8/31/2014

The problem with US corporate income taxes isn't just that we have the highest rates in the world, but that we make American companies pay that high rate on money that they earn in other countries

From Megan McArdle at Bloomberg View:
If you're writing about inversions, and you don't prominently mention global taxation in the first few paragraphs, then your article is not serious and anyone with even a smidgen of actual interest in the issue should stop reading. . . . 
The purpose of an inversion has never been, and never could be, and never will be, "ooh, Canada has a 15 percent tax rate, and the U.S. has a 35 percent tax rate, so we can save 20 points of taxes on all our income by moving." Instead the main purpose is always: "If we're incorporated in the U.S., we'll pay 35 percent taxes on our income in the U.S. and Canada and Mexico and Ireland and Bermuda and the Cayman Islands, but if we're incorporated in Canada, we'll pay 35 percent on our income in the U.S. but 15 percent in Canada and 30 percent in Mexico and 12.5 percent in Ireland and zero percent in Bermuda and zero percent in the Cayman Islands." . . .

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