Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 212983  
Subject: Re: No tree grows to the sky Date: 11/17/2012 1:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
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.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Should You Be an Index Investor?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement