Clown in Chief wants to go after not only income legitimately taxable relative to US markets, but also US companies’ income from non-US markets if those US companies have organized themselves such that they legitimately, under the rules in place, owe lower taxes to non-US countries. Non-US markets. Beyond clueless, he’s shameless. No matter where the money is, whose it is, and how it was arrived at, it’s his. It’s all about other people’s money. Quite telling how he can only make money through sweetheart book deals and politics. Helluva an executive you are Barry, while you run the country into the ground in a fashion to rival GM management and the UAW.

churchill995 on May 4, 2009 at 10:54 PM

Here’s the deal. US based companies are generally not taxable in the US on what their non-US subsidiaries earn in their respective non-US markets, until those non-US subsidiaries pay a dividend up to the US parent company. When that happens, generally the US parent company will pay US income taxes on the dividend amount plus related foreign income taxes paid on that income, but will get a US tax credit for the foreign income taxes paid up to a limit of the US tax rate, with the hoped for result that the net tax on the non-US earnings isn’t higher than what the US rate of 35% would be. Sounds simple, eh? It isn’t in practice. Often there is leakage such that it is not a wash, and that leakage would grow substantially under Barry’s design. Some US companies are able to plan to lower the foreign taxes on their non-US earnings, but instead of leaving that to other countries to chase, Barry wants to grab that too, indirectly. Moreover, other countries don’t generally tax foreign earnings of their resident companies. One analogy I have seen is that this would be akin to tacking on extra seconds to the time of an American Olympic runner, such that he loses to foreign country competitors as opposed to winning the gold medal. Net, US companies will have significantly lower after tax earnings, with less amounts for those US companies to invest and hire people in the US to compete globally. With the world’s highest or 2nd highest corporate tax rate already, Barry’s idea is really dumb, particularly in a recession. But of course he knows better, given his worldly experience and perspective.

churchill995 on May 5, 2009 at 12:19 AM