Global Tax Management Essay Example | Topics and Well Written Essays - 2500 words

ball-shaped Tax Management - Essay ExampleTo absorb a reduction in the incorporate task rate, the US authorities will have to extend the corporate revenue enhancement base and remove or scale down the corporate valuate expenditures accelerated depreciation, domestic manufacturing production deduction, and the research and development tax credit, that reduce capital costs, increase new investments, and encourage job creation. This will result in an increase on the cost of new investments and reduced wages and productivity. Therefore, America should not increase the corporate tax rate and should retain the territorial system, but also combine it with worldwide territory to ensure the government does not lose revenue.The biggest factor that determines Foreign Direct Investment in the country is GDP, a account of 46 countries established that thither is a direct correlation between corporate tax rate and foreign direct investment. Countries with low corporate taxes attract more f oreign investments compared to countries with higher rates. To increase profits, multinational Enterprises (MNEs) invest in countries with favorable economic conditions and tax rates. Empirical evidence for Organization for Economic Co-operation and discipline (OECD) countries shows the negative FDI inflows and increased taxation.There is increased lobbying for the Internal Revenue Code to be revised, for simplification of corporate and personal taxes. Globally there has been a shift towards the flat tax regime, where citizens and business are charged at a harmonized tax rate, with everybody give an equal amount. Advocates of the flat system argue that there are many benefits that accrue from using this system, the system itself is very simple, with easy to comprehend tax codes, some(prenominal) the taxation authority and the taxpayer benefit. Governments primarily adopt the system, as an enticement to attract companies and the general citizenry to paying taxes. Because everyon e will be paying