Essay On The Corporate Tax

Essay On The Corporate Tax
Was the Corporate Tax Cut Necessary?
The recent passage of tax reform by the US Senate raises the spectre of the statutory corporate tax
rate falling to 20% from 35%. Republicans justify the measure by claiming that the statutory rate is
too high and, furthermore, they assert that lowering its level will induce US corporations to feel less
inclined to use overseas tax shelters. The reality is, however, that corporations seldom pay the
statutory rate. Since the beginning of the post–Great Recession recovery, the effective rate being
paid by US companies has been significantly lower than the statutory rate. According to the National
Income & Product Accounts (NIPA), the effective tax rate paid by US corporations during Q3 was
just 21% ... Show more content on Helpwriting.net ...
Meanwhile, the assets of unincorporated business can be easily moved between business and
personal accounts with little reporting requirement, while tax liabilities are not required to be
separated between the owner and the business. While commentators have made a major point about
the cut the corporate tax rate, the critical point is arguably the proposed changes to individual tax
rates, particularly for the owners of unincorporated business.
Under the Senate version of 2017 tax reform, individual tax cuts are not permanent. The lower rates
will be repealed by 2025, while contrastingly the House version envisages the individual tax cuts to
be permanent. Meanwhile, in the interim, lower rates would be offset by the potential reduction in
long–standing deductions, such as state and local government taxes and limiting mortgage interest
and property tax relief. Meanwhile, the exact timing of the implementation of the lower individual
tax rates remains unclear. The size of proprietor's income, which will not be enjoying the envisaged
15 percentage point decline in the statutory corporate tax rate, should not be taken lightly. In Q3,
according to the NIPA data, proprietor's income was 63% of total pre–tax corporate profits.
2017 Tax Reform: Very Different to 1986
Comparisons were made between President Trump's arrival and President Reagan, who presided
over the passage of the 1986 tax reform measures. While there
... Get more on HelpWriting.net ...

Corporate Tax And Corporate Income Tax
Introduction I believe that there should be corporate income tax, as it acts as a "user fee" for the
"special privileges" (Rosen, Ch 19) corporations receive. The corporate income tax is a separate tax
on corporate income, in which varies in a bracket between ten percent and thirty five percent. The
effective corporate income tax rate is estimated at thirty two percent, and eighteen percent for non–
corporations. Workers compensation, labor expenses, interest payments, and depreciation are tax
deductible from taxable income. Since corporations sell stock to stockholders, those stockholders
purchased a certain percentage of the corporation. In turn, purchasing a portion of the corporate
liability. If a stockholder accumulates income within the corporation in which he holds stock shares,
he reduces his tax liability. Although the shareholder's additional income would eventually be taxed,
his stock will grow at the before–tax rate of interest. This benefits the corporation and the
shareholders, as neither party holds the entire liability, nor do the shareholders pay debt if the
corporation is not generating profit. Corporate income tax also preserves the integrity of personal
income tax. I believe that there should be corporate income tax, as the lack–there–of could create
"potential opportunities for personal tax avoidance" (Rosen, Ch 19).
Corporate Income Tax Incidence The corporate income tax incidence is dependent on whether the
perspective is from the short, long, or

Businesses and Proprietorship
Businesses are started every day, and each one is different in its own special way, but no matter what
type of business it is, a sole proprietorship, a general or limited partnership, a C or S corporation, or
a limited liability it will still be affected in some way by seven basic characteristics. The
characteristics of business; liability, income tax, longevity or continuity, control, profit retention,
location, and convenience or burden. In this paper a description of each business type and how they
are affected by the seven characteristics of business will be given, showing the clear advantage and
disadvantages of each type of business.
Sole proprietorship
A sole proprietorship is a business that has no legal separate existence from its owner.
The characteristics that are the greatest advantages to this type of business are its freedoms. A sole
proprietorship has complete control and decision–making power over the business. There are no
corporate tax payments and profits are not shared; however income and losses are taxed on the
individual's personal income tax return.
And this brings me to the disadvantages of owning a sole proprietorship. Liability is the biggest; it
falls solely on the owner of the business. In the event that penalties or debts have to be paid,
payments come from the personal assets of the owner. The burdens that come with maintaining the
business and the standards of it fall on the owner despite the number of employees. The success of
the

Essay Lower Corporate Tax
A Case for lower Corporate Tax
Submitted by Student –201204997 on 11th of march 2013
Executive Summary
Policy Makers in the United Kingdom may as well take notice and acknowledge that lower
corporate tax can give essential profits to business competiveness without fundamentally hurting the
medium–term budget viewpoint.
Several countries lately have reduced or plan to reduce their corporate tax rates in order to stimulate
investment, create jobs and promote faster economic growth. This includes the Ireland where the
rate of Corporation Tax has been kept at 12%.Recently published report of Northern Ireland (NI)
Economic Strategy, identified lowering of corporate tax as the single measure that might have the
most ... Show more content on Helpwriting.net ...
Studies by Economist Lee and Gordon(2004) found viewed the connection between corporate tax
rates and economic growth for 70 nations over a 27–year period they discovered that statutory
corporate charge rates are fundamentally adversely related with cross–sectional distinctions in
normal economic development rates and that reducing the corporate duty rate by 10 percent can
deliver a additional growth rate of 1.1%
Studies such as these provide strong evidence that lower corporate taxes do lead to long term
economic growth and by having high rates we retard the nation growth potential.
Competiveness
The Canadian legislature has set an unequivocal objective of having a lowest corporate tax in the
Group of Seven (G7) nations on January 1st, Canada brought down its corporate tax rate from 18
percent to 16.5 percent. the rate will eventually decrease to 15 percent. The Japanese administration
also affirmed corporate tax deduction by 5 percent with a specific end goal to increase local
investment and create jobs through improving Japanese firms worldwide competiveness and
improving business environment. Lee and Gordon (2004) argue that the elevated sticker value of the
nation high corporate charge rate not just makes the its economy less competitive all around, but
also it makes its business organizations less aggressive competitive they argue lower corporate tax
rates

Corporate Tax in the United States
Question 1 1 out of 1 points Schedule M–2 is used to reconcile unappropriated retained earnings at
the beginning of the year with unappropriated retained earnings at the end of the year. Answer
Selected Answer: True Correct Answer: True Question 2 1 out of 1 points For a corporation in 2012,
the domestic production activities deduction is equal to 9% of the higher of (1) qualified production
activities income or (2) taxable income. However, the deduction cannot exceed 50% of the W–2
wages related to qualified production activities income. Answer Selected Answer: False Correct
Answer: False Response Feedback: For a corporation in 2012, the domestic production activities
deduction is equal to ... Show more content on Helpwriting.net ...
Gold Corporation, a personal service corporation (PSC), had gross receipts of $4 million in 2009, $7
million in 2010, and $5 million in 2011. Which of the corporations will be allowed to use the cash
method of accounting in 2012? Answer Selected Answer: Both Copper Corporation and Gold
Corporation. Correct Answer: Both Copper Corporation and Gold Corporation. Response Feedback:
Copper Corporation can use the cash receipts method because it had average annual gross receipts
of $5 million or less ($14 million ÷ 3 = $4.67 million) during the three preceding years. Gold
Corporation, a PSC, may use the cash method without regard to its gross receipts. Question 11 1 out
of 1 points In 2012, Bluebird Corporation had net income from operations of $75,000. Further,
Bluebird recognized a long–term capital loss of $30,000, and a short–term capital gain of $10,000.
Which of the following statements is correct? Answer Selected Answer: Bluebird Corporation will
have taxable income in 2012 of $75,000 and will have a net capital loss of $20,000 that can be
carried back 3 years and forward 5 years. Correct Answer: Bluebird Corporation will have taxable
income in 2012 of $75,000 and will have a net capital loss of $20,000 that can be carried back 3
years and forward 5 years. Response Feedback: The capital loss will offset the $10,000 capital gain.

Obama's Corporate Tax Reform Proposals
Obama's corporate tax reform proposals Introduction: There has been criticism on corporate tax ever
since it was introduced. One argument advanced that shows the burden of corporate tax is that had
Bill Gates in 1975 opened the Microsoft Corporation out of the US, say in Bahamas, the company
would have been richer. In fact Mr. Gates then went and did just that. The problem is that any
company that does business from the US, either within it or transnational has to be taxed of all
income in the US but earning outside is considered a deferred income. Thus the untaxed money
outside is used for further investment. (Shaviro, 2011) The corporate tax is the curse for economic
growth. According to the former Presidential adviser Boskin, President Obama should look up
corporate income tax. This suggestion was put forth in 2010. At that time the U.S. had the second–
highest corporate income tax rate of any advanced economy. On the other hand the countries like
Germany and Canada reduced their corporate tax rate, rendering American companies in poor
position globally. (Boskin, 2010) Though the deductions for interest and other features helped to
reduce tax, corporate tax sees to it that there is no investment and the capital has become
internationally mobile. Again the taxes along with corporate tax suffer a second tax as the dividends
are taxed. It was shown in 2010 that the capital from the US is moving out and in future the
corporate tax will cause the workers too bear the

Corporate Tax Case Study
The Canadian private corporate tax rate is lower than the personal income tax rate.1,2 The intention
for this lower tax rate is because the government recognizes the investment risks involved in
operating a business.3 Also, lower tax rates incentivize business owners to reinvest in their own
business which will promote a stronger economy.3 However, the issue with lower corporation tax
rates is that high income individuals can use loopholes in the tax system and incorporate to pay
significantly lower taxes than other non–business individuals such as the middle class causing tax
inequity.4 The federal government is proposing to change the current private corporate tax codes
which will prevent tax loopholes involving income sprinkling, ... Show more content on
Helpwriting.net ...
They believe that tax rate should be proportional to one's income to ensure equity.8 However, as an
employee, salaried community pharmacists have interests surrounding job security and workload.
Salaried community pharmacists work for independent, franchised or banner pharmacies where
owners often incorporate at 78%.9 As a result, any changes to the corporate tax code can indirectly
affect the salaried community pharmacists. If the changes negatively impact the pharmacy owners,
salaried pharmacists may have a reduction in income due to removal of overlapping pharmacist
hours and job availability.10 Also, the changes may lead to cut back of pharmacy technician hours
which will increase the workload of the salaried pharmacists. Overall, salaried community
pharmacists want a fair tax system based on proportion of income but at the same time, changes to
the tax code should avoid negative impacts on their job security and workload.
For the Department of Finance Canada, it perceives the problem as a gap in the system surrounding
private corporate tax resulting in loopholes and advantages through tax planning despite the original
intention of lower private corporation tax is to act as an incentive for investment and expansion of
business.5 The Department of Finance Canada has financial, social and political interests. First, by
closing the loopholes, there will be an increased tax revenue for the federal government.11
Furthermore,

Should Congress vote to lower the corporate tax rate in the United States? Yes argument.
It is an undisputed fact that the United States has one of the highest corporate tax rates of
Organization of Economic Cooperation and Development (OECD) countries. As a result many
American multinationals resort to tax inversions or other methods to try to reduce their tax rate.
Consider Apple, which has funnelled profits through Ireland for years rather than repatriate those
profits to the United States and pay America's corporate tax rate. Apple even accesses the American
debt market to pay shareholder dividends rather than bring profits home to do it. This tax avoidance
is very costly for the government, they must resolve this issue in order to ... Show more content on
Helpwriting.net ...
As long as the U.S. rate remains well above its competitors, businesses will have an incentive to
locate new facilities in foreign locations. The jobs that come with those new investments will
continue to go to nations with more competitive tax rates.
Congress must observe the basic economic theory of the Laffer Curve in order to determine the
optimal policy agenda. In economic theory, the Laffer Curve2 suggests that if the tax rate is too high
(as is currently the case in the USA)– then a cut in tax rates will actually boost the amount of
revenue raised, due to a reduction in both evasion and avoidance schemes. Furthermore, reducing
corporation tax has the potential to reverse the outflow of corporate head office functions, and in
doing so can substantially added to overall employment, output, income tax, national insurance and
other tax receipts. Essentially, lower tax rates are helping to drive a higher overall tax take.
Perhaps the most compelling argument, however, is the benefit this change will have the majority of
society. Whilst corporations are of course important to drive the economy, we must not simply line
the pockets of wealthy shareholders but instead ensure that all American citizens are given a better
standard of living, which this change can provide. High corporate taxes hurt workers in the form of
smaller paychecks and worker incomes rise sharply when corporate rates fall. As recently as this
October President

Corporate Tax Rate
Corporate Taxation: Reducing the Canadian Corporate Rate
Altering the rate of corporate taxation is a vital tool for federal monetary policy when adjusting to
the constantly changing local and global economy. The global recession of 2008 has illuminated the
political and economic significance of changing the rate of corporate tax in Canada, and has held its
effects under great scrutiny. Those that argue for a greater tax burden be placed on the wealthiest
businesses demand government intervention, reasoning that increasing tax revenue can decrease the
federal deficit and re–allocate money to vital lesser income groups and communities. The opposition
contends that the tax revenue gained will ultimately be lost in under–performing ... Show more
content on Helpwriting.net ...
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 Liberal Party and the New Democratic Party (NDP) advocate a Keynesian–welfare

The Company : A Sole Proprietorship
Paula Moraru's Submission for LIT1 TASK1 PART A SOLE PROPRIETORSHIP: It is an
unincorporated business with one owner who pays personal income tax on profits from the business.
With little government regulation, they are the simplest business to set up or take apart, making
them popular among individual self contractors or business owners. The benefit of the sole
proprietorship is the tax advantage. The disadvantage of a sole proprietorship is obtaining capital
funding. Liability: Owner is liable for 100% of debts, taxes and liabilities. Income Taxes: As a sole
proprietor you must report all business income or losses. The business itself is not taxed separately.
Longevity: The sole proprietorship by law will terminate upon the death ... Show more content on
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Income Taxes: The general partnership does not pay income taxes directly to the IRS, rather the
partnerships revenue and expenses are included by the partners on their income tax returns. Each
partner 's share of profits and losses is usually set out in a written partnership agreement. Longevity:
The death or withdrawal of one of the partners dissolves the partnership. The original partnership is
dissolved and a new partnership is created to carry on the enterprise. Control: The partners have
equal rights and authority to participate in managing the business. Each general partner has an equal
right to participate in the management and control of the business. Profit Retention: All profits go
directly to the partners. The amount of each partner receives will be determined by the amount each
partner has invested in the company. Expansion: To conduct business in a state, a general
partnership needs to locally register an assumed business name and obtain any specialty licenses
needed. Compliance: Unlike corporations, general partnerships are not required to hold annual
meetings of the owners, issue partnership interest, and keep personal asset separate from business
assets. LIMITED PARTNERSHIP: Two or more partners united to conduct a business jointly, and in
which one or more of the partners is liable only to the extent of the amount of money that partner
has invested. Limited partners do not receive dividends, but enjoy direct access to

Donald Trump Corporate Tax Case
One thing that Donald Trump would like to do is eliminate the corporate tax. Right now it is 35% in
America, while it's only 25% in China. He says that eliminating this would create millions of jobs.
There has been proof of jobs being created in the past by lowering the income tax rate, like in 1987–
1991, the unemployement rate was 5.9%, compared to 1981–1986, which was before the corporate
tax was reduced, unemployement was 8.9%. But there is also some proof against this as well, in
1951, corporate tax went from 42% to 50%, and in 1969, when it peaked at about 53%, the
unemployment rate went from 3.3% to 3.5%. And from 1986 to 2011, when corporate tax rate
declined from 46% to 35%, the unemployment rate went from 7% to 8.9%. Obviously this ... Show
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When asked about protests around the country to raise the minimum wage to 15 dollars, which
equates to about $31,000 per year, he said, "with taxes too high, wages too high, we're not going to
be able to compete against the world. I hate to say it, but we have to leave it the way it is. People
have to go out, they have to work really hard and have to get into that upper stratosphere". Those
who are for a raised minimum wage state that currently it isn't enough to live on, and that most
people who do earn minimum wage don't even work for 35 hours a week. They also argue that it
could act as a stimulus when low–income houses earn more money, then they are likely to spend it,
which would put more money into the economy. The American Economic Policy Institute said "By
increasing workers' take–home pay, families gain both financial security and an increased ability to
purchase goods and services, thus creating jobs for other Americans". But those who are against it
argue that studies have shown that increasing the minimum wage does not decrease poverty. They
also argue that it would put pressure on small business owners, causing them to hire fewer workers,
and also causing the unemployment rate to increase even more.
If Trump does keep the minimum wage where it's at, then he will save a lot of jobs, which is one of
the things he'll try to do if he's elected. The parties in favor of this would be the one who work
minimum wage jobs, and also those who would like to see the unemployment rate not be as

Corporate Tax Essay
"Republicans Propose Deep Cuts In Individual And Corporate Tax Rates"
Morning Edition with Mary Kelly
This article reports the dialog of the conversations between Ms. Kelly and Republican
Representative Dave Schweikert on the tax plan by the Trump administration. Democrats believe
this plan will not be beneficial to the everyday American and instead benefit the wealthy, which is
the opposite of Trumps said goal. Representative Schweikert worked on the tax plan and insist that
the math does not add up with what the democrats are saying. He is also very focused on the idea of
simplicity with this legislation (so that Trump may be able to actually understand "his" proposals?).
With this plan they republicans are aiming for an economic ... Show more content on
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goods because of the high exchange rate. Overall, cutting taxes will not be beneficial to the U.S.
economy as a whole. Consumers will be able to spend more, but industries will suffer as the budget
balance continues to grow as a deficit.
"GDP GRowth Bumped Up to 3.1 Percent in Second Quarter."
Andrew Soergel
The latest report from the Bureau of Economic Analysis shows positive growth in the U.S. economy.
This year's GDP growth rate began as a measly 1.2% but by the second quarter has grown to 3.1%
(Soergel, 2017). This growth can be attributed to the increase in personal consumption expenditures,
the surge in private investments in equipment, and export growth reaching its highest point in almost
four years (Soergel, 2017). However, this is not likely to be a recurring trend in the next quarter due
to the recent hurricane damage. Trump will most likely place this blame on Puerto Rico as they have
"thrown our budge a little out of wack" but none the less he is not shying away from revelling in the
economic growth. While many believe the hurricane will impact GDP growth negatively in the next
quarter the FED's potential to increase the interest rate is still a strong possibility.
To begin relating the article to the information taught in class I will analyze the formulas attributing
to GDP and forecast what may occur due to increased interest rate based on basic macroeconomic
methods. The equation for GDP is Y=C+I+G+NX, G is

Corporate Tax
LO1 – Corporate Taxable Income Formula * Corps. compute gross income as do other types of
business entities * Are allowed to deduct ordinary and necessary business expenditures * Don't
itemize deductions (No need for standard deductions) * No personal or dependency exemptions *
Exist to generate income through business activities * Nearly all corporate expenditures create either
current or future tax deductions * Corporate taxable income formula is relatively straight forward *
Accounting Periods and Methods * Corporations measure their taxable income over a tax year and
that their tax year must be the same as their financial accounting year * Generally elect their tax year
when they file their first ... Show more content on Helpwriting.net ...
However, they are not allowed to deduct federal income tax expense for tax purposes. * Common
Temporary Book–Tax Differences – caused by difference in accounting methods * Depreciation
expense (Favorable) – Difference between depreciation expense * Bad debt expense (Unfavorable)
– direct write–off method for tax purposes, allowance method for book purposes * Unearned rent
revenue (Unfavorable) – rent revenue is taxable on receipt, but recognized when earned for book
purposes. * Deferred compensation (unfavorable) – deductible when accrued for book purposes, but
deductible when paid for tax purposes if accrued but not paid for 2.5 months after year–end. Also,
accrued compensation to shareholders owning more than 50% of the corporation is not deductible
until paid. * Organizational expenses and start–up costs (Unfavorable) immediately deducted for
book purposes but capitalized and amortized for tax purposes (limited immediate expensing allowed
for tax). * Warranty expense and other estimated expenses (Unfavorable) – estimated expenses
deducted for book purposes, but actual expenses deducted for tax purposes * UNICAP (S 263A)
(Unfavorable) – certain expenditures deducted for book purposes, but capitalized to inventory for
tax purposes. Difference reverses when inventory is

Why Ireland Has Attracted Inward Foreign Direct Investment...
Why Ireland has Attracted Inward Foreign Direct Investment Ireland has been know to be a hugely
attractive for FDI, especially during the 1990s. While Ireland hasn't been able to compete with
countries like the United States in the amount of FDI it attracts, "relative to the size of the economy"
Ireland has attracted very high levels of inward FDI (Bailey and Lenihan, 2015). In particular,
Ireland has attracted significant United States FDI (Kelley, Glenn, & O'Brien, 2007, p. 2; Rios–
Morales & Brennan, 2007). "In 2009, in 64% of FDI in Ireland was sourced from the US and 28%
from Europe" (Department of Enterprise, Trade & Innovation). Furthermore, a report by the
Department of Jobs, Enterprise, and Innovation (DJEI) stated that, in 2014, "89% [of Ireland's
exports] came from foreign–owned firms" (2016). Overall, FDI is an important part of Ireland's
economy (DJEI, 2010). But why has Ireland attracted so much to foreign investment? Ireland's
success in attracting FDI has been based on a combination of interconnected factors, most notably
their FDI promotional strategy, investment in education, membership in the European Union, and
low corporate tax rate, that have helped to develop a good investment climate. One way, countries
attract inward FDI is through organizations that work actively promote foreign investment, also
known as investment promotion agencies (IPAs) (World Bank, 2005). IPAs can help countries
develop strategies to improve their investment climate (World

India 's Foreign Corporate Tax Rate
Abstract
At the conclusion of this report, I will try to show whether there is a relationship between India's
Foreign Corporate Tax Rate and India's Foreign Direct Investment (FDI). Through my research, we
see that India's foreign corporate tax rate affects its FDI negatively. The time period we will be
looking at will be from 1997–2013, due to the limited data available. Furthermore, I will explore
some policy improvements which may increase FDI in India.
1. Background
FDI is defined as cross–border investment by a resident entity in one economy with the objective of
obtaining a lasting interest in an enterprise resident in another economy. The lasting interest implies
the existence of a long–term relationship between the direct investor and the enterprise and a
significant degree of influence by the direct investor on the management of the enterprise.
Ownership of at least 10% of the voting power, representing the influence by the investor, is the
basic criterion used. (OECD Factbook 2013: Economic, Environmental and Social Statistics)
Foreign direct investments were prohibited in India prior to 1991. Liberalization was introduced in
1991 which allowed for FDI. Defense, petroleum & gas, banking, airline, telecom, single brand
retail, and multi–brand retail are fields investors can enter after obtaining approval. Below we see
the investment caps for each industry (EY). The title of this report is "FDI by FDI", which was
phrased by the new prime minister of India, Mr.

Corporate Tax Rate In America
1. One of the major issues we are facing in the US economy is how much we should charge in
regards to the corporate tax rate. Corporate tax rate is imposed by the government and determines
how much a corporate business will pay in taxes at the end of the year. Trump plans on decreasing
the corporate tax rate from 35% to 15%. Out of the 34 countries in the OECD, America ranks first
with a 39.1 percent corporate tax rate, compared to an OECD average of 24.1 percent. Along with
trump, I think that we should reconsider the corporate tax rate. If we were to lower the rate than
companies would have more money to spend and put back into our economy. Although I agree with
Trump, there are several factors that affect this decision and there are many ... Show more content
on Helpwriting.net ...
The fiscal policy that I suggest we use to address the problem is graduated corporate income. We
should not determine the corporate tax rate as one concrete number. We should decide the rate based
on how big the company is. The policy will state that the first $50,000 of a corporation's profit is
taxed at a 15% and will cap out at 35% for companies that make more than $335,000. Using this
policy will make it so more small businesses will grow because they will not be taxed as much as a
large company that can actually afford it.
5. The monetary policy I suggest we use is to increase the money supply and lower the cost of
borrowing. I believe that this will affect how we calculate the corporate tax rate because if a
company has an easier time getting a loan, and if they have access to more money, we can make the
tax rate higher because they will have more money. The money that we get from taxing these
corporations should be put back into the economy by the government. If we were to keep the tax
rates higher we can use the extra money and put it into things such as; the building of roads,
education, and

Corporate Income Tax In The United States
Corporate income tax is one of the highest taxes in the United States, and for several beneficial
reasons. It is an impertinent source of federal income, a crucial backstop for personal income tax,
does not create jobs, and as seen from the past, creates higher taxes in the future. To begin, "the
corporate income tax is the third highest source of federal revenue" in the United States ("How does
the corporate income tax work?"). Federal revenue is used to aid the government financially, in
instances such as Medicare and Medicaid. Contrary to popular belief, there is no flat–rate tax on all
businesses, meaning that all corporations pay the same tax rate. Instead, a corporation's marginal tax
rate can be anywhere between fifteen to thirty–five ... Show more content on Helpwriting.net ...
These tax reforms can be seen during the 1980s with the Ronald Reagan Administration. Ronald
Reagan and his "Reaganomics", as the media called it, was a process of cutting taxes, including
large cuts to corporate income tax, to stimulate business and the economy (59b.). Cutting taxes on
the upper class of the United Stated was originally thought to drive business owners to hire more
workers and produce more and better products in the global trade market. However, this resulted in
a deep recession in the early 1980s (59b.). Instead of sparking business and increasing the United
States' place in the global market, it created large inflammation and higher interest rates (59b.). As
for global trade, the price of exports decreased while the cost of imports increased due to drastic
change in value of the American currency (59b.). The ideology of "Reaganomics" and lowering
taxes ended in disaster for the U.S.

Essay on Corporate Tax Case Study
SCENARIO: You are a CPA with an office in NearLakes City and clients consisting primarily of
professionals, entrepreneurs, and small business owners. John Smith, Esq., a practicing attorney
with offices near yours, walks in your office and wants advice from you relating to a recent influx of
cash he received as a result of winning a large jury verdict on behalf of his client in a personal injury
case. His wife Jane Smith accompanies him during your meeting because she has some additional
tax planning advice to ask of you.
ROLE: After reviewing John and Jane Smith's points of view, it will be your turn as a tax
professional to decide on the best course of action from a tax perspective on their issues. Prepare a
three page memo (at least ... Show more content on Helpwriting.net ...
Does it make any difference that I use my car primarily for transporting my jewelry to different
shops around town? Finally, I think I can earn more money if John were willing to invest $15,000
for new jewelry making equipment since my original equipment, which cost $10,000 five years ago,
is almost obsolete. Does this make sense from a tax perspective?"
Given the scenario, your role and the information provided by the key players involved, it is time for
you to make a decision.
If you are finished reviewing this scenario, close this window and return to this week's You Decide
item, in your course window, to complete the activity for this scenario.
You can return and review this scenario again at any time.
Prepare a three–page memo (at least 900–1,500 words per page) to John and Jane Smith addressing
the issues presented:
1. John Smith tax issues:
a. How is the $300,000 treated for purposes of federal tax income?
b. How is the $25,000 treated for purposes of federal tax income?
c. What is your determination regarding reducing the taxable amount of income for both (a) and (b)
above?
d. Is it more beneficial to continue leasing the business space or to buy the building?
2. Jane Smith tax issues:
a. What are the different tax consequences between paying down the mortgage (debt) and assuming
a new mortgage (debt) for federal income tax purposes?
b. Can John and Jane Smith utilize a 1031 tax exchange to buy

A Current D / V Using Market Values
A Current D/V using market values: 41.%
B Risk–free return (rf): 4.58%
B Equity beta: 0.97
B Market risk premium (rm – rf): 7.43%
B Levered cost of equity (re) at current D/V: 11.79%
C Cost of debt (rd): 3.43%
C Corporate tax rate (t): 41.63%
D Unlevered cost of equity (re) at D/V = 0% 9.36%
E Average cost of capital (r*) at D/V = 60%: 7.03%
A) Current level of leverage:
The current level of leverage for Marriott Corporation is 41% as it the market leverage in the exhibit
3, which is the book value of debt divided by the sum of the book value of debt plus market value of
equity.
B) Cost of equity:
The risk free rate is taken as 4.58% as it is the average of the Long–term U.S. government bond
returns from 1926 to 1987 in exhibit 4.
The equity beta given is 0.97, calculated for the period 1986 – 1987 using the stock returns. This
beta gives us the risk attached to Marriott Corporation's shares.
The market risk premium is calculated as 7.43%. As the market risk premium is the difference
between the expected market portfolio return and the risk free rate. The expected market return is
12.01% for the period 1926 – 1987, mentioned in exhibit 4 in S & P's 500 composite stock return
index. The risk free rate is 4.58%.
The cost of equity is calculated using the CAPM formula:
Expected return = risk–free rate + β * (risk premium) re = 4.58 + 0.97 * (7.43) re= 11.79%
C) Cost of debt and corporate tax rates:
The cost of debt for Marriott Corporation is calculated

Corporate Taxation And Tax Avoidance
For multinationals, tax planning can be a complex but a vital aspect of its operations. The primary
objective of these corporations is to minimize their worldwide tax burden. With globalization
expanding, opportunities for corporate tax avoidance expanded with it. Technological advances
made it easier for taxpayers to hold offshore investments, increasing the opportunity for them to
evade their domestic tax obligations. Tax avoidance can be done in a number of ways. Loopholes
such as using dividend or capital gains to avoid taxation are only a few examples. Across the
European Union and as of Jan. 28, the European Commission proposed a scheme to tackle some of
the most common tax avoidance measures used by multinationals to reduce their tax bills. The
Globe and Mail published an article highlighting the Commission's proposal and a few possible
methods corporations use to evade paying taxes across Europe.
Most of the EU participant countries employ a territorial/source approach when it comes to tax
planning. This means that the country focuses on the income earned by firms within the legal
jurisdiction, and not the company of incorporation. Through this approach, "billions of euros are lost
every year to tax avoidance"–stated that EU tax commissioner. These big corporations legally avoid
taxes of up to €70–billion a year in Europe alone. A study issued by the European parliament
estimated that the global losses from such schemes range anywhere between $100–billion and

The Corporate Tax Transparency Report Essay
Introduction
The Australian Taxation Office (Henceforth known as the ATO) released an inaugural corporate tax
transparency report, showing the 579 local and foreign–based companies that paid no company tax
in 2013–14 had combined turnover of $405.9 billion and taxable income of $4 billion. The report,
which forms part of a global push for improved corporate transparency, provides a positive outlook
into corporate transparency, although the critical issue of the minimal tax paid by large corporation's
remains. This paper aims to analyse the ATO corporate tax transparency report for the 2013–14
income year to uncover and critique the appallingly low, or inexistent, tax paid by large
corporations, especially those with international transactions. Initially, the ATO's corporate
transparency report shall be outlined to corroborate the argument corporate tax paid is minimal.
Furthermore, the amount of corporate tax paid outlined in the report shall be critiqued, with a focus
on corporations with international transactions. As a final point, a number of recommendations shall
be outlined concerning corporations paying their 'fair share' of tax. It shall be argued that corporate
transparency is transitioning in the correct direction and should continue doing so, although reforms
are necessary to ensure large corporations pay their 'fair share' of tax. The starting point for this
argument is the aforementioned report.
ATO Corporate Transparency Report
The ATO has a legislative duty

Assignment Questions On Business Structures
Name:
Gaurav Gujral
Student number:
12022827
Word count
2252
Part one:
The list of questions and the answers given by the client:
It has been decided by the clients that they are willing to start a new business but still they have not
decided regarding the business structures that should be adopted by them for this purpose. Some of
the commonly used business structures in Australia are sole traders, partnerships, companies and
joint venture. In order to decide the most suitable business sector for the clients, the following
questions have been asked.
Q1: The new business will be started by how many persons?
Ans: There will be 3 to 4 persons were going to start a new business. But in this context, it needs to
be mentioned ... Show more content on Helpwriting.net ...
Q5: Do you want the benefit of the limited liability from the business structure adopted by you?
Ans: Yes, we want the benefit of limited liability because we do not want that our individual assets
can also be held liable for the debts of the business.
Q6: How do you arrange for the funds required for establishing the business?
Ans: Some of the funds will come from our own savings but for the rest of the funds, in such a case
we may have to take a business loan.
Q7: If you want to expand the business, do you have sufficient capital for it?
Ans: No, we do not have the funds required for the expansion of the business.we may have to look
towards outside sources.
Part two: Research into the Relevant Law
In this part, the law that is relevant to deal with this issue has to be analyzed. After examining the

answers given by the clients, it seems that the business structure of a corporation will be most
suitable for the clients. The other option is to create a partnership for the business. However it is not
possible for the clients to run their business as a sole trader because it will be started by 3 to 4
persons jointly. Under these circumstances, the relevant legal provisions related with the
incorporation of the company and running the business as a partnership need to be evaluated so as to
decide which business structure will be most apt for the clients and which will provide the
maximum benefits to the clients.
The law provides that after the

Corporate Taxation And Corporate Tax
As stated in the law of the United States, which sets on a residence basis, all the profits from the
foreign subsidiaries of American multinational firms have to be taxed at the corporate tax rate. As a
result, the tax code creates a strong incentive for firms to retain these earnings in their subsidiaries
aboard. Grubert and Mutti (2001) argue that the decisions on repatriations are highly sensitive to tax
consideration. However, these income tax payments incurred can be deferred indefinitely until
repatriated to the United States. In order to avoid international double taxation, U.S. multinational
firms are entitled to get tax credits to only pay the difference between what they have paid at the tax
rate in host country and the tax ... Show more content on Helpwriting.net ...
multinational firms. These passive earnings of controlled foreign corporations (CFC) that is
characterized as rental income and dividends by Internal Revenue Service (IRS) would be taxed
immediately by the United States even if they were not repatriated to parent firms.
Then I dig deep into how the effect of repatriation tax costs appears differently across different firms
through exploring various firm characteristics in order to study cross–sectional heterogeneity. To do
this, firm size and public debt rating are used as proxies for financing constraints criteria in a similar
way as described in Faulkender and Wang (2006)'s paper. Almeida, Campello, and Weisbach (2004)
prove that financially constrained firms with high default risk save a larger proportion of cash flow
as cash when it is costly for them to raise funds from external capital market. Correspondingly, less
financial constrained firms have more flexibility in funding domestic projects from external capital
market, aside from repatriating cash flow from low tax jurisdictions when high repatriation tax costs
will be triggered.
The transfer of cash flow within the firms from foreign subsidiaries to parents can't be tracked
closely through the Compustat data. As a consequence, additional firm activities that have to be
supported by cash stockpile are examined in the paper. Dividend payment to shareholders is one of
the

Corporate Tax Rate And Its Effects On The United States
Phillip Fok
Week Ending: Sunday, September 4, 2016
Apple owes 14.5 billion in back taxes to Ireland
On Tuesday, August 30 the European Union ordered Ireland to collect 14.5 billion in taxes from
apple. Europe's competition enforcer said that apple's deal with the Irish allowed the company to
pay basically nothing on its business. This deal allowed apple to pay only 50 euros for every million
euros in profit in 2014. However, Ireland's corporate tax rate is at 12.5% and is one of the lowest in
the developed world. This low tax rate is a huge incentive for companies to cut down on their
expenses.
Samsung recalls Note 7
After news of the exploding battery on Samsung's Note 7, the South Korean company has decided to
issue a recall of all 2.5 million phones. The company may have to spend nearly 1 billion dollars to
replace all the defective battery. After the success of Samsung's Galaxy S7 the timing of this recall
couldn't have been worse. However, this recall may be worth the $1billon as it could potentially
save the company's reputation in the long run. Still, the $1 billion will only represent less than 5% of
the projected $20.6 billion in net income.
Vancouver home sales down 26% after foreign ownership tax
Home sales dropped 26% in Vancouver's housing market in Auguest on a year to year basis after the
introduction of a foreign ownership tax. In a statement the Real Estated Board of Greater Vancouver
said that August sales totaled 2489, compared to 3362

Corporate and Personal Income Tax Fraud
Corporate and personal income tax fraud is not a new phenomenon; it is a part of day to day
business in the global economy. Where there is worship of money there seems to be fraud in one
form or another. China is no different than any other country on this planet; it has honest
corporations and dishonest ones also. China is listed as number 8 on the top 10 countries for tax
fraud (Berr, 2011). United States is still listed as number one and Canada not even in the top 20.
Hong Kong is listed as four as "The ten Biggest Tax Havens within the World" (Said, 2013).
i. Corporate Income Tax / Evasion
As recently as January the 25th of 2014, the mainland's tax commissioner, Wang Jun, says
international co–operation to combat tax fraud and evasion will be stepped up according to the
South China Morning Post (Shih, 2014). China would fulfil its responsibilities as a big nation in
international tax initiatives, while using international co–operation to reform its tax system, Wang
said at an Organisation for Economic Co–operation and Development (OECD) taxation forum in
Paris this week. (Shih, 2014). Fatca, which will take effect on July 1, requires foreign financial
institutions to report to the US government information about American taxpayers or foreign firms
in which US taxpayers hold substantial ownership.
In 2012 Beijing recovered taxes worth US $5.7 billion, 30 times the amount in 2008, the tax
administration said.
It has reported four cases of tax fraud on the mainland in

Trump's administration plans to cut the business tax from 35% to 15% to make America more
attractive in the global market, especially to those manufacturing company who chose to open
factories outside US due to the high tax rate compared to other countries. This action of cutting tax
is one kind of government intervention. Corporate tax, also called company tax, is a direct tax
imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. The
taxes may also be referred to as income tax or capital tax. To the customers, corporate tax can be
considered as an indirect tax sometimes as it would cause companies to increase the price of goods
or service. As the tax is levied as percentage, it is ad valorem tax. ... Show more content on
Helpwriting.net ...
Moreover, America is always considered the research and technology centre in the economic system
in the world. In recent years, unemployment becomes a major issue in American society due to the
economic slowdown. During the presidential campaign, Trump promised he would create jobs for
American people by encouraging corporations to establish companies inside US. However, most
companies refused to do this because of the high tax rate. Reducing the tax rate is the first step of his
plan. Take the most influential company in the world, Apple, as an example. Apple has the highest
market capitalization in the world. One reason that Apple has such a high revenue is that it sets its
factories in the countries like China which has low corporate tax rate and cheap labour. After the tax
rate drops to 15%, companies like Apple will chose to build factories domestically as the low tax
rate can make up the larger cost of labour, which leads to the same revenue eventually. This would
bring jobs to the US as Trump said. Thus, the unemployed rate would drop to a normal level. For
other companies in the US, the lower tax rate would reduce their cost of production and eventually
the price of the products. With lower price, the products will be more competitive in global market
and the demand will increase. This would require

Corporate Tax Research Paper
Does Corporate Tax Cut Create More Jobs?
The current wave of "Tax reform" has created a huge debate whether lowering taxes will boost
economy and employment growth. The US has the highest Corporate tax rate among the advanced
countries; thus, it is argued that it is disadvantageous to US corporation in terms of global
competitiveness. Several corporations have moved their operations overseas in the past few years;
Indeed, it has raised concern whether these companies are fleeing abroad due to higher tax rates in
the US? Is higher tax rate creating an unemployment? Or will tax cut bring overall economic
growth? From close study of top companies' financial reports and the US history events, it can be
inferred that corporate tax cuts will not ... Show more content on Helpwriting.net ...
Conservatives argue that current corporate tax is burdensome to US business and restrict economic
growth. If taxes are reduced, then company will have more post–tax profits for investment and job
growth. Companies with more liquid cash might spend more on expansions. Still, reduction in the
tax rate may not guarantee job growth or more investments. As per Klinger & McFate, US
corporation in S&P 500 Index had approximately $1 trillion cash on hand. (2013). If the companies
wanted to expand their business, they had enough cash to do so. In 2004, the Congress reduced the
tax rate from 35% to 5.25% on repatriated earnings with an intention that saving could be spent on
domestic investments or employment. However, in a study of an impact of the reduction in tax on
repatriated earnings, researchers found that it did not increase domestic investments or employment
and much of the post–tax earnings were returned to shareholders through stock repurchases. In fact,
these companies downsized their workforce between 2004 to 2007 (Marples & Gravelle, 2011). It is
evident from the past that tax rate reduction has not created employment.
Despite high profits, big companies are paying fewer taxes. US firms have recorded highest level of
profits since 1947 and lowest taxes as of 2012. Sarah Anderson, the scholar at Institute for Policy
studies, evaluated 92 firms who have paid less than 20% of effective tax and had 0.74% job
reductions. These business firms used the profits

Corporate Income Tax
The federal corporate income tax was created in 1909 with a rate of 1% for all businesses who had
an income above the line of $5,000. The tax rate has been as high as 52.8% in 1969 and has been
divided into different rates for different income levels. Today, the federal corporate income tax rate
is a uniform rate of 35% for companies who have an income of over $18.3 million. Throughout
history, people have debated whether lowering the federal corporate income tax rate will result in
job creation. Although lowering the tax rate might promote job creation within the country instead
of job creation overseas, support more company re–investment in research and development, and
allow consumers to save more; lowering the federal corporate income ... Show more content on
Helpwriting.net ...
For example, Ireland lowered its corporate tax rate to 12.5%, which got the economy booming. The
country's gross domestic product rate grew at a rate of around 26.3%. Ireland's low corporate tax
rate attracted successful foreign companies to invest in Ireland. For example, American companies
such as Microsoft, Google, and Apple all have subsidiaries in Ireland to take advantage of Ireland's
low corporate tax rate (Semeuls). However, the low corporate tax rate was not the only reason the
country had flourished. There were several other factors that helped boost Ireland's economy. One of
them included Ireland joining the European market in the 1990s, which allowed goods to flow freely
across the countries in the European Union. Soon, Ireland became an entry point within Europe and
large corporations started to use Ireland to manufacture goods and sell the goods to other European
countries without the attachment of any tariffs. In addition to Ireland joining the European market,
Ireland attracted many corporations to its country because it was primarily an English speaking
country. This helped in the ease of communication between the Irish government and the foreign
corporations. Another factor that helped boost Ireland's overall economy was that the Irish
government passed a number of educational reforms which led to a significant number of educated
graduates that came out of Irish schools (Semeuls). In the 1990s and 2000s, Ireland became a highly
attractive country for international companies because it acted as an easy trade center within the
European Single Market. Therefore, the low corporate tax rates was not the only reason Ireland's
economy boomed, but also a combination of factors, which was very specific to the country of
Ireland and that could not be copied by other countries, all came together to

The Relationship Of Tax Avoidance With Corporate Social...
There is an ongoing debate on the relationship of tax avoidance with corporate social responsibility
(CSR) and ethical behaviour of companies. Specifically, corporate social responsibility can be
defined as companies undertake the responsibility for social welfare and development (Matten and
Moon, 2008). For ethical behaviour, it is referred to govern the actions of individuals and
organizations in the business under contemporary standards (Epstein, 1998). Moreover, this is the
difference between tax avoidance, which companies use appropriate methods to reduce the amount
of tax within the law, and tax evasion, which can be defined as illegal to reduce taxes (Hasseldine
and Morris, 2013). According to US Treasury (2009), each year the US government may lose more
than $345 billion revenue because of a variety of tax avoidance. Moreover, the UK government also
faces the problem of losing tax, at £40 billion each year (HM Revenue and Customs, 2010). In
recent years, an increasing number of governments, media, and non–government organizations
claim that corporate tax avoidance is not conducive to the development of society and ethical
behaviour of enterprises. The aims of this essay are to research the motivations of corporate tax
avoidance, and discusses to a large extent corporate social responsibility and ethical behaviour of
firms is in conflict with tax avoidance, even though they have some consistency. The first section of
the essay will research the motivations of

Essay On Corporate Tax
Comparing Corporation Tax Across Different Business Entities
Qiaoyuan Zhuang
Houston Community College
Professor Khoja
Abstract
Corporation tax rate can be tricky to compare across different business entities. Selecting the right
type of corporation for small business can helps operational success. There are different types of
business structures include limited liability companies (LLC), partnerships, S corporations, C
corporations and sole proprietorships. My research paper will focus on the difference of corporate
tax between those business structures. What is most favorable that small business structures owner
will choose for their businesses? What is tax liabilities before and after they change their business
structure? ... Show more content on Helpwriting.net ...
Other business structures are double–taxed at the business and personal income level. And some
businesses are run by multiple owners, so personal liability is divided.Here are the general
descriptions and advantages/disadvantages of each business.
One of most common choice of business entity is Limited Liability Company. There is no limited on
the numbers of shareholders. "Owners of an LLC are called members. Most states do not restrict
ownership, and so members may include individuals, corporations, other LLCs and foreign entities.
There is no maximum number of members. Most states also permit "single–member" LLCs, those
having only one owner." (Limited Liability Company (LLC). (n.d.).
Limited liability company also has limited liability protection." A limited liability partnership (LLP)
is a partnership in which some or all partners (depending on the jurisdiction) have limited
liabilities."( Limited liability partnership. (2017, December 01). However, LLC won't be taxed at
corporate level, business owner need to file their tax return on their personal federal tax returns.
taxes are higher than they would be at corporate level. Individual will pay for self–employment
taxes on federal items like Social Security tax and Medicare tax." The FICA tax is 15.3% of an
individual's earned income up to a certain limit (called the Social Security Wage Base) that increases
each year, and then 2.9% of wages without limit."( A. (2010, August 19). FICA Tax) .LLC

Essay On Corporate Tax
I write to you today to encourage you to support legislation to lower the corporate tax rate to 20%
for American businesses. I am aware that the House of Representatives has recently passed a bill to
reform the tax code and that you have voted in favor of the legislation. I recognize that you are
aware that there are no guarantees that the Senate will pass its bill. Also, I know that the House and
Senate will need to work together to send a bill to the President's desk for his signature. As a
Republican and a constituent in the 6th district, I implore you to ensure that Congress passes tax
reform and more importantly lowers the corporate tax rate.
Today, we see nations around the world that have taken advantage of lower corporate tax rates ...
Show more content on Helpwriting.net ...
Perhaps that had a slight impact, but that does not correlate with the strong economic growth in
Ireland in 2015. For example, its almost been twenty years since Ireland joined the European Union
and much of their economic growth happened after they lowered the corporate tax. According to
Trending Economies, the European Union, itself, only grew a little above 2% in 2015, meaning
Ireland represents an outlier in that Irelands economic success was not due to the European Union,
but instead represents what happens to an economy when corporate tax rates are low.
As the son of a business owner and an inspiring entrepreneur or politician, I believe that
opportunities should be available to all Americans. I personally believe that lowering the corporate
tax rate creates more jobs and lowers unemployment. It is simple logic that the more money
corporations have the more the corporations will have the ability to expand their business and hire
more employees. This transpired during the 1980s when Ronald Reagan was president. In President
Reagan's Tax Reform Act of 1986, he and Congress, in 1987, lowered the corporate tax rate from
46–34%. In 1986, the unemployment rate was around 7% according to the Bureau of Labor
Statistics. In 1991, the unemployment rate dropped to 5.9%, which allowed for greater economic
prosperity in the 1990s. At the same time, Democrats argued that many corporations do not pay the
average 35% standard rate because of

Corporate Tax, Cost of Debt, Cost of Equity and Capital...
Corporate Tax, Cost of Debt, Cost of Equity and Capital Structure: A case study of REITs and
conventional real estate firms in the UK
University of Groningen
Faculty of Economics and Business
BSc International Business
January 2013
Table of contents
1. Introduction 4
2. REITs 7
3. Literature Review 9 3.1 Capital Structure Irrelevance 9 3.2 Present Models 10
4. Data and Methodology 12 4.1 Regression 12
5. Findings and Discussion 16
6. Conclusion 20
7. Appendix 21
8. Bibliography 30
Abstract
In January 2007 the UK adopted the globally successful real estate investment trust (REIT) regime,
allowing real estate firms to adopt the REIT status with the benefit of immediate exemption from ...
Show more content on Helpwriting.net ...
Furthermore, I expect that REITs use relatively less debt for financing, because of the relatively
higher cost of debt.
Already in 1958, Modigliani and Miller have pointed the discussion of capital structure towards the
cost of debt and equity. According to their first proposition, in a world of no corporate taxes and
with perfect markets, financial leverage has no effect on a firm's value. In their second proposition,
they state that the cost of equity equals a linear function defined by the required return on assets and
the cost of debt (Modigliani and Miller, 1958).

As negative aspects of debt, e.g. personal tax loss and bankruptcy costs however do exist in reality,
Miller (1977) elaborates that leverage will either have no or a negative effect on the firm's value,
hence untaxed firms should favor equity.
Nevertheless, firms have used leverage even before corporate taxes have been introduced (Maris and
Elayan, 1990). This implies the existence of some market imperfections, which benefit the use of
debt financing, thus enable a trade–off of the cost and benefits of debt resulting in an optimal capital
structure, where marginal cost equal marginal benefits.
In general, the majority of existing research is set up by taking the security issuance choice as the
dependent variable and then tests empirically for determinants based on data from one type of
companies. It needs to be taken into consideration that security issue decision and capital

The Relationship Between Tax Avoidance And Corporate...
There is an ongoing debate about the relationship of tax avoidance with the corporate social
responsibility (CSR) that companies undertake the responsibility for social welfare and development
(Matten and Moon, 2008), and ethical behaviour of companies, which can be defined as govern the
actions of an individual in the business organizations under contemporary standards (Ferrell and
Gresham, 1985). Tax avoidance, which refers to companies use suitable methods to reduce the
amount of tax within the law is different with tax evasion, which illegally reduction of tax
(Hasseldine and Morris, 2013).
[There is an ongoing debate that the relationship of tax avoidance with corporate social
responsibility and ethical behaviour. Specifically, corporate social responsibility, which can be
defined as companies undertake the responsibility for social welfare and development. For ethical
behaviour, which refers to govern the actions of individuals in the business under contemporary
standards. Moreover, this is the difference between tax avoidance, which companies use suitable
methods to reduce the amount of tax within the law, and tax evasion that illegally reduction of
taxes.]
According to US Treasury (2009), each year the US government may lose more than $345 billion
revenue because a variety of tax avoidance. Moreover, the UK government also faces the problem of
losing tax, with £40 billion each year (HM Revenue and Customs, 2010). In recent years, an
increasing number of

Corporate Tax Act400
Portfolio Project ACT400
Corporate Tax–ACT400
September 1st, 2012
Portfolio Project ACT400
I. Problem 1–Osprey Corporation
a. Facts
Dan and Patrick Zimbrick, sole shareholders of Osprey Corporation have been required to repay
compensation to Osprey Corporation that was found by the IRS to be excessive. In order to
determine how these repayments are to be treated for tax purposes, it is important to note that in
2006 the board of directors made up of Dan, Patrick and their uncle John, adopted a legally
enforceable resolution. The resolution stipulated that any overpayment of salary disallowed as a
deduction by the IRS would be repaid to the Osprey Corporation. In late 2010 during an audit by the
IRS, ... Show more content on Helpwriting.net ...
In this case, the taxpayer included the excessive compensation in his return for the year the
compensation was received. Section 1341 allows a taxpayer the option to choose the more favorable
alternative. As written in the case: "if the taxpayer included an item in gross income in one taxable
year, and in a subsequent taxable year he becomes entitled to a deduction because the item or a
portion thereof is no longer subject to his unrestricted use, and the amount of the deduction is in
excess of $3,000, the tax for the subsequent year is reduced by either the tax attributable to the
deduction or the decrease in the tax for the prior year attributable to the removal of the item,
whichever is greater" (52 AFTR 2d 83–6071, 718 F2d 193, 83–2 USTC P 9620.). If Dan or Patrick
had a higher tax rate in 2007 than in 2011, this credit could result in more tax savings. Because the
court had determined that the repayment can be claimed under section 1341 in Van Cleave v. U.S.,
and the IRS had taken a similar position in Rev. 69–115 1969–1 C.B. 50. Dan and Patrick can claim
the repayments to Osprey Corporation as either a credit under Section 1341 or a deduction under
section 162(a).
II. Problem 2–Four Winds Partnership
a. What adjustment is required regarding Paul's purchase of the partnership interest? Must a section
754 election be made? A section 754 election is made by a

Cost of Capital: AMD and Duke Energy
Using the publicly available data, we estimated the weighted average cost of capital of the AMD and
Duke Energy. For the AMD, the WACC is 10.83%. For Duck Energy, the WACC is 2.76%
When we calculate those number, we need to know the equity and debt of the company which can
easily find on yahoo finance. The cost of debt and the corporate tax rate that we calculated are also
based on the data from yahoo finance. We made Beta for the companies with 10 year ranges and use
it to calculate return of equity. After we got those number, we can calculate the WACC.
Advanced Micro Devices
Bate–2.33
Corporate tax rate – 2.79%
Returns of Equity – 11.29%
WACC – 10.83%
Duke Energy
Bate – 0.36
Returns of ... Show more content on Helpwriting.net ...
The Bate of AMD is higher than Duke which means if you want to invest AMD you will bear higher
risk than Duck. However, high risk also come with high return, the WACC of AMD is higher than
Duck. Duke also need to pay a lot of tax, so its Returns of Equity is lower than AMD.
Using the publicly available data, we estimated the weighted average cost of capital of the AMD and
Duke Energy. For the AMD, the WACC is 10.83%. For Duck Energy, the WACC is 2.76%
When we calculate those number, we need to know the equity and debt of the company which can
easily find on yahoo finance. The cost of debt and the corporate tax rate that we calculated are also
based on the data from yahoo finance. We made Beta for the companies with 10 year ranges and use
it to calculate return of equity. After we got those number, we can calculate the WACC.
Advanced Micro Devices
Bate–2.33
WACC – 10.83%

Duke Energy
Bate – 0.36
WACC – 2.76%
The data we list above, show the major difference between two companies. The Bate of AMD is
higher than Duke which means if you want to invest AMD you will bear higher risk than Duck.
However, high risk also come with high return, the WACC of AMD is higher than Duck. Duke also
need to pay a lot of tax, so its

The Relationship Of Tax Avoidance With Corporate Social...
There is an ongoing debate that the relationship of tax avoidance with corporate social responsibility
(CSR) and ethical behaviour of companies. Specifically, corporate social responsibility can be
defined as companies undertake the responsibility for social welfare and development (Matten and
Moon, 2008). For ethical behaviour, it is referred to govern the actions of individuals and
organizations in the business under contemporary standards (Epstein, 1987). Moreover, this is the
difference between tax avoidance, which companies use suitable methods to reduce the amount of
tax within the law, and tax evasion that illegally reduction of taxes (Hasseldine and Morris, 2013).
According to US Treasury (2009), each year the US government may lose more than $345 billion
revenue because a variety of tax avoidance. Moreover, the UK government also faces the problem of
losing tax, with £40 billion each year (HM Revenue and Customs, 2010). In recent years, an
increasing number of governments, media, and non–government organizations claim that corporate
tax avoidance is not conducive to the development of society and ethical behaviour of enterprises.
This essay will research into the motivations of corporate tax avoidance, and discusses to a large
extent corporate social responsibility and ethical behaviour of firms is in conflict with tax
avoidance, even though they have some consistency. The first section of the essay will research the
motivations of corporate tax avoidance. In the

Types Of Business Entity For A Business
Of all the choices you make when starting a business, one of the most important is the type of
business entity you select for your company. Not only will this decision have an impact on how
much you pay in taxes, it will affect the amount of paperwork your business is required to do, the
personal liability you face and your ability to raise money. It 's not a decision to be entered into
lightly, either, or one that should be made without sound counsel from business experts. "Kalish says
it 's important for business owners to seek expert advice from business professionals when
considering the pros and cons of various business entities". The business entity I have chosen for my
business is sole proprietorship. I don't want to be responsible if someone else makes a bad chose for
the company. I want to run my business my way. If anything goes wrong it is completely my fault
not anyone else's. Types of Business Entities The type of business entity you choose will depend on
three primary factors: liability, taxation and record–keeping. Here 's a quick look at the differences
between the most common forms of business entities: A sole proprietorship is the most common
form of business organization. It 's easy to form and offers complete managerial control to the
owner. However, the owner is also personally liable for all financial obligations of the business. A
partnership involves two or more people who agree to share in the profits or losses of a business. A
primary

Corporate Tax
Michigan Corporate Income Tax Brackets
Tax Bracket (gross taxable income) Tax Rate (%)
$0+ 6.00%
Michigan's Corporate Income Tax (CIT), is a flat rate of 6% compared to California's flat corporate
income tax rate of 8.840% of gross income.
Employee Needs
Single–family homes can be found within a ten–mile radius of the new corporate office in Louisville
ranging in price from $20,000 to $140,000 in reduced and vacant neighborhoods. For employees
making the transition from the California housing market, these older developments will provide a
unique lifestyle and a high return on their investments due to the buyer's market in the Detroit area.
Spouses of employees may find employment in the local area with one of the many ... Show more
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The three largest malls in the Detroit area are within 15 miles of the proposed location, Tower
Center Mall, the Fairlane Town Center, and the New Center One which houses over 300 stores,
allowing consumers will find a large variety of options.
The infrastructure of Detroit is exceptionally well maintained with relatively minor extra travel time
compared to California with 20 versus 44 minutes, respectively. The additional delay usually occurs
during evening peak time but adds only 16% plus travel time per year. California traffic accounts for
45% extra travel time, by contrast.
The Detroit public transportation is one of the finest with many options available from the DDOT
and SMART bus lines, the QLINE streetcar system, and Amtrack to personal services such as
Uber/Lyft. Though the cities were meant for a lot of private vehicles, these transportation systems
will allow employees and their families to travel anywhere near the metropolitan area easily.
Employees will find the 2.4% local income taxes a lighter burden than the regional 8% paid to the
city of Los Angeles. The 6% sales tax rate is another reason Detroit is a better option for employees
than the 9% charged in Los Angeles.
The state of Michigan experiences all four seasons, with

Advantages And Disadvantages Of Sole Proprietorership
Sole proprietorship is the simplest way to start up a business, it is not incorporated which means that
there is no distinction between the Business and Herring. Some advantages include: Easy and
inexpensive form of structure, and legally the only cost being getting the appropriate license and
permits. Complete control over the business and decision making, no need to consult with others or
ask permission if you want to make changes. Easy tax preparation since your business in not taxed
separately so it is easy to fulfill the tax reporting requirements for a sole proprietorship. The tax
rates are also the lowest of the business structures, and all profits go into the owner's pocket Some
disadvantages include: Unlimited personal liability since there is no ... Show more content on
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LLc are considered self–employed and self–employment taxes are paid in contributions to medical
care and social security. Plus, the entire net income of LLC is subject to this tax. The concept of a
joint venture (JV) is a term without any precise meaning under English law. Instead, the term is
predominantly where two or more parties collaborate in carrying on a business activity. Moreover,
since there is no English law relating specifically to JVs, the relationships between the parties is an
amalgamation of: Common law rules. Substantive provisions of company or partnership law. Tax
law. Competition law (both at European and national levels). Other laws governing various issues
including intellectual property, employment and real estate. In a nutshell, it makes more sense for
Herring to initiate a limited partnership as it will provide the necessary insights of the English and
European markets, laws and other regulations, and Herring would be able to keep a satisfying profit
even if the English regulations my be more

Essay On The Corporate Tax

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