Saturday, November 5, 2016


Why would you move your company HQ to Ireland?
The video goes into this and you can watch if you wish, but the short form is this: The US corporate tax rate on profits is 35%, highest in the world. That's bad enough for the money your corporation makes in the US, but if you have overseas divisions making money, they will pay at least 12.5% on the profits to the host nation, AND when you bring the money back to the US you will pay the 35% rate. So that means your total tax rate by double taxation will be at least 47.5%. If you are a stockholder in the corporation, looking for return on your investment, this is a hell of a hit. So if the Board of Directors says "let's move the HQ to our existing presence in Ireland (or somewhere else) that means you'll still pay the 35% on the profits earned in the US, but now the profits you earn overseas only get taxed once, which makes you a much healthier company and able to give better return to the stockholders. This is not really disloyalty, this is just sensible business practice. If Congress would either lower the US corporate tax, or at the very least, allow credit for whatever taxes were already paid on the overseas profits, then there'd be less motivation to move out of this country. And actually, we'd probably end up both collecting even more in taxes while making our corporations healthier in global competition. What's not to like here? --Del

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