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- Jan 13, 2010
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The laws are backwards. We tax the money they spend here and gift them the money the don't spend here. Seems ridiculous.
How about no tax for what they make here and tax the overseas income? Wouldn't that make more sense?
yes, if you wanted zero US-residernt multinational companies. But that would be economic suicide.
What folks here do not seem to get is that the US operates in a competitive global marketplace for residency services. Yes, you are essentially selling value to multinational corporations. We see this most clearly with the tax incentives and inducements offered to various corproations to settle in one local area vs another, but it applies on a global level as well. Countries like Ireland get this most clearly, but so do we in Canada where reduced corproate taxes are well understood to help draw foreign investment and additional work opportunities. You guys in the US, with your ridiculous corproate tax rates plus this confiscatory tax imposed on Canadian and french and Chinese etc earnings of US corporations, where the same corporations would not have to pay taxes to the US govenrment if they had tax residency in, say, the Cayman Islands, is a huge disincentive for US businesses to invest abroad (since $1 in earnings after foreign taxes translates into less than $1 in distributable income) and for non-US businesses to move their headquarters to the US.
And sure, you have a lot going for you which has allowed you to do well regardless. But (1) you would have done even better if you had implemented well designed policy to attract and retain businesses and (2) you can't rely on history forever. Other countries are continuing to increase their competitiveness, and you can't just sit back and rely on your laurels to convince companies to reside in the US instead of Canada or Singapore.