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Corporate Tax Changes
There has been a proposal to reduce the corporate tax rate to 25%. ased on research, the United States has the worst tax codes in the entire world. ecause of the corporate tax situation, multinational corporations are holding an estimated $1.7 trillion in earnings abroad to avoid the 35% tax rate (Yang, 2012). Policymakers are deliberating compromise in an overhaul of the tax code for the year 2013.
The Obama administration has proposed a "global minimum tax" that would apply to income earned in any country. This is the most viable plan due to the fact of U.S. GAAP is conforming to IFRS rules to form international standards. Where all corporations do not pay the same tax rates from industry to industry, even from year to year, it would make the tax rate codes more fair for all corporations whether they are a multinational or domestic firm.…… [Read More]
"Mr. Pink owns all the shares of XYZ Corporation a subchapter C corp. And leases property to XYZ Corporation. XYZ Corporation has Earnings and Profits of one million dollars for the taxable year 2014 before paying Mr. Pink a salary. XYZ Corporation has cash of $1.2 million and disposable appreciated property with a FMV of $500,000 and a basis of $200,000."
• hat is the best way to split income between XYZ Corporation and Mr. Pink to minimize double tax liability? Consider what may be "Constructive Distributions."
• hat doctrines apply?
A constructive distribution allows members of the board of directors to take payments in ways other than just cash through property transactions of one form or another. For instance, when a company rents its offices from a shareholder and pays in excess of the office's fair market value, the company's rent is considered a constructive dividend…… [Read More]
ubin (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 (ubin, 2016). This helps the companies avoid paying the 35%, also pushing their income into jurisdictions with lower tax rates (ubin, 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…… [Read More]
Corporate Taxation Provisions and Principles
Congress' eaction to the Holding in Chamberlin v. Commissioner (1953)
Prior to passage of the IS Tax Code by the 83rd Session of Congress in 1954 the tax status of stock dividends relative to its recipient was debatable, but this did not stop corporate tax planners from devising 'preferred stock bailouts' (Bailine, 2004). Under normal circumstances, when an owner of a company invests earnings and profits in another company through the purchase of common stock, the monies received are treated as a dividend for tax purposes. Dividends were taxed at a much higher rate than capital gains, so to avoid paying the additional tax the preferred stock bailout was conceived. Essentially, a preferred stock bailout uses a third party to exchange preferred stock for cash under more favorable capital gains treatment.
The ambiguous tax status of preferred stock bailouts was rendered unambiguous in…… [Read More]
eorg and Tax eturns
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 between these in terms of structure, and in terms of their tax consequences. Now, the client should be aware that tax reasons are a terrible reason to do things like mergers and acquisitions because of the profound impact those activities can have on corporate strategy, but it is always good to know the tax consequences of the different types of corporate reorganization before engaging in them.
Type A The Type A reorg is merger and consolidation. In this, the…… [Read More]
Corporate Tax esearch
Under section b, there would be a gain recognized if the transferor were to make an exchange that involved more than just stock, for example property or money. Such a transaction would be the transferring of property by the transferor in exchange for both stock and cash. In that situation, the gain would be recorded on the excess of the fair market value of property plus the money. That is to say if the transferor were to gain more than what the property was worth, then a gain is recorded for tax purposes.
I would consider this to be a fair transaction. When assets are transferred, they should be transferred at fair value. If they are not transferred at fair value, then this should incur taxation. To avoid taxation, the transfer should be done at fair market value. Under rule 351, a transfer that is done entirely…… [Read More]
Temp. Reg. 15A.453-1(b)(3)(i). Similarly, a taxpayer engaging in a section 1031 exchange is treated as receiving "boot" (and is required to recognize any realized gain) to the extent that the liabilities assumed by the exchange counterparty exceed the liabilities assumed (plus the cash paid) by the taxpayer in the exchange. Reg. 1.1031(b)-1(a) and -.
Liability assumptions can also result in gain recognition or other tax consequences when property is transferred to or from a corporate entity or partnership. For instance, when a taxpayer transfers property to a controlled corporation in exchange for stock, the taxpayer is required to recognize gain under section 357- if the corporation "assumes" liabilities of the taxpayer in excess of the tax basis of the transferred property.
Similarly, a liability "assumed" by a partnership in connection with a property contribution by a partner can, in certain circumstances, be included in the sale price of property deemed…… [Read More]
was sold off in March of 2002 (www.stadium-electronics.com/investor-relations/corporate-history/). KP Power Source was acquired in 2006, a key acquisition as KP 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 of EMS provider Zirkon Limited; 2010 saw the sale of the non-core asset Branded Plastics Business (www.stadium-electronics.com/investor-relations/corporate-history/).
Stadium managed to acquire the distribution and manufacturing units of many of its competitors. Such strategic acquisition from Stadium is a strategic target for a bigger competitor to discover the value in Stadium and acquire the company before they become too large for acquisition. When reviewing the acquisition strategy of Stadium, one must ask whether the company was preparing its balance sheet to be…… [Read More]
ill ignoring any pollution problem be beneficial to the community? Most businessmen would probably answer that question with a negative, but does that mean they feel compelled to do anything about the problem, even if their corporation was the one that caused it. Currently the answer would be no, but if they were going to be penalized for not doing so, and that penalty was coupled with an incentive for accomplishing the objective, then it would probably be a no-brainer, even based on the businessman's viewpoint.
Peter Coy states; "A few polluters that cannot easily reduce emissions will pay a substantial cost, but those with the technology to cut emissions cheaply will have a far greater incentive to do so than they would have under traditional regulation." The same technology used to accomplish a cleanup, can also be used for other reasons, which is an additional benefit to the corporations.…… [Read More]
tax system of one country with that of another is an exercise fraught with dificulties and ultimately doomed to failure . tax system will never be much more than a reflection of strongly national cultures and forces. discuss this statement in the light of your knowledge of comparative tax system in developing and/or developed countries i
The following pages focus on analyzing the factors of influence on different countries' taxation systems. The paper begins with an introductory section that allows readers understand the point-of-view used in this paper. The following section refers to describing the taxes pand taxation systems used by most countries and their objectives, in order to understand the similarities and differences between these taxation systems. The paper continues with the analysis of several factors that influence countries' tax system design, like cultural factors, technological developments, and natural resources. In order to exemplify this, the taxation…… [Read More]
To minimize the impact on business and property owners, the tax should be one that they can apply at the consumer level. An excise tax raises the cost of goods, whereas a sales tax does the same thing but forces the consumer to pay. A property sales tax would already be applied at the consumer level.
As a citizen, I will not necessary see benefit from these taxes -- it depends on what the taxes are used for. ith regards to paying other taxes, I am only concerned with my total tax burden. Shifting taxes from one type to another, if it for me is tax neutral, is irrelevant. I would prefer that my taxes are reduced overall, and if these taxes facilitate that, then I would prefer them.
IRS. (2008). Business taxes. Internal Revenue Service. Retrieved February 11, 2010 from http://www.irs.gov/businesses/small/article/0,,id=98966,00.html… [Read More]
Corporate inversion is the strategy adopted by corporate organizations to reincorporate in foreign companies to escape the tax burden. In other word, corporate inversion is the strategy used by organizations to earn significant proportion of their income from foreign countries and leave the income in those countries in order to avoid the U.S. tax rate. In the United States, the government levy taxes on income realizes within the country and from foreign sources. However, organizations use corporate inversion strategy by incorporating in countries with less stringent tax requirements or corporate governance requirements to avoid the U.S. high tax rates.
The United States tax rate is the highest among the advanced countries where corporation pay corporate tax rate as high as 35%. Apart from taxing the income realized domestically, the government also taxes the income organizations bring into the United States from other countries. Thus, corporate inversion is the strategy employed…… [Read More]
Tax Planning -- Employer (II of II)
Tax Planning - Employer
The marketplace that businesses operate in has become more and more globalized and international in nature, not to mention extremely competitive. This particular report will focus on the employer and their tax implications when it comes to operating and/or headquartering in one or more countries around the world. The prior report focused on the employee. While the implications for the employee are complicated and diverse enough, they become even more complicated when speaking of the employer, and for a number of reasons.
Just as there were a number of considerations relevant to the employee and their tax treatment, there are a number of tax considerations that USCo will need to consider for themselves and they are as follows:
The actual headquarters location (nation, state/province and county/city)
The actual locations outside of that home country (or state and city)…… [Read More]
Tax Avoidance & Firm Growth
What follows in the next few pages is a review of whether there is a correlation between tax avoidance with corporations and firm growth. Indeed, looking at the literature reveals that the evidence is mixed but that the overall answer is a condition "yes," that there can indeed be a link between tax avoidance and firm growth. To explain the conditional nature of the answer garnered, one can look to the work of Desai, Foley and Hines (2006) when they assert that "firms with sizable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens" (Desai, Foley & Hines, 2006). They further state that "one percent greater sales and investment growth in nearby non-haven countries is associated with a 1.5 to 2%…… [Read More]
Corporate Social esponsibility and Environmental Ethics
Abstract/Introduction -- No one can argue that the international business community is becoming more and more complex as a result of globalism. In turn, this complexity is driven by an increasing understanding of sustainability, going "green," and bringing ethical and moral philosophy into the business community. British Telecom, for instance, noted in 2007 that it had reduced its carbon footprint by 60% since 1996, setting itself a target of 80% reductions by 2016 (Hawser, 2007). Francois Barrault, CEO, BT Global Services, said that by supporting sustainability his company hoped not only to reduce its carbon footprint but also to attract younger people who prefer to work for environmentally and socially responsible companies. He didn't always think that way, though. Barrault said that when he first met former U.S. vice president and environmental activist Al Gore, who showed him pictures of icecaps melting, he thought…… [Read More]
Table of Contents (optional)
Louise is aged 50 and single. Since 1994 she has carried on a retail business as a sole trader. Her trading profits as adjusted for tax purposes and after capital allowances, for the year ended 30th April 2009 were $150,000.
The business is carried out from a number of valuable retail outlets, all of which are owned by Louise personally. These units have been acquired over a number of years since 1994 and their market values have increased considerably in recent years.
Apart from her single personal allowance tax credit, Louise is entitled to income tax relief in respect of $10,000, which she pays annually to a evenue approved pension scheme.
Louise's personal living expenses and other financial commitments total $50,000 per annum (including the contribution of $10,000 to the evenue approved pension scheme referred to above).
Louise is considering transferring her business to…… [Read More]
Another important issue to consider in the contraction of debt is represented by the impact of this debt on the company stakeholders -- employees, business partners, the public, and most importantly, the share holders. The primary scope of the economic agent is that of creating value for its stakeholders, but excessive debt could jeopardize this desire, especially since debt is money that has to be repaid and it as such reduces the future levels of profitability.
At the level of value creation, a crucial aspect to be analyzed is represented by the source of the debt to be contracted. On the one hand, there is the contraction of debt through loans, which are characterized by the fact that control and ownership of the company remains intact, but payments have to be regularly made; the payments are nevertheless tax deductible.
On the other hand, there is the contraction of…… [Read More]
As some queries about corporate governance were there ever since 1932 - the period of erle 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 with takeovers, financial restructuring, and activities of institutional investor's during this part of the era. Corporate Governance is now at a turning point. Several budding and up-coming economies that are on the path of development have identified by now that excellent corporate governance is vital for sustainable economic development. Furthermore, a lot are on the lookout for a novel or appropriate standard for making it relevant for their particular internal situation. (erle and Means, 1932)
The last ten years…… [Read More]
Political upheavals can work in a similar fashion, increasing the perceived risk of an investment without a direct corresponding increase in the potential rewards, as well as directly threatening the ability to transport goods, access and move capital, etc. (Peterson & Fabozzi 2002).
Differences in tax laws could also make it advantageous for firms to restructure their capital budget to show income and expenditures in the nations that have the most favorable tax incentives for such transactions, and can also heavily influence where capital is stored based on interest growth tax rates (Peterson & Fabozzi 2002). Transfer pricing also takes place with both parties attempting to maximize their return, agreeing on certain currencies of exchange, adjustment procedures, etc., contributing in no small way to the strategic budgeting and financing of a firm (Peterson & Fabozzi 2002; Vishwanath 2007). Strategic decisions that take into account non-financial consideration can also greatly influence…… [Read More]
It should not be treated as a separate exercise undertaken to meet regulatory requirements." (ICA, 29) Here is expressed a philosophical impetus that drives the focus of this research, that such compliance which will generally concern matters such as corporate accounting, the practice of internal oversight and the practice of financial transaction must be considered inextricable from other aspects of practical, procedural and legal operation in terms of its relevance and necessity.
The practice of corporate governance may perhaps best be understand from the perspective that deregulation has largely defined the processes and direction of the global economy across the two decades following the Cold ar and its inevitable opening of economic channels. This is because in practice, corporate governance is a concept which has suffered much neglect. To the point, the statistics availed by organizations such as the orld Bank and the International Monetary Fund illustrate that…… [Read More]
Both proposals were consequently amended and eventually accepted by the SEC.
The audit committee makes sure that the books aren't being cooked and that shareholders are properly informed of the financial status of the firm. Characteristically, the audit committee advocates the CPA firm that will audit the company's books, appraises the activities of the company's independent accountants and internal auditors, and reviews the company's internal control systems and its accounting and financial reporting requirements and practices. The compensation committee usually does the following: (1) recommends the selection of the CEO, (2) reviews and approves the appointment of officers who report directly to the CEO, (3) reviews and approves the compensation of the CEO and the managers reporting to the CEO, and (4) administers the stock compensation and other incentive plans. The suggested committee establishes experience for potential directors (Lunnie, 2007; pg. 90). It also puts collectively a list of candidates…… [Read More]
Common stockholders own a proportionate amount of ownership in the company, and receive dividends and votes for Board of Director members in proportion to their ownership of stock. Common stock yields higher returns, but owning common stock carries more risk, for the investor as "if a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders and preferred shareholders" ("Stock Basics: Different Types of Stock," 2007, Investopedia).
Preferred stock comes without voting rights, depending on the company, and yields a fixed dividend in perpetuity. Preferred stock holders are paid before common shareholders. "Preferred stock may also be callable, meaning that the company has the option to purchase the shares from shareholders at anytime for any reason" ("Stock Basics: Different Types of Stock," 2007, Investopedia). It is also possible for companies to issue different classes of stock with different voting rights. "For example, one class…… [Read More]
Corporate Social esponsibility
I attaching assignment paper write essay CS.
Given the heightened level of international operations and globalization, pressure is mounting for corporations to behave ethically. Corporations are forced to developing standards, policies and behaviors as a demonstration of their sensitivity to concerns of stakeholder. The policies behaviors and standards are what a European commission called corporate social responsibilities. The Commission defined corporate social responsibility (CS) as "a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis" Commission, 2001.
Complementing this definition, McWilliams and Siegel. (2001)
, said CS include all actions that are intended to forge, beyond the firm's interest, a social good, and is a requirement in law.
Composition Corporate Social esponsibility
Corporate social responsibility entails coming up with solutions specific to a society. The corporation is however, not forcefully charged with an…… [Read More]
The stock was trading on pink sheets at $0.165 per share at the end of April 2003" (8).
As noted above, one of the key factors involved in what happened at HealthSouth was the enormous pressure to perform in the increasingly competitive for-profit healthcare industry, pressure that directly affected the decisions that were made concerning the types of accounting practices that were needed to "deliver the goods," at least on paper. Although absent from the foregoing list, Scrushy's name appears time and again in the investigation that followed. According to Jennings, "Like Enron, orldCom, and Tyco, HealthSouth placed tremendous pressure on employees to 'meet the numbers.' In April 1998, CEO Richard Scrushy told analysts that HealthSouth had matched or beat earnings estimates for 47 quarters in a row" (8). The role played by Scrushy in engineering the corporate culture that would allow these estimates to be reported with a straight…… [Read More]
Sutherland was quite critical of why some crimes were defined as deviant, while society appears more tolerant of other transgressions. For example, individual theft is seen as causing great harm, while the harm caused by illegal pollution and the dissemination of hazardous waste are hardly recognized. In 2002, for example, the Carnival Company, a Florida-based cruise company which operates 40 ships, was convicted of falsifying its oil record books. The company under-reported the levels of oil in the bilge water it discharged. The higher levels of oil threatened ocean life. To avoid prosecution, Carnival agreed to pay $18 million in fines (Ferro 2003).
Though Carnival was guilty of wrongdoing, few members of the general public at the time would go so far as to define Carnival's actions as criminally deviant.
In summary, both functionalist and social labeling theories help to explain how corporate deviance are both defined and addressed in…… [Read More]
A preview of capital structure issues
In regards to the overall business environment, capital structure has profound implications of the business, irrespective of its industry. For one, a firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $40 billion in equity and $160 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example is referred to as the firm's leverage. This leverage has implications on the entire firm. For example, leverage in many respects is a double edges sword. On one hand, leverage can amplify gains for firms. However, if used incorrectly, leverage can also amplify loses. As such, firms must be cognizant of its capital structure as complacency can hinder overall business performance. Debt and equity financing, can have a profound implications on the…… [Read More]
Secondly, social welfare programs try to benefit most people. The recipients are not just poor households, the elderly, veterans, or students, but also farmers, petroleum companies, and affluent homeowners who receive support through tax deductions. And thirdly, social welfare does not substantially reduce income inequality. That is because the affluent receive far greater support from government-supported welfare than the poor. For example, deductions the affluent homeowners receive is worth $337 billion annually, which, as Macionis notes, "worth ten times as much as what the government spends to provide food assistance to low-income people" (43).
As Lauer and Lauer note, deriving from the study of consumer advocate Ralph Nader, there are four areas in the welfare system that are advantageous to the rich. Bailouts are given to large corporations to safeguard them from bankruptcy. Resource depletion, which allows large corporations to have the rights to minerals and timber leased at "bargain-basement…… [Read More]
In other words, on a balance sheet, outsourcing often makes sense. Take the following example of a study of one hundred domestically run company, where "on average," it cost an accounts payable department $16.54 to process a vendor payment," meaning that it cost the company "probably $10.50 - $11.00" to collect payment while using internal company labor on a permanent basis. (Cass, 2005) By out sourcing collection to a cheaper foreign or domestic firm, the original firm could save a great deal using workers in this relatively unobtrusive and mechanical capacity.
However, highly publicized, extensive use of outsourcing is not always so hidden -- for example when troubleshooting staff at a computer company may be technically literate, but not technically or colloquially fluent with the English language of most of the users of a 'help line.' Exploitation of local labor in poorer nations of Asia and Africa has incurred negative…… [Read More]
Another alternative for companies with uninsurable risks is mutualization. However, this category of insurance carries further risks that may not be suitable for all companies. The main problem is that mutual insurers require participants to be from a homogenous population, making this alternative unviable for a variety of clients. Some companies are however working on overcoming such problems to make mutualization less problematic for their investors.
Some insurance companies now recognize the main concern of organizations for cash flow in the event of a major loss. These insurers then offer such organizations solutions that guarantee cash flow in the form of a possible loan alternative, which is then to be repaid at a later time, when the company has mitigated its loss. Cash flow insurance can then be based upon income factors such as future royalties or rental income, that are generally not shown on current income statements.
Captives are…… [Read More]
WorldCom (CEO Bernard Ebbers) supported by years of profitability arising from the deregulation of phone companies was a fast moving stock that was highly toted by stock specialists as a must buy, even while it was seriously hemorrhaging from bad and fraudulent business deals and its own shoddy accounting, cover ups and bad investment deals.
WorldCom quickly supplanted at&T as the favorite of many investors, based heavily on Grubman's recommendations. The investment world quickly sang WorldCom's praises as a result. A technology magazine, Network World, named it one of the ten most powerful companies, behind only Cisco and Microsoft. After listing its virtues, the magazine went on to conclude that, "MCI WorldCom will probably be a keeper on this list." 18 as for its investment virtues, Grubman claimed that it was a traditional "widows and orphans" stock, to be held for the long-term. Based partially upon his recommendations, Fortune listed…… [Read More]
Corporate Strategies: Why are they so Important?
What is your biggest Professional Accomplishment?
Organizational Design and Culture
The 80s and Deregulation
The Election of Barack Obama
US rise as a world super power
Dominoes use the strategy by depending on the population and household. They believe that the population and household income are what needs to help when it comes to figuring out if people are willing to pay the pizza price and how much is the request for pizza. They think that this method is important because the population is what helps figuring out the demand for pizza as a consequence of the law of the demand, the bigger population the greater the demand. The household income will help likewise for the reason that the more disposable income the more individuals will purchase a common good. However, Pizza is…… [Read More]
Such problems are not overcome easily, but in time and with sustained efforts. To better understand my standpoint of defending the bailouts, consider what would have happened had the TAP never been implemented. All of the companies would have commenced bankruptcy procedures and the millions of workers they were employing would have been fired. At a first level, the state would have had to offer those former employees social aid. Then, the national purchasing power would have decreased even more, to impact the national demand and the national production. Also, the country's competitive position within the global market would have decreased dramatically. Overall then, while the bailouts may not have been fairly and efficiently allocated and while they did not revive the economy immediately, they did prevent it from taking an even more damaging turn.
Haugen, D., 2010, Bailout Money Should Not Be Used to Pay Executive Bonuses, Detroit:…… [Read More]
This has lead to a greater corporate awareness of their impact in the multitude of regions they work and sell in. It has lead the concept of Corporate Social esponsibility to become a highlighted feature in the nature of global business today.
There are numerous examples of successful implementations of Corporate Social esponsibility in today's marketplace. Take one for example, the Caremark Corporation which is typically known to Americans as the owners of the CVS chain pharmacy and drug stores. This corporation has expanded rapidly over the past few years and has now become a global powerhouse. Yet, within its store locations, even in nations many corporations might exploit, they sill over excellent employee health packages that are equitable with the ones they offer their American employees in the United States. This seemingly small token shows corporate responsibility for their employees. However, not all seemingly wholesome American companies end up…… [Read More]
Federal Government Tax
The main source of government income is taxes. The government taxes various organizations in the economy differently to ensure that adequate revenue is collected. Corporate use loopholes in the tax system to reduce the tax paid to the federal government. The government should eliminate these loopholes to improve tax collection. Some taxes such as gift and estate tax as they are counter productive. Changes made to the federal tax collection systems will increase the tax collected by increasing compliance.
esearch the most common tax loopholes used by corporations and partnership to avoid paying federal income tax. Discuss two (2) loopholes identified and what strategies you would recommend to the federal government for closing these loopholes.
The federal government gets most of its revenue from collection of tax used to fund most of the expenditure. The government should ensure that the tax collection avenues are free from loopholes…… [Read More]
American Tax System vs. Other Countries
The federal government first imposed an individual income tax in 1862 as an emergency means of financing the Civil ar. It also established the Bureau of Internal Revenue, predecessor of the Internal Revenue Service. Tax rates were 3% on income from $600 to $10,000 and 5% on income above $10,000. Later in the war the maximum rate increased to 10% of income." (Encarta)
My how times have changed. This paper will compare the tax systems of four different countries to the American tax system. The four countries that have been chosen are South Africa, Mexico, Hong Kong, and New Zealand..
First lets attempt to briefly (if that were possible) explain the American tax system.
The American Tax System
America has a progressive tax system meaning the greatest tax burden is on people who have the most income. The American tax system can be described…… [Read More]
The other side of this is that the companies have to spend finances in areas of language training or job training when they outsource. However, over the years, many U.S.-based companies haven't been discouraged by these additional costs because the overall costs of outsourcing with the job training session and language teaching and outplacement requirements are still far less when compared to the costs that they would have to endure when they don't outsource. If the overall costs of outsourcing was even marginally close to the costs on domestic hiring then there is a high probability that the overall right of firing of the employers would not be employed as much as it ahs been in the past. Of the negative perception of using the firing right at such an extensive level does create negative images which the company has to spend money to correct and rebuild into positive images…… [Read More]
Sourcing equity / ax management
Contrasting between global tax systems
National taxing has been proven to affect economic decisions made by MNEs. ypically, the settlement of taxation will take two different approaches, which are the worldwide approach and the territorial approach. he first approach will levy taxes based upon the income earned by firms that are controlled in the host country. herefore, an investor earning income internationally would find his/her income taxed by the local tax authorities. For example, a country such as the United States will tax the income earned based upon firms that are located in the U.S. whether the income is received by firms based in the United States, domestically sourced, and/or foreign sourced (Moffett, Stonehill & Eitemen, 2012). However, an issue that arises is that the taxation does not take into consideration the foreign companies that are based in the United States.
herefore, the territorial approach…… [Read More]
The United Kingdom is one of the largest markets in the world for Starbucks, with over 700 stores, by far the largest in Europe. The company ran into a scandal, however, when it was revealed that the company was not paying taxes in the UK, but was rather paying the taxes in the Netherlands and Switzerland, which has a much lower tax rate. Some politicians decided to make a name for themselves by attacking the foreign company (Starbucks' major competitors in the UK are local chains Costa and Caffe Nero, both domestic companies). The ensuing negative publicity hurt Starbucks' sales, which fell below ?400 million for the first time since 1998 (Campbell, 2014).
At issue is the fact that the UK signed into membership with the European Union. The EU established rules that allowed companies to headquarter in one European country and operate subsidiaries in another…… [Read More]
Globalization and Taxes
Competition for Taxes
One of the most difficult issues regarding the state regulation of their tax relations in regard to international business is the presence of various "tax havens" that are present across the globe in today's modern economy. According to some estimates, as much as half of the world's stock of money either resides in tax havens or passes through them (Palan, 2002). The term tax haven has been widely used since the 1950s; yet there is no consensus as to what it means (Palan, Murphy, & Chavagneux, 2010). The influential U.S. Treasury's Gordon eport concluded: there is no single, clear, objective test which permits the identification of a country as a tax haven . Corporations and private businesses now have a plethora of ways to reduce their tax liabilities. Globalization has exacerbated this problem even further. The mere presence of these various tax shelters…… [Read More]
In Pennsylvania taxation is a huge issue, much like in the rest of the United States. arring factions on either side of the political agenda work to either raise or cut taxes within a given year. In times of economic crisis, such as is occurring in the United States at the present has forced citizens and government officials to reexamine taxation practices in the hopes of overturning the depression. In additional to federal taxes, businesses and individuals of the U.S. are required to pay taxes to the state and to their local communities (Financing page 458). State taxation can be extraordinarily high. It has been proven that many states have higher corporate tax rates than several countries of the world. hen comparing Pennsylvania to other states in the country, it becomes apparent that the current tax rate is exorbitant and putting a great deal of pressure both on…… [Read More]
The basic methodology of the research was a careful synthesis of existing theories and observations as a means of constructing an internally valid and consistent logical argument in favor of corporate taxation.
Again, because this is not a true research article there are not exactly results or findings in the traditional sense of an experimental or observational piece of research. The analysis that the author provides constitutes the results or findings of this research; the reasons behind the need to tax corporations, which range from complex numerical issues to ethical and image/perception-based imperatives, are the "discoveries" made here. The author also explores the reasons that corporate taxation is frowned upon by some, explaining why this reasoning is flawed.
The author concludes by calling for an open-economy structure, explored and described in greater detail in previous sections, that would lead to an optimal corporate tax structure. The elements…… [Read More]
Pennsylvania's Unique Tax Environment
When someone says the word tax or any related form of the word, it makes people cringe. This cringe is for a good purpose. Almost everything we purchase is taxed somehow. Most of those people do not even understand all of the specific taxes that are being taken out of their checks. When comparing between different states, Pennsylvania has some unique features to its taxation system. To begin, it has a personal income tax, adopted in 1971, which is levied at a rate of 2.8%. Business taxes include a corporate net income tax of 9.99%, capital stock and franchise taxes, and taxes on public utilities, insurance premiums, and financial institutions (Braybrooks, et al., 2011). Pennsylvania's 6% sales and use tax exempts essential items like clothing, groceries, and medicines. Local sales taxes are limited to 1%. The state has an inheritance tax and has taken action to…… [Read More]
Federal Tax Current Event
The current epublican leadership race has seen Herman Cain as a front-runner for leadership of the epublican Party and thus, a potential presidential candidate for the 2012 election. One of the main components of his campaign is his proposal of a flat taxation plan for citizens of the United States, known as the "9-9-9" tax plan. This plan proposes to replace the current federal tax code with a flat taxation plan of 9% national sales tax, 9% personal income tax, and 9% corporate tax across the board for all Americans. In the article "Herman Cain's murky 9-9-9 tax plan," the author argues that this plan simply would not fiscally work out and that it would lead to an unfair distribution of the tax burden (Hitzlik, 2011).
Hitzlik argues that flat taxation plans such as the one proposed by Cain tend to not result with their positive…… [Read More]
Trump's Tax Plan
Donald Trump's stance on trade -- namely, that cutting corporate taxes will incentivize companies to stay in the U.S. (as will a tariff on the imported goods of offshoring companies) -- is one that is denounced by his opponent Hillary Clinton. Clinton argues that the tax break proposed by Trump will only benefit the 1% and that his plan to place a tariff on companies that export labor only to turn around and import their products would lead to massive job loss. Trump's rationale is that by cutting the corporate tax rate, which is among the highest in the world, it would allow companies to keep labor in the U.S. as they will not have to chase margins by employing cheaper labor in foreign countries. This would be the positive incentive. Adding the tax on U.S. companies that manufacture abroad and sell in the U.S. would serve…… [Read More]
Corporate Governance on Organizational Performance
Corporate governance implies to decisions made by the management in organizations, which influence the overall performance of the firm. Corporate governance focuses on organization's governance and the performance of duties within firms. Management of firms develops specific strategies or set of mechanisms that influence their decision-making. These decisions are crucial in firms where there is a clear difference in ownership and control. Some of the strategies the management team might use are employing the participation of the board of directors in decision-making, encouraging shareholders in the management of organizations or decisions made on market operations (Aguilera, Filatotchev, Gospel & Jackson, 2008). Decisions instituted by members of these teams directly influence the performance of the firm. Moreover, decisions tasks undertaken by the management and the shareholders contradict, but are very crucial to the overall performance of the organization.
Corporate governance is a highly powerful aspect to…… [Read More]
This is designed to help support individuals who are dealing with financial challenges. The problem is that select amounts of recipients will use as a way to live off of the government. (Wolf, 2005)
How might a socialist and a capitalist government differ in its treatment of the problem of unemployment?
Socialists want to see massive amounts of government spending to create new jobs, training programs and provide unemployment benefits. A capitalist is opposed to these kinds of programs and believes that charities / private enterprises can address these issues.
In your opinion, should the government have the responsibility of providing health care for every citizen? Why or why not?
Yes, the government should provide health care. The reason why is because prices are increasing exponentially and the number of uninsured is rising. These factors are a sign that there is very little competition inside the sector. To address these…… [Read More]
Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client
Reorganization takes into account any company restructuring that may be tax-free under the United States law section 386. It encompasses the notion of acquiring new entities in a manner that all financial transactions are non-taxable. There are certain general requirements that have to be met in order to qualify. To begin with, it must be a plan of reorganization, must have a sound and fitting business purpose, and must satisfy continuity of interest as well as continuity of business enterprise examinations. There are different forms of reorganization that include type A, B, C, and D. reorganizations (Macabacus, 2017). To begin with, type A reorganization takes into account mergers and consolidations. The advantages of this reorganization type is that it is flexible, funds and other…… [Read More]
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 of project scope (otherwise known as 'project creep'); and radical and unexpected changes in the economic environment. Evaluating risk is a multi-faceted process. It entails an understanding of the physical, functional, and staff required to realize the project; assessing vulnerabilities and possible remedies; risk adjustment; prioritizing on organizational risk hierarchies; making risk comparisons within the organization and globally; and appropriate use of risk matrices.
Article 4: Valuation of stock and stock portfolios
Lerzan, Aksoy, Bruce Cooil, Christopher…… [Read More]
Corporate Social esponsibility
The purpose of this case study is close synopsis of the Enron case and its impact on consumers and corporate business practices alike. Prior to its collapse Enron had been named one of America's top 10 admired corporations, and its boards "was acclaimed one of the U.S.' best five" (eed, 2004). Throughout the 1990s the company experienced tremendous growth and profits exceeding $180 billion, employing more than 30,000 people worldwide (eed, 2004).
Enron collapsed however and went bankrupt, a process that "outraged and impacted stakeholders tremendously and resulted in numerous congressional investigations" (eed, 2004). The "implosion" of the company "wreaked havoc on accounting like no other case in American history; the collapse of the system called into question the adequacy of U.S. disclosure practices and the integrity of independent audit processes" (Thomas, 2002).
Overview of the Case
In October of 2001 Enron executives announced they were taking…… [Read More]
corporate merger between Delta and Northwest airlines in order to find out the possible reasons why it was necessary. We evaluate the merits associated with corporate mergers and the challenges that might be faced in the process. A recommendation on how mergers should be carried out is also provided
Mergers and acquisitions form a very integral part of the contemporary corporate landscape. Kolker (2010) points out that initial six months of the year 2010 witnessed the total value of global acquisitions increase to 2.7% to a monetary value of $915 billion. This was an increase for the initial six months of 2009. 2010 however was off to a rather slow start as compared to 2006 which recorded an excess of $3.8 trillion in transactions related to acquisitions (Yeary, 2007). It is worth noting that it is never the volume of the deals that matter but their size. Averagely, there were…… [Read More]
prediction comparison vote real members House Representatives a law. 1. You choose real members House Representatives, Republican Democrat. (There 435 members House, find interests .
A tax on obesity as seen by Republican member of the U.S. House of Representatives Bill Cassidy and Democratic member of the U.S. House of Representatives James McGovern
Obesity has come to be a significant issue in the United States today, with more and more individuals displaying the malady's symptoms. As a consequence, the authorities have gotten actively involved in trying to control it through installing tougher regulation and by implementing programs meant to educate people with regard to attitudes they should take toward the concept. hile agreeing about the significance of this issue, American politicians seem to have different opinions on the matter -- some believe that the solution stays with tougher legislations while others consider that it all comes down to education and…… [Read More]
Moffett, M.H., Stonehill A.I., & Eitemen, D.K. (2012).
Fundamentals of multinational finance (4th Ed.). Boston, MA: Prentice Hall.
In completing these assignments the university requires that you follow APA guidelines and include (in-text citations) in preparing all works, citations, and references.
Each essay question response should be numbered, answered separately, and be at least 200 words (each question) in length but should be submitted as one file.
Some information has been added to responses. Please ONLY add to these responses and format correctly.
In your own words, contrast international financial management with domestic finance.
International financial management and domestic finance share many commonalities. Each deals with interest rates and making the best financial use of assets. However, in international financial management the primary difference is that there is also interest rate risk and risks associated with exchanges. When currencies float, the rate can be subject to volatile movements. For example,…… [Read More]
Flow Entity Partnerships
For flow-through entities such as partnerships, how do the tax laws use partners' basis adjustments to prevent double taxation of partner income?
According to ands (1996), there are several different avenues which are used to prevent double taxation for partnerships. The most notable include: S corporations, LLCs and limited partnerships. These areas enable for the flow through income depending upon the type and structure that is utilized (ands, 1996).
An S corporation has the same benefits as a traditional corporation. This means that it is considered to be a separate legal entity under the law. However, what makes it different is the income that is received is passed through to each of the partners. They will report this as ordinary income on their individual tax returns. The company does not pay anything on the amount that it passes through to each partner. Under the law, this is…… [Read More]
Australian Corporate Directors
The four step process of understanding business law is very helpful in arriving at some important conclusions about the case of Coco Ltd. And its recent accident. The four step process suggests provides a manner in which this problem can be properly understood and the correct actions may be implemented to prevent further problems. This part of the essay will advise the directors of Coco Ltd. Of their current problems.
Identify the Legal Issue
Before delving into the legal issues of this case it is important to understand the behaviour of Mr. Hugo, a director here at Coco Ltd.. Hugo, in a recent purchase from his in laws' Brett and Sandra cocoa plantation a disastrous terrorist event took place. During the transportation of nearly boat load of cocoa, the ship was attacked and sunk by terrorist pirates disguised as American Navy Forces. The ship was sunk with…… [Read More]
ole modern accountant Corporate & Global Business the paper Double Spaced Times New oman Font Size
In many ways, the role of the modern accountant in corporate and global business has substantially changed from that in previous times. The effects of globalization are ever increasing; thus, it is necessary for accountants to be cognizant of global developments more than ever. Additionally, the financial crisis of 2008 has resulted in significant regulations that have changed the way that accounting is practiced to include a greater degree of transparency for all parties involved: company representatives, stockholders, and regulators. Due to these developments, one can argue that the role of the accountant has never been more important than it is in contemporary society, especially when one considers that in addition to newer developments accountants are also charged with the primary responsibilities that they have always had.
From an extremely pragmatic standpoint, accountants are…… [Read More]
global tax treaties, UN model and OECD model with the view of analyzing their consideration towards rights to capital and tax income. By throwing light on differences and similarities among the models, the fundamental logic of each of them is explained. The article explains the prospecting policies of consideration when tax treaties are to be signed. It is because there is strong need to enforce a flexible but more aggressive strategy. The Section 1 of the article discusses rights about tax earnings through immovable property. The Section 2 is about business profits. The Section 3 throws light upon income from investment channels like royalties, interests and dividends. The Section 4 describes the capital gains. The conclusion of the article is given in Section 5.
ight to tax income from immovable property
Because of well-known significant relationship between the country of source of the income and the source of income itself,…… [Read More]
Income Tax Deduction
Taxes have existed in the United States for all of its existence but they took on many forms prior to the modern income tax. The income tax was not finalized and permanently ensconced in the United States law until the 1910's. The tax rates, at its normal levels, have been adjusted upwards and downwards depending on the economic cycles with the most recently developments being the "Bush Tax Cuts" of the 2000's and the recent tax spikes under the Obama Administration. While income taxes affect some more than others, nearly all people are affected based on the assets/income they possess and earn as well as the familial structure they maintain.
Common Tax Deductions
As noted in the introduction, familial status and assets/income are far and away the biggest determinants on how much tax is paid, if any. Indeed, some people actually get money from the government and…… [Read More]
The same goes for business-related periodicals and magazines. (Dratch 2008, p. 2)
Mileage: Once again, this involves careful bookkeeping, but the deductions can add up. Keep a dated log of all business-related mileage, tolls, and parking costs. According to the IRS website, the 2009 IRS deduction rate for business-related mileage was 55 cents per mile.
Travel, Entertainment, and Meals: For the small business, 100% of travel and entertainment expenses are deductible, as well as 50% of meal expenses. It should come as no surprise that these deductions must have supporting documentation showing them to be business-related.
Shelter Your Income
Investment property can be a valuable tax shelter. The IRS allows you to shelter up to $25,000 in an investment property, but there are strict requirements. You must own 10% of the property as an individual owner, not through limited partnership. And you must be involved in the "active management" of…… [Read More]
egardless of the actual operation being run at a time or the other, iordan Manufacturing respects the regulations instated for all types of activities. We respect the right of our staff members; we respect the rights of the communities in which we operate and we function in full accordance with the national and international stipulations.
We condemn any type of sexual or otherwise discrimination or any type of illegal treatment of the staff members. We have instated internal rules of conduct which clearly state that all our employees are required to obey the legal provisions enforced in their professional operations.
Our governance is based on principles of legal doings, ethics and morality, as well as equal opportunities. In this line of thoughts, we strive to operate in a means that creates more value to our various categories of stakeholders. The principles by which we guide our operations are…… [Read More]
Capital gains and dividend taxes were both initiated in the early 1970's, by the Democratic Party. efore dividend taxes were enforced, the government made its money through higher aftertax yields, The dividend tax was originally supposed to be a progressive measure, so that the wealthiest paid correspondingly more than the poorest because they had benefited more. At this time, only the wealthy invested in stocks. This is no longer true. Most middle-class people today are investors in the market and they do not have the expensive accountants hired by the rich to shield their investments from tax.
Investing in the stock market has become far more widespread over the last two decades, as 84 million people - representing nearly half of all American households - owning stock. Tax-deferred investment tools such as 401(k) plans and individual retirement accounts (IRAs) have placed millions of Americans who make $60,000 or…… [Read More]