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  • Lawmakers and White House Explore Corporate Tax Reform for US Firms Overseas

    Apple and Google, along with other major US-based multinational companies may soon be able to bring more of their foreign-earned income back to American shores without facing a large tax burden. As lawmakers are moving forward on a tax reform framework, the reform could eliminate taxes on international earnings and authorize a one-time repatriation holiday.

    According to The Wall Street Journal, congressional leaders on both sides of the aisle and the White House are now on the same page when it comes to corporate tax reform. The revamp, which might also include new tax rules for intellectual property, would help raise money to fund an expansive highway infrastructure investments program. Rep. John Delaney told the publication the following:

    Everyone is largely in agreement on the building blocks of a deal. The sentiment in Congress is to get the framework set, so then we can arm wrestle on the numbers.
    It should be noted that as of right now, the US is the only developed country that imposes taxes on the worldwide income of its citizens and corporations.

    Alongside the broader tax rewrite, both parties have reportedly agreed that it would be beneficial to offer a one-time repatriation tax holiday that would allow multinationals to bring their current foreign cash back to the US at a steeply discounted tax rate. If these companies werenít given such an opportunity, most companies, including Apple, would choose to fund expensive US-based projects with debt, considering that even a long-term debt service is cheaper than paying high US taxes on money that has already been taxed once overseas.

    Itís not a surprise to see Apple CEO Tim Cook appearing before congressing and standing strong with the stance encouraging a corporate tax reform. Back in 2013, Cook said the following when asked why Apple kept so much money overseas:

    It would be very expensive to bring that cash back to the United States. Unfortunately, the tax code has not kept up with the digital age.
    During the recent third-quarter earnings call, Apple revealed that its cash pile has surpassed $200 billion with $190 billion being kept overseas.

    Source: The Wall Street Journal
    This article was originally published in forum thread: Lawmakers and White House Explore Corporate Tax Reform for US Firms Overseas started by Akshay Masand View original post