The Trump administration is considering a rule change that would make it easier for American companies to stash money offshore to avoid U.S. taxes, despite the presidents repeated campaign promises to bring offshore cash back home.
The Treasury Department is looking to weaken or eliminate Obama-era regulations aimed at preventing companies from moving their income to their overseas branches to lower their U.S. tax bill, Bloomberg reports. Treasury Secretary Steven Mnuchin, a former Goldman Sachs executive, instead wants to replace the existing rules with something more business friendly.
The move would be a boon to large corporations, who already saw their taxes permanently slashed by the Republicans 2017 tax cuts, which overwhelmingly benefited companies at the expense of individual taxpayers.
Prior to the 2016 rule, companies were able to move money to their offshore branches that they could then lend to their American branches, while deducting the interest from the tax bill. The Obama-era rule allowed the IRS to consider these inter-company loans as equity, which eliminated a key incentive for companies to move profits overseas.
Democrats slammed the administration for trying to weaken rules that allow tax avoidance when it should be creating tougher ones.
One of the Trump administrations top priorities has been making it as easy as possible for the wealthiest Americans and corporations to cheat and avoid taxes, Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said in a statement. Rules preventing the offshoring of corporate profits should be strengthened not weakened.
Critics of the rule say it is no longer necessary because the tax cuts made these inter-company loans less attractive, according to Bloomberg.
Mark Mazur, Obamas former assistant secretary for tax policy at Treasury when the rule was created, disputed that claim.
On the face, they do slightly different things and so its hard to believe that the Tax Cuts and Jobs Act took care of every one of those dimensions, he told Bloomberg.
On its face, Republican criticism of the rule simply doesnt align with reality. Trump had earlier claimed that the 2017 tax cuts would bring back $4 trillion in offshore profits that had been stashed overseas. Through the end of 2018, his claim fell about $3.3 trillion short, Bloomberg reported earlier this year.
The tax law slashed the rate on repatriated profits from 35 percent to a onetime 15.5 percent tax rate on cash and an 8 percent tax on non-cash assets. Trump claimed that the change would bring back $4 trillion in offshore profits, even though banks estimated that only about $1.5 trillion to $2.5 trillion was held offshore by U.S. companies. Corporations brought back less than $670 billion from the time the tax law was enacted until the end of 2018.
Researchers also rejected Trumps claim that the repatriated profits would boost investment in the U.S.
Policy changes have a relatively small impact on hiring and investment decisions if firms have relatively easy access to credit markets, said a 2018 report from researchers at the University of Richmond and Claremont McKenna College.
Instead, companies have been using their tax savings for stock buybacks, in which companies buy back their own stock to return more money to shareholders.
A report from Citigroup found that companies in the S&P 500 spent more than $800 billion on stock buybacks in 2018, far more than the total amount spent on investing in new equipment or the total amount of repatriated cash.
Last year, Sen. Sheldon Whitehouse, D-R.I., and Rep. Lloyd Doggett, D-Texas,introduced a bill that would close loopholes in the tax law to equalize tax rates on domestic and foreign profits.
"President Trump promised the American people he'd end the march of jobs and profits overseas," Whitehouse said in a statement at the time. "Instead, he's doled out massive new tax breaks that reward offshoring."
Democrats again called out Trump for trying to help major corporations rather than workers.
Another betrayal by President Trump choosing corporations over American workers, wrote Sen. Sherrod Brown, D-Ohio. Shameful.
Go here to read the rest:
Trump promised to bring offshore profits back home. Now he's doing the opposite - Salon
- Offshore Company Registration and Bank Accounts for ... [Last Updated On: June 12th, 2016] [Originally Added On: June 12th, 2016]
- Introduction to Offshore Incorporation [Last Updated On: June 12th, 2016] [Originally Added On: June 12th, 2016]
- Offshore Magazine: Oil and Gas News Covering Oil ... [Last Updated On: June 12th, 2016] [Originally Added On: June 12th, 2016]
- How Offshore Drilling Works | HowStuffWorks [Last Updated On: June 14th, 2016] [Originally Added On: June 14th, 2016]
- Windpower Offshore - Offshore wind power projects & companies [Last Updated On: June 14th, 2016] [Originally Added On: June 14th, 2016]
- RC Boats by Offshore Electrics [Last Updated On: June 14th, 2016] [Originally Added On: June 14th, 2016]
- Jobs | Offshore JOBS - RIGZONE | Rigzone [Last Updated On: June 14th, 2016] [Originally Added On: June 14th, 2016]
- FE Trustnet Offshore: Offshore Top Mutual Funds | Offshore ... [Last Updated On: June 16th, 2016] [Originally Added On: June 16th, 2016]
- ICIJ Offshore Leaks Database [Last Updated On: June 16th, 2016] [Originally Added On: June 16th, 2016]
- Oil Offshore Marine - Oil and Gas Industry Jobs UK, Marine ... [Last Updated On: June 19th, 2016] [Originally Added On: June 19th, 2016]
- Offshore | Definition of Offshore by Merriam-Webster [Last Updated On: June 21st, 2016] [Originally Added On: June 21st, 2016]
- Offshore Wind Power - National Wildlife Federation [Last Updated On: June 25th, 2016] [Originally Added On: June 25th, 2016]
- Offshore Marine Contractors, Inc. - Offshore Lift Boats ... [Last Updated On: June 25th, 2016] [Originally Added On: June 25th, 2016]
- Offshore Theater | Free HD Surf Cameras California Hawaii [Last Updated On: June 25th, 2016] [Originally Added On: June 25th, 2016]
- Offshore Wikipdia [Last Updated On: June 25th, 2016] [Originally Added On: June 25th, 2016]
- Panama Offshore Legal Services | POLS - Attorneys [Last Updated On: June 29th, 2016] [Originally Added On: June 29th, 2016]
- Offshore Company Formation, Banking, Trusts and Asset ... [Last Updated On: June 29th, 2016] [Originally Added On: June 29th, 2016]
- Offshore drilling - Wikipedia, the free encyclopedia [Last Updated On: July 3rd, 2016] [Originally Added On: July 3rd, 2016]
- NWS Offshore Marine Forecasts by Zone [Last Updated On: July 14th, 2016] [Originally Added On: July 14th, 2016]
- Offshore Jobs | Offshore Jobs | Find yourself an Offshore ... [Last Updated On: July 14th, 2016] [Originally Added On: July 14th, 2016]
- Houston Offshore Engineering - Marine Engineering, Naval ... [Last Updated On: July 14th, 2016] [Originally Added On: July 14th, 2016]
- Offshore | TradeWinds [Last Updated On: July 14th, 2016] [Originally Added On: July 14th, 2016]
- Offshore | United States Sailing Association [Last Updated On: July 16th, 2016] [Originally Added On: July 16th, 2016]
- Offshore Jobs | $69,999+ Pay Possible | #1 Trusted ... [Last Updated On: July 16th, 2016] [Originally Added On: July 16th, 2016]
- Offshore Drilling and Exploration - The New York Times [Last Updated On: July 16th, 2016] [Originally Added On: July 16th, 2016]
- TDV Offshore [Last Updated On: July 23rd, 2016] [Originally Added On: July 23rd, 2016]
- Offshore Work - Employment Spot [Last Updated On: July 23rd, 2016] [Originally Added On: July 23rd, 2016]
- Offshore Companies | Offshore Banking - OffshoreSimple.com [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Offshore boats for sale - BoatTrader.com [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Key West Deep Sea Fishing | Offshore Fishing Charters and ... [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- The Offshore Group Jobs [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- UK offshore becoming safer, report finds - Offshore [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Latest Offshore Oil and Gas Industry News - Offshore ... [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Exmar Offshore [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Offshore Wind Energy | BOEM [Last Updated On: August 12th, 2016] [Originally Added On: August 12th, 2016]
- Island Offshore - HOME [Last Updated On: August 19th, 2016] [Originally Added On: August 19th, 2016]
- Offshore JOBS - RIGZONE [Last Updated On: August 21st, 2016] [Originally Added On: August 21st, 2016]
- Offshore | World Oil Online [Last Updated On: August 23rd, 2016] [Originally Added On: August 23rd, 2016]
- Used Offshore Yachts for Sale - Offshore Yachts MLS [Last Updated On: August 23rd, 2016] [Originally Added On: August 23rd, 2016]
- Offshoring - Wikipedia, the free encyclopedia [Last Updated On: August 23rd, 2016] [Originally Added On: August 23rd, 2016]
- Offshore Fishing Charters in Florida [Last Updated On: August 25th, 2016] [Originally Added On: August 25th, 2016]
- Offshore Company Formation, Incorporation & Bank Accounts [Last Updated On: August 25th, 2016] [Originally Added On: August 25th, 2016]
- Offshore Definition | Investopedia [Last Updated On: September 11th, 2016] [Originally Added On: September 11th, 2016]
- Home | Discover Oil & Gas | Rigzone [Last Updated On: October 23rd, 2016] [Originally Added On: October 23rd, 2016]
- Offshore Bag - Bad Ass Work Bags [Last Updated On: November 6th, 2016] [Originally Added On: November 6th, 2016]
- API | Offshore [Last Updated On: November 6th, 2016] [Originally Added On: November 6th, 2016]
- Offshore company - Wikipedia [Last Updated On: November 12th, 2016] [Originally Added On: November 12th, 2016]
- Offshore - Wikipedia [Last Updated On: November 23rd, 2016] [Originally Added On: November 23rd, 2016]
- EscapeArtist - Live, Work, Travel, Retire & Invest Overseas [Last Updated On: December 15th, 2016] [Originally Added On: December 15th, 2016]
- Offshore installation manager - Wikipedia [Last Updated On: December 25th, 2016] [Originally Added On: December 25th, 2016]
- Offshore drilling - Wikipedia [Last Updated On: January 8th, 2017] [Originally Added On: January 8th, 2017]
- Offshore Energy 17 [Last Updated On: January 11th, 2017] [Originally Added On: January 11th, 2017]
- Welcome to Siem Offshore: Siem Offshore AS [Last Updated On: January 19th, 2017] [Originally Added On: January 19th, 2017]
- Offshore - novenco-marine.com.php56serv2.webhosting.dk [Last Updated On: February 3rd, 2017] [Originally Added On: February 3rd, 2017]
- First offshore installation work completed on Johan Sverdrup - Oilfield Technology [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- Hornbeck Offshore Services (HOS) Given Average Rating of Hold by Brokerages - Sports Perspectives [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- Offshore Work Begins on Relocating US Base on Okinawa - ABC News [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- China's Market News: Offshore Yuan at Cross Roads Amid Widened Spread - DailyFX [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- Diamond Offshore sees recovery when oil 'well over $60' - Reuters [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- Japan begins offshore construction work on moving US base in Okinawa - RT [Last Updated On: February 6th, 2017] [Originally Added On: February 6th, 2017]
- Further decline in North Sea offshore supply work - BBC News [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Offshore Drillers See Gains, But Recovery Afar - E&P [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Shell Aims To Sell Stake In Danish Offshore Oil, Gas Venture - OilPrice.com [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Offshore Profits and US Exports - Council on Foreign Relations (blog) [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Offshore Drillers Are Still Seeking Recovery Enjoyed by Shale - Bloomberg [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Offshore Wind Moves Into Energy's Mainstream - New York Times [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Diamond Offshore Surprises Everyone With a Fourth Quarter ... - Motley Fool [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Trump's Plan to Tap Offshore Profit for Infrastructure Gains an Ally ... - Bloomberg [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Dems: Don't repeal offshore tax rules | TheHill - The Hill [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Wind Overtakes Coal Power in Europe as Turbines Head Offshore - Bloomberg [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Tullow finds 'live' oil offshore Jamaica - Jamaica Gleaner [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- ORC and IRC unite offshore racing fleets for 2018 World ... - International Sailing Federation [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- Shares of Seadrill Went in the Exact Opposite Direction of Other Offshore Drillers in January - Motley Fool [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- Coalition urged to charge 10% royalty on offshore oil and gas projects - The Guardian [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- After selling off all oilsands assets, Statoil looks to Newfoundland offshore - Calgary Herald [Last Updated On: February 11th, 2017] [Originally Added On: February 11th, 2017]
- Israel Puts Off License Award In First Offshore Oil, Gas Bid Round - OilPrice.com [Last Updated On: February 11th, 2017] [Originally Added On: February 11th, 2017]
- Cost Impact of Immigration and Visa Reform to US Customers Using Offshore Services - Forbes [Last Updated On: February 11th, 2017] [Originally Added On: February 11th, 2017]
- These Offshore Drilling Stocks Are Up Big as Earnings Season Starts - Fox Business [Last Updated On: February 11th, 2017] [Originally Added On: February 11th, 2017]
- Oil and Gas Stock Roundup: The Outlook for Offshore Drilling Continues to Dim - Fox Business [Last Updated On: February 12th, 2017] [Originally Added On: February 12th, 2017]
- Offshore crew eyes weather gains - reNews [Last Updated On: February 13th, 2017] [Originally Added On: February 13th, 2017]