,%20CBO%20says%27>
<http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/wonkbook-five-questions-on-the-irs-mess/lawmakers-trying-to-avert-fiscal-cliff-to-prevent-short-term-shock-to-the-economy-2/>
<http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/wonkbook-five-questions-on-the-irs-mess/lawmakers-trying-to-avert-fiscal-cliff-to-prevent-short-term-shock-to-the-economy-2/>
American companies that merged with foreign companies to avoid taxes paid
$45 million less in taxes on average in the first year after the
move, according to a new analysis by the Congressional Budget Office
<https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53093-inversions.pdf>
.
If current policy does not change, the agency projects future tax-avoiding
deals will reduce tax receipts from corporations by 2.5 percent in 2027 —
or $12 billion.
The idea behind the business maneuver, called a corporate inversion
<https://www.washingtonpost.com/business/economy/pfizers-tax-avoiding-megamerger-with-allergan-sparks-outcry/2015/11/23/cced417c-9218-11e5-b5e4-279b4501e8a6_story.html?utm_term=.4cec4a973a4b>,
is simple: a U.S. company merges with a foreign one and moves its
headquarters abroad, avoiding the high U.S. corporate tax rate of 35
percent on foreign income.
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That effectively turns the U.S. corporation into a foreign company, taxed
at the rate of its new home country.
According to the CBO analysis, companies that inverted between 1994 and
2014 experienced, on average, a $65 million drop in U.S. taxes in the
financial year after the deal was complete. Their tax bills only dropped by
$45 million, however, because they were paying more foreign taxes.
The first inversion occurred in 1983, according to CBO, but the deals have
become notorious in recent years, with critics calling them a sign of the
broken U.S. corporate tax code.
Politicians on both side of the aisle agree that inversions are a problem;
on the campaign trail, President Trump
<http://www.businessinsider.com/donald-trump-pfizer-allergan-deal-inversion-2015-11>
criticized
a proposed deal that would have allowed pharmaceutical giant Pfizer to
leave the country to avoid taxes and President Obama
<https://www.washingtonpost.com/business/economy/obama-companies-that-denounce-us-citizenship-for-lower-taxes-are-insidious/2016/04/05/cf43a2bc-fb41-11e5-886f-a037dba38301_story.html?tid=a_inl&utm_term=.6cd4faad213d>
called
inversions one of the most “insidious tax loopholes out there.” But the
sides have not agreed on how to address the problem, with Democrats
introducing
legislation <https://www.congress.gov/bill/114th-congress/senate-bill/198> to
stop inversions and Republicans calling for comprehensive tax reform
<http://thehill.com/policy/finance/275160-gop-tax-writers-criticize-treasurys-approach-on-offshore-tax-deals>
.
The practice has drawn more political scrutiny in recent years, due to an
increase in the scale of the mergers being considered.
In the first nine months of 2014, 10 companies — with total assets of $300
billion — proposed inversions. Then, the Obama administration tightened the
rules around such deals, making them less advantageous. Some of the
biggest proposed mergers
<https://www.washingtonpost.com/business/economy/pfizer-allergan-call-off-160-billion-merger-after-us-moves-to-block-inversions/2016/04/06/4fd55446-fc11-11e5-80e4-c381214de1a3_story.html?utm_term=.9ee018c54dad>
collapsed.
CBO is optimistic that the trend is slowing. Companies seeking to dodge
taxes by inverting will have more trouble going forward, the agency said.
That's because the benefits will not always outweigh the costs, regulations
could make it harder to pursue the strategy, or for practical reasons —
there simply may not be a foreign company to merge with in a low-tax
country.
<http://www.washingtonpost.com/blogs/wonkblog/wp/2017/09/18/tax-avoiding-mergers-allowed-u-s-companies-to-lower-their-initial-tax-bill-by-45-million-cbo-says/capture-71/>
<http://www.washingtonpost.com/blogs/wonkblog/wp/2017/09/18/tax-avoiding-mergers-allowed-u-s-companies-to-lower-their-initial-tax-bill-by-45-million-cbo-says/capture-71/>
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Carolyn Johnson is a reporter covering the business of health. She
previously wrote about science at The Boston Globe.
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