Sunday, May 10, 2009

Obama's Economic Berlin Wall

Obama's Economic Berlin Wall - The White House went on a mission this week to establish an economic Berlin Wall around American business. In a spectacularly misguided policy, the Obama Administration has proposed that the US Congress force US business interests that do business overseas and hold their profits overseas to pay US income tax on those profits irregardless whether or not those profits are repatriated to the United States.

The United States government enforces a particularly discriminatory tax policy known as worldwide taxation. Currently if a US business interest makes and sells a product overseas, pays the income tax in the overseas tax jurisdiction, the US government then taxes the profits of the US company. In almost every other country, territorial taxation is practiced. If a French company makes and sells a product overseas, the profits are taxed in the overseas tax jurisdiction, but when the French company repatriates those profits back to France, the company gets to keep those profits. The French government does not tax those profits again.

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