Corporate Tax Reform

by Laura Ehrenberg-Chesler on November 1, 2017

in Investment Strategies,politics,taxes

I recently read a very good article in Fortune’s online publication about why corporate tax reform is so important. The author of the article uses Apple as an example. The following is the short introduction to the author’s six part guide to the taxation of multinationals. The entire article is well worth reading.

“Surprisingly, the plethora of confusing terms makes the taxation of multinationals look more complicated than it really is. Mastering the details is a wonkish exercise to be sure. But no exercise is more essential to understanding how multinationals react to a U.S. tax code that imposes rates far higher than those in competing nations, and creates an irresistible incentive to stash profits abroad, when that cash could earn bigger returns stateside. Indeed, examining Apple shows why sweeping tax reform is so important, not just because it would lower rates, but chiefly because it would free our tech, pharma, and auto titans to invest their worldwide capital wherever it earns the biggest returns.

So based on Apple’s financials for FY 2016 (ended in September), here’s a six-part guide to taxation for multinationals. It’s important to emphasize that Apple actually pays a lot of tax compared to other U.S.-based corporations with immense foreign earnings, and takes a highly conservative approach to tax accounting.”

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