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Politics : Formerly About Advanced Micro Devices

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To: Road Walker who wrote (372916)	3/6/2008 5:41:30 PM
From: TimF	Read Replies (1) of 1573053

Why the disparity given the high federal RATE, which rises to 39% counting state taxes? Part of the answer is that big U.S. companies have become expert1 at hiding profits in TAX havens overseas. Or in other words they are generating profits overseas partially because of the high tax rates here. In addition to that its not just the amount paid as a percentage of GDP or a percentage of corporate profit thats a consideration. A higher marginal rate is more harmful than a lower marginal rate even if the total percentage of taxes paid is the same, because the higher marginal rates encourage more efforts to seek loopholes and avoid taxes. Seeking a loophole and finding it doesn't only reduce the amount the government gets, it often means a less profitable or more risky investment is made because of the better tax treatment of the investment. still enjoys protection in the form of various TAX breaks that depress the effective RATE to 27% Which is higher than the rate of many of our trading partners. Drop the CORPORATE income TAX RATE to, say, the Swedish socialist level of 28% to reduce the attraction of TAX havens, while eliminating the broad exemptions and industry-specific perks that have turned our TAX code into Swiss cheese feeding a regiment of millionaire TAX lawyers. In general I agree (although lower than 28% would be good. The EU average is a bit below that and the trends has been down not up. Also some people view companies paying the lower tax rates abroad is one of those "broad exemptions", and see it as a loophole to be closed (see the posts about Obama's idea of "Patriot Corporations" linked to below). I strongly disagree. And penalizing American corporations for trading and investing abroad will only cause us to lose sales in other countries to foreign competitors. coyoteblog.com clivecrook.theatlantic.com even from an Obama supporter How can I say I love you if you won't shut up? meganmcardle.theatlantic.com

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