sounds like corp industry thinks Kerry idea very bad for them.. this will not get off the ground in congress must be great for pr in election to the public.
I think it shows how kerry or who ever suggested this to him doesn't understand why these credits have built up overseas.. The corp as they grow over there and make more profits will use the credits to offset much higher taxes overseas than in the U.S. they do not want to return the credits to the States. could it be these credits built up because countries gave the corp ten or twenty years of free taxes to build over there. I remember Ireland used to give tech companies years ago ten years of free taxes just to set up a company.
`Double Taxation'
Kerry's plan would subject U.S. companies to taxes both by foreign governments and by the U.S., said Kimberly Pinter, director of corporate finance and tax for the National Association of Manufacturers, a Washington lobby group for companies such as General Motors Corp., based in Detroit, and Exxon Mobil Corp., based in Irving, Texas.
``Eliminating deferral is one of the worst possible things you can do for the competitiveness of U.S. companies,'' Pinter said. ``This is double taxation in real time.''
Kerry's plan would allow companies that sell a product or service in the same country -- for example, a car built in India to be sold in India -- to continue avoiding double taxation using tax deferral. A U.S. company that simply moves its call center to India would face double taxes.
R. Glenn Hubbard, who was Bush's first chairman of economic advisers, said Kerry's plan would stop U.S. multinationals from hiring Americans.
Overseas Markets
``Kerry is essentially posing a Berlin Wall for investment at a time when our business future lies in capturing gains in overseas markets,'' said Hubbard, who is now a professor of economics and finance at Columbia University.
Paul Zurawski, director of tax policy at Honeywell International Inc., the world's biggest maker of airplane electronics, said his company primarily operates in foreign countries with high taxes such as Germany, which is one reason the company hasn't returned many of its foreign profits to the U.S. in a long time.
The Minneapolis-based company had $3.3 billion in foreign earnings that had never been taxed by the U.S. in 2003, including $2.6 billion in cash that would be eligible for Kerry's proposed tax holiday.
``Our cash due to operations is in relatively high tax jurisdictions,'' Zurawski said. U.S. law provides a ``disincentive'' to import the money, he said. |
