¶ … Rubin (2016), President-elect Trump has vowed to stop inversions, but has offered a novel solution: a lower corporate tax rate. Trump's theory is that a lower corporate tax rate would "sharply reduce companies' incentives to take a foreign address," (p. 1). The corporate tax rate is currently at 35%. Trump and his pick for Treasury secretary, Steven Mnuchin, suggest that 15% would generate sufficient federal revenues while discouraging companies from establishing themselves abroad or circumventing taxes through loopholes. One of the ways foreign-based firms evade taxes is through earnings stripping, essentially borrowing from themselves to generate interest deductions built into the current codes (Rubin, 2016). This helps the companies avoid paying the 35%, also pushing their income into jurisdictions with lower tax rates (Rubin, 2016). Having a foreign address offers additional benefits, and many companies have multiple inversions, something that came to light when Pfizer announced their plans to go offshore by using subsidiaries. The government responded to the internal borrowing with an earnings stripping rule that "relabeled some internal debt as equity and imposed steep compliance costs," (Rubin, 2016). Countries have also been expatriating their earnings to avoid paying American...
High corporate tax rates sound good in theory: extract money from the wealthiest to help reduce inequitable wealth. Yet the numbers tell a different story. High corporate tax rates do not promote wealth equity, and nor does it promote a healthy Treasury.
The 35% corporate tax rate is exorbitant. Compared with other countries, it ends up being on par with Chad, Congo, and Zambia -- hardly emblems of good governance, let alone strong economic stability and growth (Bischoff, 2016). Among wealthy nations, only Belgium comes close with a corporate tax rate of 33%. More sensible nations like Canada has a high but manageable corporate tax rate of 25%. Japan's is 22%, Germany's is only 12.5%. Clearly, corporate tax rates are not linked to good governance or economic growth.
Somewhere in the range of 15% seems manageable. In fact, after inverted companies weasel their way out of tax loopholes, their effective tax rates come in at about that rate (Bischoff, 2016). With a cleaner, simpler system in which companies based in the United States remain in the United States, overall Treasury revenues could end up climbing in the long run because more companies would be opting out of oversees presence in favor of the more business-friendly climate…
The general fund collects over 86% of the total tax revenues and is the primary funding source for most commonwealth agencies. General fund tax revenues The largest significant source of tax revenues net of refunds is personal income tax. Reported personal income tax accounts for 38% of all tax revenues reported. Sales tax, which represents a tax on various items purchased by consumers, is the second largest category. Reported sales tax
Reorg and Tax Returns There are a seven types of reorganizations, and each type has different consequences. The client is considering a Type B reorganization, which is an acquisition. Two of its subsidiaries have been acquired this way. The client is considering type A, which is a merger or consolidation; Type C, which is an acquisition, with liquidation, and Type D, which is a transfer. This paper will outline the differences
Corporate Governance As some queries about corporate governance were there ever since 1932 - the period of Berle and Means, the expression of the concept of Corporate Governance was not found in English vocabulary until 25 years ago. However, in the previous two decades, matters relating to corporate governance have gained importance in academic literature as well as in public policy deliberations. Corporate governance came to be acknowledged as being synonymous
(Rahn, 2004) "German, French, Canadian, or even Swedish company will pay a lower corporate tax rate on profits earned in its home country, and little or no tax to its home government on any foreign income." (Rahn, 2004) In comparison, an Irish company pays twelve percent tax for income in Ireland and nothing on income from abroad. On the other hand a U.S. company doing business in U.S. And Ireland
was sold off in March of 2002 (www.stadium-electronics.com/investor-relations/corporate-history/). KRP Power Source was acquired in 2006, a key acquisition as KRP specializes in the distribution of power supplies. In 2007, Ferrus Power was acquired, and additionally was a key acquisition due to its specialization in custom power supplies. 2008 of October, Fox Industries Limited was acquired, which produced custom made power supplies and EMC filter products; November was the acquisition
Article 3: Evaluation of high- and low- risk investment projects Ispas, Constantin, Eduard Lovin, & Dana Tilina. (2009). Risk analysis in investment projects. Annals of DAAAM & Proceedings. Retrieved October 23, 2010 at FindArticles.com http://findarticles.com/p/articles/mi_7105/is_2009_Annual/ai_n53386583/ Accurately evaluating the technical, economic and social risk of a new investment project is critical. Common potential risks include errors in evaluating opportunity growth; errors in data-gathering; misevaluating the priority of the economic objective to be achieved, mis-projections