Why Do American Companies Leave America?

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• published: 04 Nov 2016
• views: 337410

America is the world's largest economy, and yet many American companies are moving jobs and factories overseas. Why? Find out in this short video. Donate today to PragerU: http://l.prageru.com/2eB2p0h This video is part of a collaborative business and economics project with Job Creators Network and Information Station. To learn more about JCN, visit www.jobcreatorsnetwork.com and www.informationstation.org. Download Pragerpedia on your iPhone or Android! Thousands of sources and facts at your fingertips. iPhone: http://l.prageru.com/2dlsnbG Android: http://l.prageru.com/2dlsS5e Join Prager United to get new swag every quarter, exclusive early access to our videos, and an annual TownHall phone call with Dennis Prager! http://l.prageru.com/2c9n6ys Join PragerU's text list to have these videos, free merchandise giveaways and breaking announcements sent directly to your phone! https://optin.mobiniti.com/prageru Do you shop on Amazon? Click https://smile.amazon.com and a percentage of every Amazon purchase will be donated to PragerU. Same great products. Same low price. Shopping made meaningful. VISIT PragerU! http://www.prageru.com FOLLOW us! PragerU is on Snapchat! Facebook: https://www.facebook.com/prageru Twitter: https://twitter.com/prageru Instagram: https://instagram.com/prageru/ JOIN PragerFORCE! For Students: http://l.prageru.com/2aozfkP Sponsor a Student: http://l.prageru.com/2aoz2ht JOIN our Educators Network! http://l.prageru.com/2aoz2y9 Script: Sometimes you hear in the news about a U.S. Company buying a foreign company and moving its headquarters overseas. Well, this can happen for many reasons. One of them is a tax inversion. But what are tax inversions, why are companies doing them and why should you care? Here’s the reason why. U.S. companies pay corporate tax rates of around 35 percent or more on their profits, while their foreign competitors pay much less in their countries. And if your company has locations or sells products in overseas, you get taxed on those profits in the foreign country and again when you bring that money back to the United States. This is called double taxation and your foreign competitors don’t have to pay it. This hurts your company’s ability to compete, grow and reinvest in new products and jobs. Hmmmm…now that doesn’t make sense. So, back to the tax inversion. If you’re a company based in the US and want to make sure you stay competitive with your foreign counterparts, and protect your company from foreign takeovers, what can you do? The current U.S. tax system allows you to buy a foreign company and use their headquarters as your own. That way you don’t have to pay the higher U.S. tax rates on foreign profits even though you still pay U.S. taxes on your profits in America. This move allows you to keep a lot more of your profits and invest in new factories, employees, and products. Look at it this way: Let’s say you lived in one city but commuted to another. If the rules were set-up so you were taxed by both cities on your income—essentially double taxation—you would probably consider moving to the city with the lower tax rates. It wouldn’t mean you were greedy, or disloyal—you would simply be working within the system of rules that exists. Now…that makes sense. So the next time you hear a politician complaining about American companies moving overseas, remember it was politicians who passed the laws that encourage companies to move away in the first place. If politicians would stop fighting with each other, lower corporate tax rates and end double taxation, U.S. companies could compete better and wouldn’t need to invert to protect jobs and their businesses.

Why Do American Companies Leave America?

• Report rights infringement
• published: 04 Nov 2016
• views: 337410

America is the world's largest economy, and yet many American companies are moving jobs and factories overseas. Why? Find out in this short video. Donate today to PragerU: http://l.prageru.com/2eB2p0h This video is part of a collaborative business and economics project with Job Creators Network and Information Station. To learn more about JCN, visit www.jobcreatorsnetwork.com and www.informationstation.org. Download Pragerpedia on your iPhone or Android! Thousands of sources and facts at your fingertips. iPhone: http://l.prageru.com/2dlsnbG Android: http://l.prageru.com/2dlsS5e Join Prager United to get new swag every quarter, exclusive early access to our videos, and an annual TownHall phone call with Dennis Prager! http://l.prageru.com/2c9n6ys Join PragerU's text list to have these videos, free merchandise giveaways and breaking announcements sent directly to your phone! https://optin.mobiniti.com/prageru Do you shop on Amazon? Click https://smile.amazon.com and a percentage of every Amazon purchase will be donated to PragerU. Same great products. Same low price. Shopping made meaningful. VISIT PragerU! http://www.prageru.com FOLLOW us! PragerU is on Snapchat! Facebook: https://www.facebook.com/prageru Twitter: https://twitter.com/prageru Instagram: https://instagram.com/prageru/ JOIN PragerFORCE! For Students: http://l.prageru.com/2aozfkP Sponsor a Student: http://l.prageru.com/2aoz2ht JOIN our Educators Network! http://l.prageru.com/2aoz2y9 Script: Sometimes you hear in the news about a U.S. Company buying a foreign company and moving its headquarters overseas. Well, this can happen for many reasons. One of them is a tax inversion. But what are tax inversions, why are companies doing them and why should you care? Here’s the reason why. U.S. companies pay corporate tax rates of around 35 percent or more on their profits, while their foreign competitors pay much less in their countries. And if your company has locations or sells products in overseas, you get taxed on those profits in the foreign country and again when you bring that money back to the United States. This is called double taxation and your foreign competitors don’t have to pay it. This hurts your company’s ability to compete, grow and reinvest in new products and jobs. Hmmmm…now that doesn’t make sense. So, back to the tax inversion. If you’re a company based in the US and want to make sure you stay competitive with your foreign counterparts, and protect your company from foreign takeovers, what can you do? The current U.S. tax system allows you to buy a foreign company and use their headquarters as your own. That way you don’t have to pay the higher U.S. tax rates on foreign profits even though you still pay U.S. taxes on your profits in America. This move allows you to keep a lot more of your profits and invest in new factories, employees, and products. Look at it this way: Let’s say you lived in one city but commuted to another. If the rules were set-up so you were taxed by both cities on your income—essentially double taxation—you would probably consider moving to the city with the lower tax rates. It wouldn’t mean you were greedy, or disloyal—you would simply be working within the system of rules that exists. Now…that makes sense. So the next time you hear a politician complaining about American companies moving overseas, remember it was politicians who passed the laws that encourage companies to move away in the first place. If politicians would stop fighting with each other, lower corporate tax rates and end double taxation, U.S. companies could compete better and wouldn’t need to invert to protect jobs and their businesses.