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cheapbag214s
Posted: Tue 8:21, 03 Dec 2013
Post subject: isn't the corporate tax rate
U.S. firms are shifting profits to tax havens -- because they can
WASHINGTON, March 27 () -- The percentage of profits paid in taxes by U.S. multinationals has diminished sharply in recent years, records of blue-chip corporations indicate.Research firm S&P Capital IQ said companies included in the Dow Jones industrial average -- a select group with representatives from most major business sectors -- are paying about half the federal tax rate they were paying in the late 1960s.In the late 1960s they were paying 25-50 percent of their worldwide profits to the Internal Revenue Service, The Washington Post reported Wednesday.But that was then.The biggest change over the years, studies indicate, isn't the corporate tax rate, although that has diminished sharply with the top rate falling from 48 percent in 1971 to the current 35 percent.The more significant change is the globalization of the multinationals and their understanding of how to move profits to show up in countries with advantageous rates, the Post said.A study by the Congressional Research Service released in January revealed that among U.S. multinational corporations in 2008 more than 40 percent of their overseas profits were reported in Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland -- countries that are neither production centers nor the location of most of their overseas administrative employees.Examples of corporate gamesmanship abound. One Senate subcommittee said Dow component Microsoft assigned almost half of its net revenue from U.S. sales from 2009 to 2011 to a subsidiary in Puerto Rico,[url=http://www.ewwealth.com/]christian louboutin outlet[/url], where it had transferred ownership of various intellectual property rights.The same study by the Subcommittee on Investigations said that corporate profits reported in 2008 in Bermuda came to 1,000 percent of the country's gross domestic product. Nine years before that, profits reported in Bermuda came to 260 percent of the country's GDP, the report said.Franchise restaurant giant McDonald's in 1973 paid more than 37 percent of its worldwide profits in U.S. federal taxes. That dropped to 14 percent in 2012.United Technologies has seen an even sharper drop in its effective U.S. tax rate. In 1969, it paid 47 percent of its profits in federal taxes. That has fallen to 5.8 percent, the Post reported.Corporate tax expert Robert Willens said profits provided the motivation for keeping taxes low, but the government was not making the maneuvering hard to do."I think people realize now that it's not difficult to avoid U.S. taxes ... and investors are demanding consistently improving performance,[url=http://www.ewwealth.com/]louboutin sale[/url]," he said.
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