Autodesk: Whew!

Autodesk stood to have to pay a big tax bill on the hundreds of millions of dollars it parks overseas to avoid US taxes.  The Wall Street Journal reports:

The Obama administration has shelved a plan to raise more than $200 billion in new taxes on multinational companies following a blitz of complaints from businesses. A contingent of Silicon Valley chief executives, for example, traveled to Washington in late September to speak out against the proposal to change how the federal government taxes overseas profits.

The Obama idea was for the USA to double-tax the profits while still in the banks of other countries: a US tax of 35%, plus the local taxes. The positive outcome would be that US companies would more quickly bring the profits back into the USA. (Currently, the money is taxed only when it is transferred to the USA; in addition the money can be "borrowed" by the corporation for 3-6 months tax-free.)

But the Whew! is only temporary. The new tax could be implemented next year, and Autodesk's tax bill could amount to $245 million (by my guestimate).

Comments

[Bill Fane]

"The positive outcome would be that US companies would more quickly bring the profits back into the USA."

Positive outcome? Not for the foreign countries who are contributing the profit and are therefore having their wealth syphoned away. How about encouraging companies to invest their profits in the countries where they were earned?In the long run that would make the foreign countries wealthier and therefore would eventually return even greater profits for the company.

Henry Ford knew this; he paid his workers more than the going rate, so now they had money to spend in local businesses, and so now the local business owners could afford to come and buy a Model T.