Who knew accounting and tax havens could actually be interesting! Clear explanations are unusual with this stuff. Just more proof of the value of the Duke MBA experience.
But in this entire desperation of the US Govt to fill coffers with tax terrorism, it doesn't seem to respect the fact that a dollar invested abroad gets much higher returns because now offshore manufacturing locations are also BIG consumer markets and in most cases margins are much higher than post imports to US markets. e.g. an iPhone made in China makes more margins selling in India than in the US even after factoring Fx risk. What US should do to get business back into US is to increase the import duties in US, a market that is still big enough that American capitalist cannot afford to ignore. This must be done ASAP before China gives a damn. In any case you can't do much if IBM decides to incorporate in Singapore lock stock and barrel and then acquires US assets as a foreign investor. Now you can't attack Singapore. It is a tiny country. Some Facebook execs have already moved there.
Tax Avoidance is what people do, when they deduct charitable contributions, state and local taxes, IRA contributions. Why is Tax Avoidance even an issue?
Because there's a difference between a small deduction which everyone has access to, and almost trillion dollar companies that pays no tax. There are hospitals, social programs, investments in infrastructure and much more that are now not funded or initiated due to these loopholes.
Thank you very much Prof Dyreng- very informative and well explained.
Who knew accounting and tax havens could actually be interesting! Clear explanations are unusual with this stuff. Just more proof of the value of the Duke MBA experience.
🙋
Hi Professor Dyreng. Am I safe to assume Ted Cruz and his promise to abolish the IRS and employ a "Flat Tax" is simply political fodder?
But in this entire desperation of the US Govt to fill coffers with tax terrorism, it doesn't seem to respect the fact that a dollar invested abroad gets much higher returns because now offshore manufacturing locations are also BIG consumer markets and in most cases margins are much higher than post imports to US markets. e.g. an iPhone made in China makes more margins selling in India than in the US even after factoring Fx risk. What US should do to get business back into US is to increase the import duties in US, a market that is still big enough that American capitalist cannot afford to ignore. This must be done ASAP before China gives a damn. In any case you can't do much if IBM decides to incorporate in Singapore lock stock and barrel and then acquires US assets as a foreign investor. Now you can't attack Singapore. It is a tiny country. Some Facebook execs have already moved there.
situation of running companies.....
Tax Avoidance is what people do, when they deduct charitable contributions, state and local taxes, IRA contributions. Why is Tax Avoidance even an issue?
Because there's a difference between a small deduction which everyone has access to, and almost trillion dollar companies that pays no tax. There are hospitals, social programs, investments in infrastructure and much more that are now not funded or initiated due to these loopholes.