US companies’ overseas cash hits $947bn
Tags: Corporatism, Misc., privitization, the wealthy, Wealth
Posted 03 Apr 2014 by theaveeditor
in Misc.
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This is money earned by U.S. companies in other countries. It shouldn’t be double taxed, but it should be taxed. For example, if Apple earns $1 billion of profit in Italy, and pays $250 million of taxes to Italy at a tax rate of 25%, and Apple’s U.S. tax rate is 35%, Apple should pay U.S. taxes of $100 million on that profit. If Apple funnels that $1 billion of profit to Ireland, and pays no Irish taxes, then Apple should pay U.S. taxes of $350 million on that profit.
By that logic, a company that was based in the US, dependent on US resources, but ONLY selling stuff to China, would pay NO US taxes.
It would depend on what China’s tax rate is. If it’s less than ours, that company would pay U.S. taxes. The system I’ve described is how states manage their different sales tax rates; for example, if you buy a car in Oregon, which has no sales tax, and bring it into Washington you’ll owe Washington a use tax at the WA sales tax rate. But if you buy the car in a state with a lower sales tax, the WA use tax is only the difference. Same for stock dividends paid to U.S. shareholders by foreign companies; if there was foreign tax withholding on your stock dividends, you can get a 100% tax credit against the U.S. income tax on those dividends.
I understand but that does not answer my question. Imagine if I built the world’s greatest studin for making animated movies but decided to only sell them n China? I would make the movies in my Bellevue basement using software and computers. I would even employ a few dozen folks to do scripts anf graphics.
So, suppose this company sells 20 billion dollars worth of movies n China, all profit? Suppose this American company pays yaxes at whatever rate China wants and does not repatriate the money.
Guess what NO taxes.
that is why US corporate tax should be a flat 10%. The companies would keep more jobs here. On money made overseas and taxed, 2% to bring it home. Long term, we would collect more tax.
It is not exactly that easy. Where money is may not be where money is invested/ Some countries function as tax havens, charging very little or no taxes but make their profit off of their banks., Why bring it home if it will never be taxed overseas?