Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
US Corporate Income Tax Policy Isn't That Bad
Author: Scarinci Hollenbeck, LLC
Date: June 18, 2015
Key Contacts
Back
Don’t Believe the Negative Hype Regarding US Corporate Income Tax Policy
The US corporate income tax policy is less stringent than its opponents contend, according to a recent New York Times opinion piece written by economic expert Josh Barro.
Some have claimed that the US Corporate Income Tax Policy levies a tax on all the profits that an America-based company earns throughout the world.
These policies have been at the center of much debate, as many lawmakers have floated their corporate income tax proposals over the last several months. President Barack Obama – and also republican lawmakers – have both suggested more territorial policies, meaning that corporations only pay taxes on their profits in the jurisdictions where those earnings are generated.
Currently, the U.S. uses a system whereby companies incorporated in the United States can generate profits from an active business overseas, paying taxes on these earnings before transferring or repatriating them back to the U.S. and paying taxes once again. While many object to these corporate tax systems, the author notes that they always incorporate some essence of territoriality. Income from passive sources known as Subpart F income, is subject to immediate inclusion in income. Foreign corporations are subject to taxation on the income earned in the United States.
Barro emphasized that when companies based in the U.S. pay taxes for active income generated overseas, they receive credits, and they do not have to pay any domestic earnings on products until they bring them back to the U.S. It is also worth noting that many companies based in the world’s largest economy benefit from foreign tax credits. In some instances, America-based companies can generate robust profits and pay little or no taxes in their home country if they properly manage their foreign income and tax credit position.
Other nations use differing policies, for example, levy a minimum tax on a company’s worldwide profits, tax passive foreign income without exception and limit the freedom companies have to allocate their profits across different countries by rigid transfer pricing, the author emphasized.
Because of all these considerations, the corporate income tax policy used by the U.S. and other large economies – namely its major trading partners – might not be as different as some would think
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
Author: Paul Grossman
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
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.