http://whiskeyandgunpowder.com/inflating-the-substitution-effect/ Whiskey and Gunpowder features articles on gold, oil, currencies, emerging markets, energy, and more. Sun, 12 Feb 2012 15:22:51 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://whiskeyandgunpowder.com/inflating-the-substitution-effect/comment-page-1/#comment-9225 theBuckWheat Sat, 13 Nov 2010 02:49:43 +0000 http://agoratestsite.com/wordpresswhiskey/?p=539#comment-9225 One reason that American corporations build facilities outside the US to serve their non-US customers can be found in the US Tax Code. Profits earned outside of the US are taxed by the US government if the money is brought back to the US. If it remains in the foreign subsidiary it can be spent by that corporation and taxed at the presumably lower local rate. While this could be fixed at the stroke of the pen by Congress, it seems they would rather have the tax that corporations can avoid paying rather than have the money come back to the US at a lower rate of tax. I wonder how many tens of thousands of jobs this ideological hubris has cost us? One reason that American corporations build facilities outside the US to serve their non-US customers can be found in the US Tax Code. Profits earned outside of the US are taxed by the US government if the money is brought back to the US. If it remains in the foreign subsidiary it can be spent by that corporation and taxed at the presumably lower local rate. While this could be fixed at the stroke of the pen by Congress, it seems they would rather have the tax that corporations can avoid paying rather than have the money come back to the US at a lower rate of tax. I wonder how many tens of thousands of jobs this ideological hubris has cost us?

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