Is repatriating cash to the US that is overseas “bad”? From whose perspective? Why do you think the author used the term “specter” in describing repatriation?
The new tax law reduces rates for corporations from 35% to 21%, yet many firms, especially banks, will be recording sizable losses in their 2017 4th quarters. Why?
If you were CFO of Intel, what would you do? What are all your options and how would you try to make a decision about your $10 billion in overseas cash?
If the switch to a territorial tax system from the current worldwide system goes through, would firms that have deemed foreign earnings as indefinitely reinvested need to accrue a tax liability on those nonrepatriated earnings? If so, what would be the effect on the financials and the effective tax rate (ETR)?
If you were the CEO of a MNC doing business in the U.K., how would you rank the factors in order of importance, including the corporate income tax rate, that you would consider in whether to continue to remain in the U.K.? What factors do you think Nissan considered?
Tim Cook at Apple says Apple will not repatriate overseas profits until the U.S. rate is “fair.” How could you see whether Apple accrued or did not accrue a liability for U.S. taxes on foreign earnings?
$2.4 trillion (TRILLION) of “indefinitely reinvested” profits of U.S. multinationals are overseas. Why? Is this a problem? If so, for whom? If so, what solutions would you propose? What is the effect on the effective tax rate of indefinitely reinvested profits?
If you were CEO of a U.S. firm, would you still try to do a tax inversion? What obstacles would you have to overcome? Or, would you spend more on lobbying to try to get the tax laws changed?
Apparently a large portion of BP’s settlement for the Gulf Oil spill is tax deductible. In your opinion, should it be tax deductible? Why or why not? Assuming the deduction will be taken in the future, what is the entry to recognize tax expense and the deferred tax asset? What is the effect on the effective tax rate on the nondeductible portion?
What is the distinction among the payments (that BP will pay for the Gulf oil spill) that determines whether they are tax deductible or not? For the nondeductible payments, what will be the effect on the effective tax rate (increase or decrease)?
What is your opinion about getting rid of corporate taxes altogether and just requiring shareholders to pay taxes on dividends and capital gains?
Can you think of other ways that tax policy drives corporate decisions, in addition to the decision to relocate HQ to overseas, such as Medtronic’s planned acquisition of Covidien?
If a firm has so much cash, why do they borrow more cash to pay a dividend to shareholders, or to buy back stock? Do you support a territorial tax system? Why or why not?
The Effective Tax Rate is measured as Tax Expense / Pre-tax Income. Is it more informative to measure this ratio using “Cash Taxes Paid” in the numerator? Why or why not? Where do firms report the amount of cash taxes paid?
Pfizer is highlighted as a firm that allegedly “dodges” tax by shifting profits overseas. How does it do this? Would not lowering the tax rate in the U.S. reduce the tendency toward this sort of practice? What other policy changes would you recommend? Given the human capital that is provided at these firms by employees and the financial capital that is provided by savers/investors/pension plans/etc., why is the statement made that corporations “aren’t human”?
Why do US firms have so much cash “stashed”? Why is so much of it overseas? Why do you think firms favor capex and dividends over acquisitions and share repurchases? If you were the CFO, what are some of the factors that you would consider in deciding what to do with the cash?
Taxes affect individuals’ behavior, as well as corporate behavior. If you were a politician, what would you do, if anything, to change the corporate tax policy in the U.S.? If you were the CFO for one of the firms in the article, what would you advise the government to do to change the corporate tax policy in the U.S.?
