While many reliable sources in Washington are saying that the odds of either President Obama’s corporate tax reform bill or Republican Camp’s bill getting passed this year are slim to none, some states aren’t waiting to conduct their own reform..
While many reliable sources in Washington are saying that the odds of either President Obama’s corporate tax reform bill or Republican Camp’s bill getting passed this year are slim to none, some states aren’t waiting to conduct their own reform. According to Pew Reports, a number of states are targeting offshore “tax havens” in new litigation that will allow them to recoup the more than $20 billion that they lose to the technique each year.
Photo by Anastasia Taioglou on Unsplash
By shifting income to offshore subsidiaries in places like the Cayman Islands, Bermuda and a number of other tax havens, companies are able to avoid paying both state taxes and federal taxes in the U.S., where the marginal rate is significantly higher, according to the news source. While technically these companies are required to pay U.S. taxes when they repatriate the money, there is currently no limit on how long they can defer repatriation. This may serve as a disincentive for investing in U.S. labor, construction or goods, because the money can only be spent abroad.
Maine is now looking at litigation that will mirror tax law enacted in Montana in 2004, according to Pew Reports. The bill being considered would name 38 known tax havens and attempt to put a stop to incentives to move money to them.
Robert Pozen, a reporter with The Wall Street Journal, has a different plan for recovering the tax on the estimated $2 trillion held abroad. He suggests a transitional tax rate on foreign profits of 12 percent, which would lead into a foreign “competitiveness” tax of 17 percent, which would only come into effect after local international taxes. For example, if local taxes amounted to 15 percent, for example, the tax owed to the U.S. would be only 2 percent.
There are a number of ideas present in Washington, D.C., and in state governments as to what should be done about the corporate tax problem, but it is unlikely that the U.S. will see a change any time soon.
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
