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shrug If the bribe is less than the amount you save on taxes, it works out.
Example: US corporations right now have about $2 trillion in overseas accounts which they’re not onshoring because they don’t want to pay a 35% tax rate, working out to about $700 billion.
Suppose they can convince Congress to give them a “one-time” (cough yeahrightwaittillnexttime cough) tax rate of 10% for onshored funds. That would be $200 billion, a savings of $500 billion.
Suppose, economy-wide, that they spend a total of $50 billion lobbying Congress to make this happen, which is an ungodly amount of lobbying money. If they estimate that they have better than a 10% chance of success, the $50 billion is worth it. A 1% chance of success? A $5 billion lobbying effort is still worth it. Reduce these somewhat if the companies feel they’re losing value on leaving funds overseas, which they are – and that amount can be affected by legislation.
From the country’s point of view, it’s the opposite. You’re due $700 billion in taxes. You’re getting none of it as long as it’s off shore. Can you outwait the corporations? Put pressure on them to onshore funds through various legislation?
Suppose you think you have a 50% chance of outwaiting companies representing 50% of the funds. Then one-quarter of it will come back, totaling $175 billion. If you think you have an 80% chance of outwaiting 70% of them, then you’ll receive 56% of the amount due, $392 billion. Suppose that your projections are over a window of 10 years and this discounts to a present value of $340 billion. Then under such circumstances, you shouldn’t offer a repatriation deal that settles for anything less than $340 billion immediately.
This is why it’s absolutely crucial for the U.S. to put up a firm front and say “no” on a repatriation tax amnesty, coupled with legal pressure to get corporations to drop mailbox fronts that aren’t legitimate overseas operations and pay their honest taxes. If we are anything less than resolute, the companies’ math favors being stubborn. You have to show them they’re going to lose out by leaving money out of the country, and they’re not going to get us to cave on their tax rate.
WOOOOOOOOOOOOOOOOOOOOOOO
I think Kamen Rider Bravo would like a word
Tamarinds? Isn’t that where Starfire is from?
Durian doesn’t need to be taxed.
Not enough people like it, and those who do won’t be deterred by taxation.
cracks open a durian fruit
dons his gas mask Cripes, wrong order! Augh!
Tamarinds, Kumquats, Clementines, and Japanese Persimmons also avoided mention.
Or is Celestia one of those ponies who still think it’s a vegetable?
@rafasilva
@mathprofbrony
She’s trying to trick somebody into asking about them. You know what that will lead to.
You can’t tax the sacred fruit.
Not “bigger.” ;)