OT: Bad Mojo

[Narrew]

[quote]Originally posted by Yimboli:

Why do you think companies go overseas? To get away from unions, minimum wage, and frivolous lawsuits! *sigh*

Some of that is true, but most companies go over seas to get away from the double corporate tax.

Bleh, I couldn't explain it good enough so here is a blurb from Boortz

BoortzCorp, U.S. Since BoortzCorp is a U.S. corporation federal tax regulations will require BoortzCorp to pay federal corporate income taxes on every single penny it earns. It doesn't matter whether that money is earned in the U.S. or not. If BoortzCorp earns $15 Million in Belgium it will not only have to pay whatever taxes are due on those earnings in Belgium, but in the United States as well. Now the U.S. tax laws will allow a credit to BoortzCorp in the amount of the taxes paid to Belgium, but since U.S. corporate income taxes are generally higher than most other nations, there will be additional taxes due to Washington. In some enlightened foreign countries there are no corporate income taxes at all. In that case, the U.S. collects the full amount.
BoortzCorp Bermuda. The corporate management of BoortzCorp is getting a bit tired of paying income taxes to the feds on earnings of overseas subsidiaries. BoortzCorp could expand its business and hire additional people if the earnings could be reduced by lowering the tax burden. So BoortzCorp reincorporates in Bermuda. The home office stays in the U.S., as do all but about five employees. But now the tax laws are different. The BoortzCorp subsidiary operating in the United States will pay corporate income taxes to the U.S. government on earnings made in the U.S. The BoortzCorp operation in Belgium, however, will pay income taxes on earnings realized in Belgium, but will owe nothing to the U.S. government for those earnings. That will leave BoortzCorp with additional cash that can be used to hire additional people, expand the business, or pay dividends to shareholders, many of whom, by the way, live in the United States.