News Item, WSJ
May. 4th, 2004 06:54 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
jenkWASHINGTON -- The U.S. system for taxing overseas profits of American companies is so riddled with loopholes and credits that the government would collect $6 billion more each year if it stopped trying to tax those profits altogether, according to a new estimate by congressional tax experts.
The assessment comes as U.S. companies, particularly those with big foreign operations, face increasing scrutiny and criticism for skirting U.S. taxes and moving production abroad.
Current law aims to tax the profits of U.S. companies no matter where they are earned. But plenty of foreign profits escape taxation because the complex U.S. system allows so many breaks, including deductions for interest on loans funding operations abroad and credits for taxes paid to foreign governments.
Global U.S. companies routinely use those deductions and credits to reduce their overall tax burdens. In essence, the U.S. tax code gives them more in tax breaks for foreign operations than it collects in revenues, according to the estimate by the Joint Committee on Taxation, the nonpartisan scorekeeper on taxes for Congress. - WSJ
The assessment comes as U.S. companies, particularly those with big foreign operations, face increasing scrutiny and criticism for skirting U.S. taxes and moving production abroad.
Current law aims to tax the profits of U.S. companies no matter where they are earned. But plenty of foreign profits escape taxation because the complex U.S. system allows so many breaks, including deductions for interest on loans funding operations abroad and credits for taxes paid to foreign governments.
Global U.S. companies routinely use those deductions and credits to reduce their overall tax burdens. In essence, the U.S. tax code gives them more in tax breaks for foreign operations than it collects in revenues, according to the estimate by the Joint Committee on Taxation, the nonpartisan scorekeeper on taxes for Congress. - WSJ
