The Base Erosion And Profit Shifting Action Plan

period to complete each in-class quiz. Each quiz will be graded based on 50 points.

The organization strategic plan consists of addressing clinical quality, growth, and becoming a larger part of the community, and providing long term value. The annual report states the following strategic goals (Bon Secours, 2012):

In recent years, more than twenty major American companies have left the United States and moved overseas to take advantage of lower tax rates, taking with them jobs and investments (Allen, D). The recent surge of interest in United States corporate inversions has triggered calls for Congress to put an end to the practice. A corporate inversion is when an American company merges with a foreign business and moves the combined business’s headquarters to the foreign country. Inversions are a problem because they are a symptom of a broken tax system that is hurting the United States economy. Furthermore, with the strict laws concerning inversions, some companies opt to direct profits to their foreign subsidiaries to take advantage of lower

The main objective of many companies is to minimize their tax obligations. Jeffers (2014) discussed the reason of why companies adopt tax inversion strategies. The researcher indicated that the income maximization is a major reason of companies attempting to reduce their tax liability (pp. 100-101). Tax inversion strategies provide companies an advantage to lower income tax rate. Today, U.S. corporations renounce its U.S. citizenship and move to low-tax countries. Companies that reincorporate oversees are not obligated to pay U.S. taxes on earning income (p. 99). Many countries implement tax competition strategies to attract and retain businesses. Well-known companies, such as Exxon Mobil, Hewlett Packard, Tyco, General Electric, PepsiCo, etc. take benefits of tax shelter opportunities overseas (p. 102). Other benefits of the jurisdiction abroad are flexible banking laws and simplified litigation processes.

In response to the need, the Tax Reform Act of 1986 was enabled. The reform was intended to be revenue neutral, but broaden the tax base previously held. Congress had depressed marginal rates, and concurrently got rid of tax shelters, tax preferences, and other opportunities for tax avoidance. It now seems what worked as great solution in the past is not working now, “The Tax Reform Act of 1986 has not proved a stable outcome: Congress has since narrowed the tax base and raised income tax rates. Internationalization of the economy raises the question of whether corporate income taxes can be relied upon as a stable source of revenues. Moreover, the tax system is also under continual reexamination because federal deficits of $300–$400 billion a year are now commonplace…” (Greatz, 2007, p.

Virtually all citizens and politicians alike, agree that the current tax code is entirely too complex, yet nearly every year the system gets more complicated, not less. The reason is that simplicity almost always clashes with the other goals within the tax policy. Most people believe income taxes should be enforceable, fair, and beneficial to economic wealth, all while maintaining simplicity. But even those who agree on the necessity of these goals often disagree about the hierarchical importance of each. As a result, the tax policies usually represent a portion of each competing goal, leaving no room for simplicity. For example, most countries tailor tax liabilities to the characteristics of the individual taxpayer. That can make taxes more fair, but also more complex. Income must first be traced from a business to the

The last major overhaul of the U.S tax code took place over twenty-eight years ago as part of the Tax Reform Act of 1986. President Ronald Regan’s Treasury Department proposed a tax-neutral reform with the definitive duty of simplifying the overall code. However, the absence of any reform since then greatly reflects the United States current condition, in that “The United States provides a good example of an uncompetitive tax code” (Pomerleau & Lundeen, 2014). The following will examine the main components of the tax code that make a nations taxing system competitive. It will then identify two parts of the code, that when combined create a disadvantageous environment for any American business who competes internationally.

The last major reform of U.S. tax law took place in 1986. The complaints involved an individual tax rate of 39.6% and a corporate tax rate of 35%, which led to distortions due to loopholes, exploitation, and the increasing difficulty of national authorities in taxation. The complexity of transnational corporations in the global context account of the disorganization and transfer pricing of enterprises.

Successfully introducing new products or services into the market is vital to the long-term growth of a company (Kotler and Keller, 2009). All Eyez on Me is a men clothing store that sells clothing for the hip hop nation. As a new business it is important to know what the business is all about and what it hopes to achieve in the next five years for it to become successful. The store offers a variety of name brand clothing such as Maurice Malone, Rocka Wear, Bushi, Karl Kani, Phat Farm, Pelle-Pelle, etc. The products are casual name brand clothing that men love and enjoy wearing. All Eyez on Me “will explain the importance of the business

To obtain long term solutions it is critical that the American government reshapes the tax code and provides Americans a substantial amount of tax relief. The current tax code is too complicated, it needs to be simplified. The way the current tax code is organized it seems that it someone needs an advanced degree in order to effectively understand and complete it. Simplifying the tax code will be beneficial to the average citizen and the government. This country needs to effectively increase the economic developments within its boundaries. To allow substantial economic development this government is absolutely necessary that this country put an end to corporate inversion. The biggest factors that contribute to corporate inversion are the incredibly high tax rate of thirty five percent and the decision by the American government to force a tax on company’s income, regardless of their location. By lowering the corporate tax rate and allowing to America to transition from an international system to a more domestic one, corporate inversion will end which will add a enormous amount money back into the American economy. These long term solutions will give America permanent solutions to the horrible tax problems it faces

Americans may ponder the thought of struggling economy barely gaining momentum while corporations have witnessed some of the largest quarterly profits ever recorded. The driving force behind the extreme profits gained by many corporations is simply put as tax inversion. Tax inversion is nothing more than an American firm combining with a foreign firm in a country with beneficial and lucrative tax laws (Financial Times, 2014). The American headquarters will now be moved to the new foreign firm where they will enjoy the lower taxes and evade the taxation of the United States government (Financial Times, 2014). More and more American firms have been taking advantage of inversion while still being able to enjoy sales in the American market.

The recent introduction of the hybrid entities has shielded the foreign firms from paying their appropriate taxes through the shielding of the taxable income and through using the foreign tax amounts on the other incomes (Messina, 2015). In this regard, only minimal taxes are remitted from the revenue generated by the local firms. Besides, people tend to evade tax charged on dividends and interests by not giving honest reports pertaining to the revenue generated abroad. Furthermore, individuals evade the taxes through transferring their funds to foreign accounts. Fortunately, the IRS can address the issue of tax evasion by changing the existing tax laws to remove the deductions and other restrictions, for instance, the foreign tax credits. Besides, it is vital to impose restrictions to curb tax evasion at a personal level through the desired policies of better information reporting and tougher penalties for the

Domestically, corporate taxes are a significant expense to businesses, so much so that corporations pour massive resources toward acquiring the knowledge to take advantage of not only their local tax system, but also international ones, in order to preserve as much capital as possible. As businesses attempt to attain wealth, they mobilize towards lower-tax jurisdictions. Organizational planning is also affected, as uneven taxes on different types of business entities lead companies like Enron to form network webs of varying entities (Luna, LeAnn, and Murray 2008). Resource allocation to operating tax loopholes and allowances may be considered uneconomic, but is crucial for business survival. Domestic corporate tax rates are also inherently political; as each party has differing mandates towards tax revenue generation and allocation. Governments now must consider tax policy one of the major pieces to their platform. In Canada, the Conservative Party of Canada has stressed the importance of the corporate tax rate as a vital cog in maintaining the health of the economy. Over the last 4 years, the Conservative Party has decreased the net corporate tax rate by 2.5% with intention to lower it further to 15% effective January 1, 2012 (Canada Revenue Agency 2011).

The United States is in a recession; it has been facing some of the worse economic times since the Great Depression in the 1930’s. One option to fix the economy is to change the corporate tax rate. To lower it or to raise it, that is the question economists have been speculating. America's high corporate tax rate and worldwide system of taxation discourages U.S. companies from sending their foreign-source revenue home, which makes U.S. companies defenseless to foreign acquisition from the international opponents (Camp). Corporations and United States citizens have been fighting for a tax reform, which would hopefully help the American economy; either by lowering the corporate tax, or by raising the tax.

This is the Organization of Petroleum Exporting Countries. With the aim of coordinating the petroleum policies of the member states, the organization was founded in 1960. Member countries have been benefitting from the organization both economically and technically as the organization works on the foundation of a cartel that sets oil prices on a global scale. As such member states are cushioned against the fluctuating global oil prices. The organization is guided by the mission which is;