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Post by ptsdthor on Jul 11, 2020 11:37:06 GMT -8
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Post by Al-O-Meter on Jul 11, 2020 16:30:20 GMT -8
I don’t think Joe Biden could pull that off as it is built into the DNA of the US Constitution, but just for fun it would likely not mean much unless those average IRA or 401K investors don’t change the funds their money is invested in and those fund don’t adjust their holdings. Here is what I mean by that and details on what would change: When the corporate tax rate was higher our multinational corporations were setting up divisions in tax havens. Apple, Google, Microsoft, General Electric and most of the big guys you can think of all did this. The division is set up like an independent entity. It buys from the factory division, marks up the cost of the product, and sells it to the American division at a high price. The American division sells the product without making a profit because the sale price is essentially the same as its cost it paid for the product from the tax haven division. The tax haven division makes all the profit and pays the tax on that profit to the country the tax haven division is located it. The American division pays no taxes because it didn’t make any profit. I’ve over simplified a lot but that is essentially how it works. The American multi-national corporation keeps its headquarters in the US so that it can have access to the American capital market, i.e. the stock market. If Joe Biden were to do what he’s threatening, the American multi-nationals would just move their headquarters overseas and list their shares on foreign exchanges as a service to their shareholders, to keep their shareholder’s money safe. The mutual funds that IRA and 401K investors invest in would simply buy shares on the foreign exchanges. The huge losers would be Federal Tax Revenue and the American jobs market. The race overseas and to Mexico that happened to factories in the late 20th century would be repeated except this time it would be the corporate headquarters jobs. All that would be left here is the product distribution warehouses. |
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Post by AztecWilliam on Jul 14, 2020 14:43:22 GMT -8
I think it's a step toward making industry de-facto socialized, while remaining nominally free-enterprise. That way, if a company tanks because of stupid politically mandated decisions, those who favor a collectivist economy can blame the figure-heads who sit in the offices of the upper management.
AzWm
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