Sunday, May 10, 2009

Obama's Tax proposals may heat US companies in long term

After US President Obama said that he will change the taxation for corporates soon has triggered many reactions in US and worldwide.

Consequences of such a policy which has implications across various countries and sectors can be unimaginable. Its complexity and implications may be much larger than we are thinking it now.

Its also said that it may be so that it may make US companies not very competitive in future.

Some predictions / market sentiments / experts opinion is like this..
1) It may affect US based companies like Dell IBM HP etc
2) Currently these large US companies earn more than 50% of their revenue from operations outside US
3) Its beleived more to close loopholes of taxation system than ban on outsourcing
4) Currently US companies are not taxed for profits earned outside of US unless they bring this money back to US. Now the sentiment is to tax the companies on profits outside US. This will mean that the money will be taxed immediately, rather currently when these companies get money back on long term. Hence they will be paying in chunks and yearly.
Supposedly this may lead to $210 billion for US govt.

'The current proposal, as we understand, is to close corporate tax loopholes for US multinational corporations. We do not believe it has anything to do with IT outsourcing done by US corporations, - Infosys reaction

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