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Biotech / Medical : Ligand (LGND) Breakout!
LGND 199.20+0.1%Nov 21 9:30 AM EST
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To: Arthur Radley who wrote (27113)1/2/1999 12:08:00 PM
From: aknahow  Read Replies (1) of 32384
 
Barrons has just run an editorial call for the end to the corporate income tax. I se no chance of that. The article states that the tax results in 46% of the profits of a corporation going to federal and state governments. I do not know if this information is correct. Every state also has a different rate, but would not expect California to be the lowest. <g> I also do not know if state taxes in any way impact foreign earnings when remitted to the U.S.

The Tyco article did provide both pre and post tax margin information, under a stock price graph. But on further checking I believe their change in domicile was made in late 97 or early 98, from S.E.C. reports, I looked at. 97 post tax margins went up 21% while pre tax margins declined by the same amount, 21%. In 98 for three quarters pretax margins rose 100% over 97 while post tax margins rose by 23%.

With this limited information, it is difficult to get an exact picture of the benefits especially when one considers that only about 35% of Tycos sales are outside the U.S. In addition any pre tax margin change impacts on post tax. It would be nice if any company changing domicile kept track of the tax savings. This information might help dispel the notion that domicile changes were evil and it would also show shareholders the benefit of this specific management decision, improving investor confidence in management.
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