BANKRUPT PUERTO RICO,USA IS A FAVORITE CORPORATE OFFSHORE TAX HAVEN
Puerto Rico, a US Territory, was coded with the help & influence of "big" corporations and their $$$ lobbyists, as an IRS foreign offshore TAX HAVEN that, of course, uses the US dollar.
Perhaps PR might also be used as money laundering and dollar exchange from foreign currency to dollars, brought from foreign countries where these corporations do their business with cheap labor. This has not created jobs in Puerto Rico. It has not helped small business, has not helped Puerto Rico, USA.
As a matter
of fact, being a tax haven for only the very rich while the middle class pay the highest taxes in the US, has destroyed Puerto Ricans' lives and Puerto
Rico's economy and a million fellow citizens have moved to Florida. Being US Citizens, Puerto Ricans can vote, which has also upset the prognosis of the Presidential Elections in the swing state of Florida.
MJR
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A Stranded $2 Trillion Overseas Stash Gets Closer to Coming Home
THE NY TIMESBy JEFF SOMMER
NOV. 4, 2016
Under current rules, by declaring that foreign profits are permanently or indefinitely reinvested abroad, American companies can defer taxation on that money. How much money, exactly, is subject to interpretation, but careful estimates extend from about $2.4 trillion to roughly $3 trillion.
One reason is that the sums that could be made available for use by the government have become staggeringly large. Like the gravity of an outsized planet, the concentration of so much money creates a nearly irresistible force: Something needs to be done about it.
An approach called deemed repatriation — in which untaxed foreign corporate profits are subject to immediate taxation — would provide a gigantic infusion to the Treasury and give corporations a significant incentive to move money home. Leading plans in Congress include this approach, Mr. Kleinbard said.
Reforming the tax code is anything but simple, however. The details are crucial, and there are plenty of them, giving corporate lobbyists ample opportunity to shape eventual changes in a manner that favors the big companies.
First, it’s not easy to discern the actual size of the stash of corporate money abroad. One solid figure comes from the congressional Joint Committee on Taxation, which estimated in late August that as of 2015, the total of “undistributed” and “not previously taxed” foreign earnings of American companies amounted to $2.6 trillion.
Consider the implications of that sum for a moment.
My calculations show that at that rate, the lost corporate tax revenue would amount to almost two-thirds of all the money ($1.39 trillion) paid by Americans in personal income tax in 2014, according to Treasury data. And the lost tax revenue is more than 2.5 times the income tax paid annually by American corporations. Even if corporations were given a big break — which is highly likely under any tax code revision — the impact of any tax payments on those profits would still be large.
For one thing, studies show that in 2004 when the American Jobs Creation Act granted a “tax holiday,” in which companies were allowed to bring money home at a 5.25 percent tax rate, they used very little of their repatriated money to create jobs or develop new businesses or technologies. Most of the cash simply flowed to investors in the form of buybacks and dividends.
“The holiday gave multinational firms a signal that there was no reason to pay the full tax due at repatriation,” Kimberly Clausing, a professor at Reed College, wrote in a recent paper. “Instead, one should wait for the next holiday or lobby for a tax system that exempts foreign income entirely.”
For these reasons, in a recent report for clients, Goldman Sachs suggested that investors consider buying shares of companies with the biggest untaxed foreign earnings: Microsoft, General Electric, Apple and Pfizer, which also top the list of untaxed earnings giants compiled by Audit Analytics, an accounting research firm.
A gigantic pot of money is sitting overseas. It will be up to the next president and Congress — and their counterparts abroad — to decide exactly what to do about it.
NOV. 4, 2016
The next president may have a rare opportunity to close tax loopholes that have let American corporations stash more than $2 trillion in untaxed profits outside the United States.
Under current rules, by declaring that foreign profits are permanently or indefinitely reinvested abroad, American companies can defer taxation on that money. How much money, exactly, is subject to interpretation, but careful estimates extend from about $2.4 trillion to roughly $3 trillion.
One reason is that the sums that could be made available for use by the government have become staggeringly large. Like the gravity of an outsized planet, the concentration of so much money creates a nearly irresistible force: Something needs to be done about it.
An approach called deemed repatriation — in which untaxed foreign corporate profits are subject to immediate taxation — would provide a gigantic infusion to the Treasury and give corporations a significant incentive to move money home. Leading plans in Congress include this approach, Mr. Kleinbard said.
Reforming the tax code is anything but simple, however. The details are crucial, and there are plenty of them, giving corporate lobbyists ample opportunity to shape eventual changes in a manner that favors the big companies.
First, it’s not easy to discern the actual size of the stash of corporate money abroad. One solid figure comes from the congressional Joint Committee on Taxation, which estimated in late August that as of 2015, the total of “undistributed” and “not previously taxed” foreign earnings of American companies amounted to $2.6 trillion.
Consider the implications of that sum for a moment.
My calculations show that at that rate, the lost corporate tax revenue would amount to almost two-thirds of all the money ($1.39 trillion) paid by Americans in personal income tax in 2014, according to Treasury data. And the lost tax revenue is more than 2.5 times the income tax paid annually by American corporations. Even if corporations were given a big break — which is highly likely under any tax code revision — the impact of any tax payments on those profits would still be large.
For one thing, studies show that in 2004 when the American Jobs Creation Act granted a “tax holiday,” in which companies were allowed to bring money home at a 5.25 percent tax rate, they used very little of their repatriated money to create jobs or develop new businesses or technologies. Most of the cash simply flowed to investors in the form of buybacks and dividends.
“The holiday gave multinational firms a signal that there was no reason to pay the full tax due at repatriation,” Kimberly Clausing, a professor at Reed College, wrote in a recent paper. “Instead, one should wait for the next holiday or lobby for a tax system that exempts foreign income entirely.”
For these reasons, in a recent report for clients, Goldman Sachs suggested that investors consider buying shares of companies with the biggest untaxed foreign earnings: Microsoft, General Electric, Apple and Pfizer, which also top the list of untaxed earnings giants compiled by Audit Analytics, an accounting research firm.
A gigantic pot of money is sitting overseas. It will be up to the next president and Congress — and their counterparts abroad — to decide exactly what to do about it.
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