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Old 10-04-2012, 17:28   #1
Gunnut 45/454
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What IRS tax code or Federal law give Companies a tax break to out source

Jobs?

The question came up in the debate! It isn't a law as Mitt said it a part of the Fed Tax code!

APB 23 permits U.S. multinationals to defer recognition of tax liability on foreign earnings for financial reporting purposes so that earnings are not reduced by the tax liability if they affirmatively assert that their foreign earnings are permanently or indefinitely reinvested. In 2011, more than 1,000 U.S. multinationals made such an assertion in their SEC filings, reporting in total that more than $1.5 trillion is or is intended to be reinvested offshore.

A perfectly legal thing to do as anyone would avoid at all costs paying anymore taxes then they need to and or are required by law to do! So again the Socialist in cheif doesn't understand companies as well as everyday Americains have a duty to share holders and themselves not to pay any more taxes then legal obligated too! So Mr. Socialist in cheif if you don't like the tax code change it!!! Oh wait that would require you to actually do some work wouldn't it! Scratch that!
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Old 10-05-2012, 06:11   #2
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I would just like to point out that "deferring" recognition doesn't mean you don't pay tax. It just means you defer the tax until a later time. An "exclusion" means you don't pay any tax at all.

The reason they have this deferral is because you are reinvesting the money. The idea is that if your investments keep making money and you keep reinvesting it then you're still gonna have to pay the taxes one day. The tax attorneys refer to this as the 'day of reckoning.' The way it works is that any income you would have to pay taxes on is reinvested, so your cost basis in the investment stays the same. However, the value more than likely keeps going up. So one day when you finally do sell it you're gonna have to pay a ton of taxes.

It looks like this - You buy 10k worth of stocks. If you invest foreign income back into something you get it tax free. So, after a long time of doing this let's say the asset is now worth 100k. Well, when you sell it you're gonna have an amount realized of $100,000, with a cost basis of 10k. Therefore, you're gonna have to pay taxes on 90k worth of money. If you had not reinvested tax-free (deferred) the recognition of gain...you would still pay taxes on 90k, but you would have just paid the taxes on the income as it became due every year, rather than waiting for a lump sum tax.

The only way that this provision could possibly make someone get a huge windfall would be if they kept reinvesting for so long that the capital gains tax rate was lowered by Congress. In that case, then the deferral of gain would be a good thing because they would pay less than the current 15% capital gains rate on their taxes.

However, conversely, if the tax rates were to go up, then it would be bad to defer your gains. In this scenario you might defer your gains for 10 years, but when you go to sell it Congress has upped the Long term capital gains tax rate to 30%. Well, now you're gonna pay 30% on 90k all at once rather than paying 15% every year.

I would like to hear the candidates give some more substantive proposals when it comes to taxes and revisions to the IRC.
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Old 10-05-2012, 07:02   #3
kwijybo
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Quote:
Originally Posted by Gunnut 45/454 View Post
Jobs?

The question came up in the debate! It isn't a law as Mitt said it a part of the Fed Tax code!

APB 23 permits U.S. multinationals to defer recognition of tax liability on foreign earnings for financial reporting purposes so that earnings are not reduced by the tax liability if they affirmatively assert that their foreign earnings are permanently or indefinitely reinvested. In 2011, more than 1,000 U.S. multinationals made such an assertion in their SEC filings, reporting in total that more than $1.5 trillion is or is intended to be reinvested offshore.

A perfectly legal thing to do as anyone would avoid at all costs paying anymore taxes then they need to and or are required by law to do! So again the Socialist in cheif doesn't understand companies as well as everyday Americains have a duty to share holders and themselves not to pay any more taxes then legal obligated too! So Mr. Socialist in cheif if you don't like the tax code change it!!! Oh wait that would require you to actually do some work wouldn't it! Scratch that!
Fox News: "Technically, companies can claim a deduction for the costs associated with moving jobs overseas.

However, the deduction is not a special loophole afforded only to companies moving work out of America, as the president sometimes makes it sound. Rather, the deduction is written into the tax code pertaining to any cost companies face in the course of doing business.

That means a company can claim the deduction whether it's moving operations to Bangalore or Boston, to Kuala Lumpur or Kansas City.

"Any cost of doing business is deductible," said Doug Holtz-Eakin, former director of the Congressional Budget Office who advised Republican Sen. John McCain in the 2008 presidential race. "There's no special (incentive to move jobs overseas)."
"


Read more: http://www.foxnews.com/politics/2012...#ixzz28Qg0C3iD
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Old 10-05-2012, 07:38   #4
Brucev
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If a U.S. corp. makes money, it should be required to pay tax just like mom and pop on their wages, tips, salary, etc. All income should be taxed the same... not relabeled capital gains and then privileged, etc. Regardless of if it is earned overseas or domestically, tax all income from all sources regardless of if the person involved happens to be real people or just a faux-person, i.e., corporate person. At the same time... tax any earnings of any foreign company that operates in the U.S. in exactly the same manner as the nation in which that company is based taxes U.S. companies operating therein. And... use tariffs in such a way that no foreign producer or U.S. company outsourcing/offshoring production can import products/services at a competitive advantage to domestic producers. Why? Simple. There is no free market. There never has been. There never will be. Use tax policy to advantage actual domestic production and investment and to penalize foreign investment/production ala outsourcing/offshoring.
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Old 10-05-2012, 07:43   #5
PaulMason
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Quote:
Originally Posted by Gunnut 45/454 View Post
Jobs?

The question came up in the debate! It isn't a law as Mitt said it a part of the Fed Tax code!

APB 23 permits U.S. multinationals to defer recognition of tax liability on foreign earnings for financial reporting purposes so that earnings are not reduced by the tax liability if they affirmatively assert that their foreign earnings are permanently or indefinitely reinvested. In 2011, more than 1,000 U.S. multinationals made such an assertion in their SEC filings, reporting in total that more than $1.5 trillion is or is intended to be reinvested offshore.

A perfectly legal thing to do as anyone would avoid at all costs paying anymore taxes then they need to and or are required by law to do! So again the Socialist in cheif doesn't understand companies as well as everyday Americains have a duty to share holders and themselves not to pay any more taxes then legal obligated too! So Mr. Socialist in cheif if you don't like the tax code change it!!! Oh wait that would require you to actually do some work wouldn't it! Scratch that!
Obama said that companies get a tax break for offshoring jobs.

They don't.

What you are quoting is the earnings made outside the USA.

So, if a company manufactures a product in the USA and sells it in China, the USA company does not have to pay tax on the profit earned of the product sold in China, if they leave the money outside the USA.

They get taxed when they bring the $ into the USA.
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Old 10-05-2012, 07:51   #6
Ian Moone
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Quote:
Originally Posted by Gunnut 45/454 View Post
Jobs?

The question came up in the debate! It isn't a law as Mitt said it a part of the Fed Tax code!

APB 23 permits U.S. multinationals to defer recognition of tax liability on foreign earnings for financial reporting purposes so that earnings are not reduced by the tax liability if they affirmatively assert that their foreign earnings are permanently or indefinitely reinvested. In 2011, more than 1,000 U.S. multinationals made such an assertion in their SEC filings, reporting in total that more than $1.5 trillion is or is intended to be reinvested offshore.

A perfectly legal thing to do as anyone would avoid at all costs paying anymore taxes then they need to and or are required by law to do! So again the Socialist in cheif doesn't understand companies as well as everyday Americains have a duty to share holders and themselves not to pay any more taxes then legal obligated too! So Mr. Socialist in cheif if you don't like the tax code change it!!! Oh wait that would require you to actually do some work wouldn't it! Scratch that!
Ummm ...a point of clarification ...APB 23 relates to appropriate financial statement disclosure related to tax liabilities. It's a disclosure for shareholders/owners, banks, regulator and others interested in the financial results of a company. It is not used in computing income for tax purposes. It is a disclosure of the results of a tax transaction.
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Old 10-05-2012, 10:57   #7
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This was posted on "Daily Kos"

http://m.dailykos.com/story/2012/10/...-Jobs-Overseas

"Obama wins this round.

Romney’s recently released tax returns made it clear that he and his accountant are quite familiar with navigating the tax code. Romney should know that the law currently allows a company that closes its American plant and moves manufacturing operations overseas to deduct that moving expense."

They went on to point out.......

"In fact, Senate Republicans recently blocked a Democratic bill that would have provided a tax credit to companies that move jobs back to the United States and ended a tax break for companies moving operations overseas."


Any thing a business does "legally" can be written off as a business expense.

If I owned a business in Arkansas and moved it to (gag) Texas I could write off all of those expenses.

Heck, if I move it across the street I could write off the expenses.

Romney lied.
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Old 10-05-2012, 11:29   #8
Goaltender66
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Quote:
Obama: Right now, you can actually take a deduction for moving a plant overseas. I think most Americans would say that doesn't make sense.
Romney: What the hell are you talking about?! (paraphrased)

It's clear what Obama was trying to do...he was trying to say the tax code has a special tax credit that encourages companies to move operations overseas, when the reality is there is no specific tax credit or disallowance of deduction in the tax code for locating jobs in the US.

The big "gotcha" Hyder is selling is that business expenses are deductible against ordinary income. Woooow. Bombshell.

That said, Obama tried to say later that not only did such a specific deduction on overseas relocation exist, but the Democrats tried to legislate against it only to be stopped by the boogeyman Republicans.

He's talking about a bill by Senator Stabenow (heh) that basically said "hey, ordinary business expenses are still deductible unless they are expenses for things I don't like, in which case give Obama your Dollah."


Quote:
No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.
So send a letter to your accountant, the postage is deductible. Send a letter to your CFO about a RRoR for a plant in Bangalore, not deductible.

Plainly, there is no special outsourcing tax deduction or tax credit. We're talking about normal business expenses which have been deductible for many years. And here we have a President agitating to using the tax code to punish people (yet again) who make the "wrong" decisions. This viewpoint is the very stuff of fascism.

Trying to say Romney lied by challenging a deliberate mischaracterization of the IRC by Obama is, itself, a lie...or, perhaps, Grief Stage Three.
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Old 10-05-2012, 11:34   #9
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Quote:
Originally Posted by Gunnut 45/454 View Post
Jobs?

The question came up in the debate! It isn't a law as Mitt said it a part of the Fed Tax code!

APB 23 permits U.S. multinationals to defer recognition of tax liability on foreign earnings for financial reporting purposes so that earnings are not reduced by the tax liability if they affirmatively assert that their foreign earnings are permanently or indefinitely reinvested. In 2011, more than 1,000 U.S. multinationals made such an assertion in their SEC filings, reporting in total that more than $1.5 trillion is or is intended to be reinvested offshore.

A perfectly legal thing to do as anyone would avoid at all costs paying anymore taxes then they need to and or are required by law to do! So again the Socialist in cheif doesn't understand companies as well as everyday Americains have a duty to share holders and themselves not to pay any more taxes then legal obligated too! So Mr. Socialist in cheif if you don't like the tax code change it!!! Oh wait that would require you to actually do some work wouldn't it! Scratch that!
1. The tax code IS law.
2. That's not what the conversation was about.

He was not talking about earnings.

He was talking about companies getting a tax break to move overseas. The act of moving overseas in and of itself does not get a tax break, and Mitten was correct in that assertion. Bongo was saying you get a tax break for moving overseas and thats incorrect.

So, you're right but for the wrong reason.

Everyone across the board gets relief for being out of the country, even individual workers. Work more then x amount of time over seas and you don't pay american taxes on it. If you do have taxable income overseas, you get credit for any tax you pay locally. Nothing new here.
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Old 10-05-2012, 11:39   #10
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Originally Posted by Goaltender66 View Post
Plainly, there is no special outsourcing tax deduction or tax credit. We're talking about normal business expenses which have been deductible for many years. And here we have a President agitating to using the tax code to punish people (yet again) who make the "wrong" decisions. This viewpoint is the very stuff of fascism.
Thats the real crime right there. Businesses wouldnt want to locate elsewhere if we didnt have the highest corp taxes anywhere in the world.

A corporation is a just a paper construct around which a business organizes itself. It shouldn't be taxed at ALL. Its merely a conduit thru which income flows. That income should be taxed once, when it reaches a human hand. Dividends, capital gains, paychecks get taxed when they're distributed to a human being.
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