Well, you can’t claim President Obama is a tax cutter any longer.
Per Paul Caron, the President signed a bill into law yesterday that will increase taxes on corporations doing business overseas:
President Obama yesterday signed H.R. 1586, which creates a $10 billion fund to prevent teacher layoffs and provide a temporary increase in the Federal Medical Assistance Percentage, funded with corporate international tax changes.
Here’s a list of the tax revenue offsets:
- Rules to Prevent Splitting Foreign Tax Credits from the Income to Which They Relate (sec. 211 of the bill and new sec. 909 of the Code)
- Denial of Foreign Tax Credit with Respect to Foreign Income Not Subject to U.S. Taxation by Reason of Covered Asset Acquisitions (sec. 212 of the bill and new sec. 901(m) of the Code)
- Separate Application of Foreign Tax Credit Limitation, etc., to Items Resourced Under Treaties (sec. 213 of the bill and sec. 904(d) of the Code)
- Limitation on the Amount of Foreign Taxes Deemed Paid with Respect to Section 956 Inclusions (sec. 214 of the bill and sec. 960 of the Code)
- Special Rule with Respect to Certain Redemptions by Foreign Subsidiaries (sec. 215 of the bill and sec. 304(b) of the Code)
- Modification of Affiliation Rules for Purposes of Rules Allocating Interest Expense (sec. 216 of the bill and sec. 864 of the Code)
- Termination of Special Rules for Interest and Dividends Received from Persons Meeting the 80-Percent Foreign Business Requirements (sec. 217 of the bill and secs. 861(a)(1)(A) and 871(i) of the Code)
- Limitation on Extension of Statute of Limitations for Failure to Notify Secretary of Certain Foreign Transfers (sec. 218 of the bill and sec. 6501(c) of the Code)
- Elimination of Advance Refundability of Earned Income Tax Credit (sec. 219 of the bill and secs. 32(g), 3507, and 6051(a) of the Code)
These tax law changes are far too complex for the average taxpayer to understand, but they are still tax increases and will increase the cost of doing business for many corporations.
It remains to be seen whether that is a good or bad thing for the economy.