Why wouldn't they be required to book a reserve for repatriation tax liability? It is a contingent liability that is reasonably easy to calculate. If they don't have to book it, shouldn't they estimate and disclose the liability in a foot note.Management has the flexibility to designate foreign earnings as "indefinitely reinvested". If they do so, no tax is due to the US government until the funds are repatriated and no deferred tax liability is carried on the balance sheet. It would be great to either always require this deferred tax liability or at least force disclosure in footnotes. Currently companies aren't even required to disclose how much cash is held in foreign subsidiaries although many companies such as Apple and Microsoft voluntarily disclose the dollar amount (but not the tax hit if the funds were hypothetically repatriated on the balance sheet date).A better idea could involve taxing corporate worldwide income (just as individuals worldwide income is taxed) in exchange for lowering the corporate tax rate significantly. I don't know what a revenue neutral rate would be but it would be much better than 35%. Supposedly both parties want to see a lower corporate tax rate so this could be part of a "grand bargain". To the extent that investment income is double taxed at the individual level upon payment of dividends or realization of capital gains a cut in the marginal corporate tax rate could offset some if not all of the negative impact of personal income tax rates rising on investment income. But this probably makes too much sense for our political system.
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