"We Want That Money Back"

"We Want That Money Back"

There is a new corporate tax coalition in town.

Such a statement would normally be as newsworthy as any other commonplace and irrelevant Washington phenomena such as "Congress is in session" or "President releases budget." But the newly-formed
Alliance for Competitive Taxation has several features that other lobbying groups lack.

As might be expected, the group wants to lower the U.S. federal statutory corporate tax rate (from 35 to 25 percent), move the United States to a territorial system of taxation (where foreign profits are largely exempt from U.S. tax), and allow the cash portion of
$1.7 trillion of "trapped" foreign profits to return home without paying full U.S. tax...

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What also makes this group different is that it acknowledges corporate tax reform must be revenue-neutral. It recognizes many, if not most. business tax expenditures must be cut to get anywhere near a 25 percent rate. And it is being reasonable about a territorial system and any U.S. transition to such a system. It recognizes there would have to be anti-base erosion rules and that if companies want their money back they will have to pay some U.S. tax on those earnings (albeit, something well below the 35 percent minus foreign tax credits that would be due under current law).

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View Marty Sullivan's opinion in its entirety on the taxanalysts® Blog.

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