To protect their bottom line, companies have to do a lot of math. One of the factors they consider when pondering an acquisition, relocation or a home for their intellectual property (IP) is the ultimate tax bite.
If a company is based in the U.S., it could lose at least 10 cents more on every dollar than it would elsewhere, several corporate executives testified before a Senate subcommittee hearing Tuesday. The high U.S. corporate tax rate, coupled with its worldwide taxation structure, is adding up to a lot of relocations and foreign takeovers of U.S. companies. The country's tax code also puts American firms at a disadvantage when they're bidding against foreign competitors for an acquisition target.
The result is the loss of IP, profits and jobs but not the debt. The tax code incentivizes keeping all that in the U.S.
The hearing of the Senate Permanent Subcommittee on Investigations was billed as the first step toward