Those opposed to the carrier jobs - what's your take on repatriating the trillions in corporate overseas earnings?

That money is not Trump's money. Meaning products were made overseas and sold overseas. So profits stay overseas. The US has no say over such monies.

The loophole here is that companies come completely skirt the U.S. tax system. In other words, they can sell products in the U.S. and via transfer pricing they can account for the sales overseas. Then they can bring the money back at a 10% tax rate.

I am a fan of repatriation but at the moment even 10% is far too high. Why would Apple pay 10% when they could very easily issue bonds for 3% or issue debt at a cost less than 10%. But if you bring that repatriation tax down to 5% then you start having more problems that I outlined in the first paragraph. I don't know the best solution but I think what we have right now works fine.

Not His Money wrote:

That money is not Trump's money. Meaning products were made overseas and sold overseas. So profits stay overseas. The US has no say over such monies.

The first part is true, but Trump can have his say and make his pitch to convince corporations to bring their earnings back home to America. If successful, surely it would help our economy.

sbeefyk1 wrote:

The loophole here is that companies come completely skirt the U.S. tax system. In other words, they can sell products in the U.S. and via transfer pricing they can account for the sales overseas. Then they can bring the money back at a 10% tax rate.

I am a fan of repatriation but at the moment even 10% is far too high. Why would Apple pay 10% when they could very easily issue bonds for 3% or issue debt at a cost less than 10%. But if you bring that repatriation tax down to 5% then you start having more problems that I outlined in the first paragraph. I don't know the best solution but I think what we have right now works fine.

Don't think it'll be a long term change to the tax laws, but rather a one time incentive. Agree that the earnings would need to be reviewed and approved "as legitimate overseas stockpiles of cash" to qualify for repatriation.

Wrong. The money is already in U.S. banks, bonds and other investments- it's only offshore on paper, to avoid paying US taxes. They are limited in what they can do with it in the U.S. - they can't reinvest it in their own company or pay dividends, for example.

Does Trump actually think it's sitting in foreign banks? I thought he was supposed to be some tax avoidance genius.

Here are some links to learn a little more in the topic...

http://www.cnbc.com/2016/08/14/tim-cook-addresses-apples-us-taxes-says-no-repatriation-without-fair-rate.html

http://www.cnbc.com/2016/09/20/us-companies-are-hoarding-2-and-a-half-trillion-dollars-in-cash-overseas.html

http://www.wsj.com/articles/2-5-trillion-foreign-profit-stash-could-be-another-boon-for-u-s-dollar-1480096695

I'm surprised that there aren't more people railing against Trump's proposal. Usually the idea of giving tax breaks to corporations is so unappealing that it's immediately rejected regardless of how much hope out may do

My 401k voted for trump wrote:

I'm surprised that there aren't more people railing against Trump's proposal. Usually the idea of giving tax breaks to corporations is so unappealing that it's immediately rejected regardless of how much hope out may do

It's not surprising at all. Those on the right--especially Trump supporters--are so brainwashed and/or lack the mental faculties that they can't or choose not to see what a bad precident Trump's Carrier deal sets going forward. Those on the left recognize it's bad optics to be too vocal in criticizing a deal that is being touted as saving "Amercian jobs". It's a brilliant political / PR move on Trump's part, it's just too bad it's horrible policy for the US government and totally unsustainable. But, hey, at least Trump will be held accountable...

Anyone that thinks a "one time 10% tax" is a real thing needs to recheck their brain. If companies know they can just cheat the tax code like that they'll just keep their money offshore until the next "one time tax".

Either reduce the tax permanently and encourage more foreign investment and a level playing field for all businesses, not just the mega corporations that do this, OR keep the status quo.

The status quo is: make products in foreign counties, sell those products in foreign countries, pay appropriate taxes in those countries.

The Trump misunderstanding is: where is the US tax cut? It is already there. Any part of the effort used to design products, or make parts of products in the US, are already subject to US taxes.

Status Quo wrote:

The status quo is: make products in foreign counties, sell those products in foreign countries, pay appropriate taxes in those countries.

The Trump misunderstanding is: where is the US tax cut? It is already there. Any part of the effort used to design products, or make parts of products in the US, are already subject to US taxes.

Are you opposed to trying to get another 10% in taxes and having companies put their trillions into us investments? Corporations seem to be on board with the initiative.

It's pretty simple really... wrote:

My 401k voted for trump wrote:

I'm surprised that there aren't more people railing against Trump's proposal. Usually the idea of giving tax breaks to corporations is so unappealing that it's immediately rejected regardless of how much hope out may do

It's not surprising at all. Those on the right--especially Trump supporters--are so brainwashed and/or lack the mental faculties that they can't or choose not to see what a bad precident Trump's Carrier deal sets going forward. Those on the left recognize it's bad optics to be too vocal in criticizing a deal that is being touted as saving "Amercian jobs". It's a brilliant political / PR move on Trump's part, it's just too bad it's horrible policy for the US government and totally unsustainable. But, hey, at least Trump will be held accountable...

I understand that you believe that Indiana would be better offer without the carrier jobs, but that's a different topic. This topic is on whether corporate earnings should sit in Chinese or US banks. If the latter, do you support Trump's initiative?

My 401k voted for trump wrote:

The first part is true, but Trump can have his say and make his pitch to convince corporations to bring their earnings back home to America. If successful, surely it would help our economy.

Historically, the funds are taken as dividends going to people that don't spend the money.

If you made some sort of complex scheme where you encourage the companies to spend it on R&D, the broader economic effects are still mostly non-existent.

Defeating the American tax net is relatively easy. Goods are made in some other country, then "sold" internally at very high transfer costs. The American company essentially operates at a loss and keeps wages suppressed because "There is no money for raises."

A VAT scheme can address this, but too many Congress people are too well supported to do this. Plus, Republican voters have been trained to punish themselves. So, the only answer is to start a company that does the same thing.

It's all of those liberal tech companies who are hording cash overseas. Pretty sure Trump has no sympathy for them.

My 401k voted for trump wrote:

Status Quo wrote:

The status quo is: make products in foreign counties, sell those products in foreign countries, pay appropriate taxes in those countries.

The Trump misunderstanding is: where is the US tax cut? It is already there. Any part of the effort used to design products, or make parts of products in the US, are already subject to US taxes.

Are you opposed to trying to get another 10% in taxes and having companies put their trillions into us investments? Corporations seem to be on board with the initiative.

What? Why should a company "bring" money back to the US, pay tax to the US, then send the money back out of the country to continue doing international business? Doing that would be really stupid.

How about a little reality check before celebrating 1,000 jobs saved by giving tax breaks to Carrier.

During Obama's 8 years 9,965,000 jobs have been created.

Let's round Obama's time in office to 8 years which is 2,920 days.

9,965,000/2920 = 3,412 new jobs per day during Obama's time in office.

Make America Nice Again wrote:

How about a little reality check before celebrating 1,000 jobs saved by giving tax breaks to Carrier.

During Obama's 8 years 9,965,000 jobs have been created.

Let's round Obama's time in office to 8 years which is 2,920 days.

9,965,000/2920 = 3,412 new jobs per day during Obama's time in office.

Trump card wrote:

It's all of those liberal tech companies who are hording cash overseas. Pretty sure Trump has no sympathy for them.

You clearly don't know how that would harm his most valued constituent, himself. So, nothing will be done to harm himself.

Harming the people that voted for him is no problem. They are already used to it.

Cisco's CEO weighed in with his thoughts on repatriating his companies earnings. I have yet to be convinced that this wouldn't help our economy...

Bringing Cisco's cash back to the US would cause a rush of dividends, buybacks and M&A, CEO says

http://www.cnbc.com/id/104151809

http://www.cnbc.com/id/104151809