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Corporate Taxes: Real-Life Experience

Wnope
Posts: 6,924
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8/24/2012 6:30:20 PM
Posted: 4 years ago
I had a rather enlightening experience recently.

My girlfriend, who has an MBA, was talking to me about how she would like to enter the particular industry she works in if she could run a company. She mentioned, off hand, that one of her first moves would be to base her company in Australia instead of America.

I asked why, and her response was that because of the significantly lower corporate tax in Australia (in her relevant industry), she could outbid American competitors when competing for projects.

Just food for thought to those who want to raise corporate taxes.
Stephen_Hawkins
Posts: 5,316
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8/24/2012 7:05:07 PM
Posted: 4 years ago
From personal experience, after doing business studies / economics, after interviewing about twenty local businesses, the reason why they set up is so they have independence, or so they can help the community, etc.

If you look at major business tycoons, the vast majority stay in their country out of patriotism or ease in the UK at least. e.g. Peter Jones, Pathitez, Sugar, etc. The better more common system is that they set the business up in Northern Ireland and send profits to Monaco (because of the way the tax system works, you get out of them all).

The people who say "I'll set up in Australia/some other far away place" 1) Don't understand how the taxation works and 2) Are thinking "If I set up a business" rather than "I've set up a business/I'm setting up a business, where shall I put it..."

Being inside a nation gives you subsidy bonuses, a better understanding of your market culture and other such things. If I was going in to, say, energy development, I would set up in Germany, because of the subsidies and culture, and the corporate tax is either small enough to not make a difference among my common competitors and I can outcompete them in other aspects, or I would be a large enough industry to find ways to avoid taxation.

Because if you think that you can outcompete with Chinese/South Asian businessmen using the cheapest labour around, with no real taxation, by moving to Australia, you're not understanding the tax system too well.
Give a man a fish, he'll eat for a day. Teach him how to be Gay, he'll positively influence the GDP.

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Contra
Posts: 3,941
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8/24/2012 9:51:52 PM
Posted: 4 years ago
At 8/24/2012 7:04:52 PM, OllerupMand wrote:
Does any one want to rise corporate taxes in America? I mean isn't it already extremly high?

The rate is really high, 39.6%, the highest rate in the world, but not the highest effective tax rate.
"The solution [for Republicans] is to admit that Bush was a bad president, stop this racist homophobic stuff, stop trying to give most of the tax cuts to the rich, propose a real alternative to Obamacare that actually works, and propose smart free market solutions to our economic problems." - Distraff

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Stephen_Hawkins
Posts: 5,316
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8/25/2012 4:09:40 AM
Posted: 4 years ago
At 8/24/2012 9:51:52 PM, Contra wrote:
At 8/24/2012 7:04:52 PM, OllerupMand wrote:
Does any one want to rise corporate taxes in America? I mean isn't it already extremly high?

The rate is really high, 39.6%, the highest rate in the world, but not the highest effective tax rate.

I thought Japan, the second best economically country in the world, was highest?
Give a man a fish, he'll eat for a day. Teach him how to be Gay, he'll positively influence the GDP.

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Chaos88
Posts: 247
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8/25/2012 5:11:12 AM
Posted: 4 years ago
At 8/24/2012 9:51:52 PM, Contra wrote:
At 8/24/2012 7:04:52 PM, OllerupMand wrote:
Does any one want to rise corporate taxes in America? I mean isn't it already extremly high?

I have heard people like OWS demand for higher corporate taxes, but I don't know if any politician is serious about it.

The rate is really high, 39.6%, the highest rate in the world, but not the highest effective tax rate.

The corporate tax rate is generally progressive, like the income tax rates, complete with brackets, which affect effective rates.

The rates are as follows: 15, 25, 34, 39, 34 (yes, it does dip), 35, 38 or 35%.
The brackets are: 0-50K, 75K, 100K, 335K, 10M, 15M, 18,333,333
If you make more that $18,333,333 you pay 35% on everything.

http://www.irs.gov...
page 16
NixonianVolkswagen
Posts: 481
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8/25/2012 6:10:22 AM
Posted: 4 years ago
At 8/24/2012 6:30:20 PM, Wnope wrote:
I had a rather enlightening experience recently.

My girlfriend, who has an MBA, was talking to me about how she would like to enter the particular industry she works in if she could run a company. She mentioned, off hand, that one of her first moves would be to base her company in Australia instead of America.

I asked why, and her response was that because of the significantly lower corporate tax in Australia (in her relevant industry), she could outbid American competitors when competing for projects.

Just food for thought to those who want to raise corporate taxes.

That's true, but on the other hand, she might stay in America for you.

So, we can raise corporate taxes as much as we want provided that you're dating big business. You up for it, champ?
"There is an almost universal tendency, perhaps an inborn tendency, to suspect the good faith of a man who holds opinions that differ from our own opinions."

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