Does the tax bill

[ghostsinthemachine]

Free money held by US (Obama) in other countries for taxation avoidance?

I though he mentioned that yesterday and a friend just made that argument.

[FBaggins]

1. It is intended to do so. We'll see if it works.

Currently, US corporations that have overseas operations have to pay income taxes to the country where the income is earned... and in the U.S. when the profits come back in to the country. However, they can delay the US tax bill indefinitely by keeping the money in the foreign country (i.e., never bringing it back to the U.S.).

The current bill tried to make that less painful - hopefully getting more of those funds to re-enter the U.S. to be invested here.

We'll see to what extent it succeeds.

[unblock]

2. They do get a credit for foreign taxes paid

So it really just amounts to u.s. taxes once they repatriate the profits, not u.s. and the foreign country.

[unblock]

3. Yes, they can bring it home at a much lower tax rate now.

As a practical matter, companies have been borrowing in the u.s. instead of bring no by it back, achieving the same effect but avoiding th tax hit.

So yes, they’re more likely to actually bring it back now, but all they’ll do with it is pay back the earlier borrowing and/or buy back stocks or issue more dividends.

[ghostsinthemachine]

4. Thanks all

For your informative responses.