All -
The tax cuts passed by Congress this week increase taxes on Americans working overseas.
Recently, on this thread, Thomas Watson said that if I, as an American citizen, earned money overseas, the U.S. government had no legal or moral right to tax that income. Apparently, the Republicans in the House and Senate disagree. Actually, up until now only the first $80,000 of foreign income was exempted from Federal Taxes, but the new tax bill eliminates that exemption.
Interestingly, Corporations are treated quite differently under current law.
For example, Tyco, with offices and/or factories in New Hampshire, New Jersey, Pennsylvania and Florida (among other places) filed papers in Bermuda a few years ago and now they claim to be a Bermuda Corporation. This is legal under the current tax code.
Do they make products in Bermda? No. Do they have board meetings there? No. Are any of the executive staff stationed there? No. The purpose of the Bermuda office is only to allow Tyco to claim to be a foreign corporation.
This neat little legal fiction allows them to manufacture products in the United States, sell them overseas, and pay no U.S. taxes on the revenue from those foreign sales.
Some time ago, Thomas Watson claimed in this forum that revenue from products manufactured in the U.S. and sold abroad would be taxed. That is not the case, according to my business accountant.
In my opinion, it is absolutely disgraceful that corporations are given rights transcending those of individual citizens. I urge everyone reading this thread to contact your representatives in Congress and tell them to pass the Patriot Enforcement Act, which will prevent American companies from claiming to be foreign corporations for the purpose of evading taxes.
- Allen |
