Re:To Understand the Benefits of Tax Reform, Start by Unders...
by redbeard0x0a on Thursday November 09, 2017 @11:39AM
(#15663800)
> My first problem is this: why exactly can't we treat companies the same way?
Under current tax law, US corporations pay taxes on any income generated in another country. There is of course a loophole with regards to re-investing profits, but in general, companies have a tax liability on any profit they make anywhere in the world.
In the article it talks about 3 different classifications of foreign income. Interest/Passive Income (has to have tax paid on it), non-reinvested income and re-invested (or promised to be) income. The 3rd category is the biggest loop hole, but the first 2 make a company pay taxes on that income to the US Treasury (after foreign tax credits). The third category basically is where all the deferred money sits - as long as the company promises it will be using that profit to invest in foreign parts of the company.
Under current tax law, US corporations pay taxes on any income generated in another country. There is of course a loophole with regards to re-investing profits, but in general, companies have a tax liability on any profit they make anywhere in the world.
In the article it talks about 3 different classifications of foreign income. Interest/Passive Income (has to have tax paid on it), non-reinvested income and re-invested (or promised to be) income. The 3rd category is the biggest loop hole, but the first 2 make a company pay taxes on that income to the US Treasury (after foreign tax credits). The third category basically is where all the deferred money sits - as long as the company promises it will be using that profit to invest in foreign parts of the company.