[Mavdog]

Originally posted by: kg_veteran
Glad to see that you dropped the whole "US corporate taxes aren't high" bit. Especially considering your man Kerry thinks so, too.

I believe that all taxes are “too high” kg, my difference of opinion is the point that taxes on US businesses are an uncompetitive weight and need to be lowered. I pointed that the business portion of the US tax receipts was at “historic lows”.

The public sector is growing greatly, tax revenue decreasing from business means a greater burden on other tax producers

The net affect of the proposal is an increase in near term tax collections.

Under current law all these foreign profits are subject to taxation when returned to the US. They don't "avoid" paying the tax, they defer. They don't leave the profit forever, what good would that be?
The doomsday scenario for US business is laughable.

The flaw in your thinking is that they have to return the profits to the United States. Here's what John Kerry has to say about it

Kerry's phrase is wrong. They were accurate when it was mentioned above that specific quote:

"FUNDAMENTALLY REFORM AMERICA'S INTERNATIONAL TAX SYSTEM. John Kerry will fundamentally reform America's international tax system, eliminating tax breaks for companies that create jobs overseas and using the approximately $12 billion in annual savings to cut the corporate tax rate. Under John Kerry's plan, more than 99 percent of taxpaying companies will see their taxes go down.
· End tax breaks that encourage companies to move jobs overseas by eliminating the ability of companies to defer paying U.S. taxes on foreign income.
· Close abusive international tax loopholes.
· Cut the corporate tax rate by 5 percent.

It's rather enjoyable to refute your points using your idol's own words.

I wouldn’t call him an “idol”, as I said he made a mistake in that quote and the point hasn’t been refuted.

US cos. will pay a tax on the foreign income when they bring that money home. They cannot avoid the tax when it comes home.

A co. can keep the money in foreign ops, tho that makes it tough to use it. Sound business practice is to bring it back to the parent to be used in investing in their business. The objective of the proposal is motivating US cos. to bring it home, juicing investment in domestic industry.

Taxing them equally just heavily increases the cost of doing business for US multinational companies. If Kerry wanted to REALLY give incentive to return JOBS to the United States, he'd propose what Hassett suggested: a return of the corporate tax rate to around 18% (the world average in 2001).

Oh, Hassett found time to stop impugning Kerry’s character long enough to make a point?

I disagree with the concept of a need for these cos. to decrease their share of tax receipts. US business has led the world in ROE as well in their equity valuations, there's no apparent need for tax relief to stay competitive.

A 50% reduction in their tax rate? They’ll be then paying a historic low in total tax receipts while government spending is increasing along with the national debt.

1995? Anyway, I don't know what assets she has

Thank you for the admission.

Where’s yours? None of us, including the writer, knows what assets she has today.

It wasn't a question of the "calculations", you incorrectly said "His wife has to give him an allowance out of that $33 million tax break", it's not a tax break.

Ah, that's right. You'd rather argue semantics than make a point.

The writer's calculation was that (assuming she owned 4% of Heinz Corp.) she'd see a savings of $33 million from the loophole in the Kerry plan. A calculation you don't refute.

Here it is:
”the Kerry plan on that company's value would be tremendous. If we assume that deferring U.S. tax on their foreign income saves them the difference between the U.S. tax and the average foreign tax, then that adds up to annual savings of about $43 million. With a P/E ratio of 19.35, that means that absent the loophole, the firm's market value would drop by about $832 million upon passage of the Kerry tax plan. Assuming that the Kerry-Heinz family's share of the company is four percent, which is the upper limit of what has been reported, then this loophole saves Mr. Kerry's family around $33 million.”

The writer assumes a tax savings by the Heinz. Corp, the affect on earnings and the assumed decrease in market cap for Heinz Corp., concluding the number is $832M, so the intended to be shocking no. of $33M in declining value to Theresa Heinz if she owns 4%, which is the max she could hold without being listed on the public docs of owners. The calculations are fine with all the presumptions, but that doesn’t make it a “33M tax break”, nor is it ‘savings’ either. It’s a paper loss realized if the stock is sold.

It’s just as easy to presume a slightly higher p/e so no real loss in value would be there.

The goal of his illustration was to throw some big number of suggested personal gain to Kerry. That’s not good journalism nor good analysis.

What's amazing is the phrase "Kerry's wife's company" which it is not. Theresa Heinz doesn't own Heinz Corp

Funny how you can admit you don't what her assets are in one breath, then claim you do in the next.

Your flip-flopping would make Kerry proud.

No flopping here I’m saying that NONE of us know what she owns.

So if she has any stock at all, which none of us know, she might own as much as 4%, isn’t involved in the company and somehow in your world it’s accurate to say it's “her company”? Ridiculous. With the high level of institutional and fund ownership I showed, it’s clear whose company it is, and it’s not Theresa Heinz Kerry.

So that is a reason to not mention the proposal and how it might increase tax collections by the US Government? Nice attempt to avoid the subject BTW.[/i]

It refutes itself as the article is incorrect in its premise that the US cos. "avoid" rather than defer taxes.

See above. Explain to me how a company can avoid paying tax on money they return to the US.

Kerry's proposal says "Under John Kerry's plan, more than 99 percent of taxpaying companies will see their taxes go down."

If you're a multinational company that generates 50% of its income domestically and 50% of its income abroad, and you were paying around 40% on the half that you generate here and 18% on the half you generate elsewhere, it sounds like your overall rate is 29%. I'm no genius, but that's what it sounds like. If you suddenly drop the U.S. tax rate by 5% and make me pay that rate on all of my income, now my overall rate is 35%.

I guess I'd like to see how Kerry comes up with the "more than 99 percent" number, because it sounds awfully fishy to me.

The plan Kerry proposes is to give a short term impetus to business investment. The cos. will over a longer term be returning these earnings, the plan says do it now and here’s a break to do so.

It borrows future tax revenue to motivate business to invest today. That’s a better concept than decreasing business’s share of tax receipts today by lowering their rate by 50%.