l****z
发帖数: 29846 | 1 by [email protected]
/* */ (Mike Mish Shedlock)
Is there a point to beating your head against a concrete wall? The answer
would seem to be "no", yet President Obama continues to do just that with
dead-on-arrival proposals.
Please consider Barack Obama Plans to Tax Overseas Cash Piles.
President Barack Obama will propose raising $238bn by levying a one-off
tax on the cash piles held by US companies overseas to repair the US’s
crumbling roads and bridges.
The measure, a key plank of the US president’s budget to be outlined on
Monday, would impose a 14 per cent “transition” tax on the estimated $2tn
in earnings US companies have amassed overseas, the White House said on
Sunday.
Critics say the existing offshore cash mountains testify to the
aggressive foreign tax planning by US companies, while businesses cite them
as evidence of the handicaps they face under an uncompetitive US tax regime.
Mr Obama will also propose a 19 per cent tax on future foreign earnings,
giving companies a credit on foreign taxes and allowing them to be
reinvested in the US with no additional penalty. Under the current system,
US companies pay little or no tax on their earnings abroad until they are
brought back into the US.
The money raised would be used to fund about half of an ambitious six-
year programme of highway, bridge and transit upgrades, one of the president
’s main priorities during his final two years in office and an initiative
that has attracted some degree of bipartisan support. The remainder of the
programme would be financed by the existing highway fund.
“This transition tax would mean that companies have to pay US tax right
now on the $2tn they already have overseas, rather than being able to delay
paying any US tax indefinitely,” a White House official said.
Wall of Dispute
Critics say the existing offshore cash mountains testify to the
aggressive foreign tax planning by US companies.
While businesses cite them as evidence of the handicaps they face under
an uncompetitive US tax regime.
Curiously, both statements are true. But the president's plan does nothing
to fix the fundamental problem.
US tax code encourages capital flight. So corporations do just that,
effectively wasting a mountian of money on lawyers and tax schemes to avoid
paying tax. Then the money sits abroad, waiting for the repatriation
holidays which inevitably come.
Mish Proposal
The initial problem is US corporate tax rates are too high. I propose
cutting them to zero. Were that to happen, instead of US businesses
sheltering money money overseas, foreign corporations would setup offices in
the US, moving as much as they can here.
I believe growth in economic activity would far outweigh any lost revenue.
Since that idea would never fly, how about a more modest corporate flat-tax
with no loopholes, at a rate far lower than most of Europe?
Such a proposal would immediately end all this bickering on both sides.
Republicans would get what they want (lower taxes). And Obama would get
something he wants (ending foreign tax loopholes).
Instead, he proposes dead-on-arrival ideas.
Does Obama love beating his head against the wall with zero-chance proposals
? If he's attempting to pound some sense into his head, it's clearly not
working. |
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