The Homa Files

Pres O says that he’ll go after US companies that take advantage of tax loopholes to ship American jobs offshore.

I assume that he’s talking about the “loophole” that says companies pay taxes on profits where they are realized.  For example, if a company has a subsidiary in Aruba, its subsidiary pay’s income taxes in Aruba … not in the US.  Conversely, if an Arubian company has a subsidiary operating in the US, its US subsidiary would pay US income taxes (but not Arubian taxes).  That’s standard operations around the world. No double taxation of income.

Pres O can’t possibly be thinking of double taxing US corporations.  If he is, companies can simply reincorporate offshore … and only pay US taxes on money made by its US subsidiary operations … just like foreign companies (think Nestle, Unilever) do now.  Certainly, the US government won’t try to tax Nestle on its Swiss earnings, right?  what would be the difference?

Pushing companies out of the US just doesn’t seem like a bright idea to me …

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This entry was posted on March 2, 2009 at 7:58 am and is filed under Obama - Promises Made & Kept, Obama Administration, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.