[onlyrealcuzzo]

How else do you solve this in the US?

Company A sells all of its IP to Ireland. They have the Irish company charge them 100% of the profits for IP. Poof. No US taxable income.

What's your magic beans solution for this beside what the IRS plans to do?

[pseudo0]

Why not just cut the corporate rate to 0 and raise the necessary funds through a VAT? No amount of fancy accounting tricks will eliminate companies' dependence on the US consumer market.

[onlyrealcuzzo]

Because the Federal government doesn't have a sales tax?

This system is easier than getting all 3 branches of the government to impose a VAT.

And also, that doesn't solve the problem.

If you're Apple - you have only pay taxes on your sales in the US.

If you're a smaller company, you pay taxes on all your profits, plus a VAT on your sales in the US.

[pseudo0]

What's stopping the federal government from implementing a VAT? I realize there's a ton of legal and political inertia, but theoretically it seems like it would be an improvement.

In an ideal system everyone would charge a VAT rather than a corporate tax, resulting in a level playing field for foreign profits as well.

[coliveira]

It is very simple: just make corporate profits for US corporations (or more sensibly, the difference in taxes) taxable on the US, wherever it is made. This is already the rule for individuals.

[onlyrealcuzzo]

"Wherever it is made" is simple when it comes to tech.

And, anyway, almost nothing tech is made in the US.

The IRS has a (separate?) issue to deal with this - that countries will pay tax primarily based on the country where the sales take place.