InsideTech

Rather than taxing US companies more on their foreign earnings, maybe Obama should bring the tax rate in the USA to the same level as these other countries the IT giants are operating from. We have to be more global in our outlook, and the global equilibrium will be reached no matter what individual countries do. Eventually the countries that offer the most attractive terms will get global companies migrating there.

There has to be a more comprehensive solution than what Obama has tabled so far if these outstanding global companies are to be wooed to stay in the USA.

Somehow I don't think giving companies a huge incentive to flee the US is going to help the economic situation. If they're going to get doubly taxed, why not just flip the current situation around and put corporate HQ in some other country and export to the US? Sure it's fun to complain about the big, evil baby-eating corporations but at the end of the day they're the ones employing the majority of the tech sector and shafting them, while maybe appealing to populist angst, means even less employment prospects for the rest of us.

The President does not want to go after overseas profits. He simply wants to close a loophole that allows companies to avoid paying taxing a American profits by have "companies" that are no more than a P.O. Box number in off-shore places like the Cayman Islands. Many of these companies are telling our IRS that the money was earned in another country and telling the other countries that they are American companies and do not have to pay the foreign taxes...so they end up paying NO taxes. That is wrong.

They weren't rewarded... they just left and said FY to the US. GW Bush waved as they sailed away.

The wrong thing to do is to go chasing after taxes and further alienating these companies, who are only looking at it from a business standpoint.

Nay I say, pull them back with lower-to-no income tax, and get this country innovating with Americans again. Our country needs to move to consumption-based taxes not front-loaded income taxes that are the favorite juggling ball of politicians who use income tax for every conceivable project they can think of. Sales taxes would be better, there's less resistance from people to pay a consumption tax and that means foreigners alike pay the same taxes as locals.

It's very difficult for me to understand why Washington can't just get rid of the income tax altogether, lower corporate taxes across the board, and let cold hard cash in the public sector jump-start innovation. If I didn't have to pay taxes on my income, and instead only have a sales tax, wouldn't that stimulate the economy? Isn't an economy about selling goods and services? Isn't a sales tax based on selling something?

Seems to be really easy to fix the economy. If corporate america had to pay no income tax, and only tax on sales, they too would return back to America so fast your head would spin. And yes, it would be fair. Imagine people at the lowest rung of the economic ladder, they work on a cash basis already, the difference is they'd have no reason to work outside the system, since everyone would be taxed on sales. The money brought in from sales tax alone would be more than all the effort spent on trying to make income tax work, even if it were less than 10%, because it would be equal across the board.

Ok, everyone take a step back for a moment and consider. There is no 'one' sect that is the culprit of today's problems.

The US government is failing to realize that we are a capitalist nation, in a largely capitalist world economy. For our economy to survive and succeed, they need to think OPERATE like a business. Note: I did not say 'think' like a business, as the government needs to 'think' of its citizens first. They just need to take some notes from the playbooks of successful businesses and learn to operate both Efficiently and Effectively within it's means.

Unfortunately this is just about impossible 90% of the time because, by definition, the government is trying to please EVERYONE, and history shows that is the quickest route to failure. On this aspect of government, I only have this to say. Be a Parent! Set the rules, and abide by them. Provide the basic rights and needs to the citizens, and anything beyond that just encourage them to provide for themselves or start businesses! It is true that small businesses are the root to a good economy, but for them to foster they need a stable and PREDICTABLE government.
So as far as the government operation goes, I say back to the basics.

Now the goal of any and almost all business is for PROFIT. So we can't necessarily blame them for making decisions based on what allows them to make a profit... to a point. The line that gets crossed often, though most times it is quite gray and fuzzy to begin with, is ethics.
The point is that we need to foster an environment where those that hold the power in business have a simple and well-enforced choice. Either operate within the US, for the benefit of the US citizens, or operate outside the US and be treated as any other foreign entity, tariffs and all.

In that situation the choice will be simple for any business, which situation yields the better profit? This is where the US government will need to operate like a business. It will need to directly compete with other countries to offer a better cost to value advantage than competitors.

Now all of this seems simple, and it is. But the devil is in the details in as such as the question: How do we get There from Here?

I'm an IT expert and a Business major, not a political one so I wont assume to know the best methods or even the best starting point for this sort of change. But all I can say is my opinion is that someone needs to throw the brick through this glass ceiling.

The bottom line is, we need to make it more profitable for these companies to keep jobs here in the US. If it costs more in taxes to outsource to India or China, they will cease the practice.

These corporations will not suffer any major losses, they will merely shift the ballance back. They will do as they have always done and adapt their business paradigm to maximize their profits.