...and the usual cries of fairness begin beyond the White House and our Dear Leader's administration:

http://cleveland.cbslocal.com/2014/08/26...

What is unfair is a tax system that is not consistent. What is unfair is a four million word tax system that is unintelligible (intentionally, IMO). What is unfair is a tax system that inflicts "fairness" as a part of its implementation.

If I were king for a day, everyone would pay the same percentage of income as their Federal Income Tax obligation whether it is someone making $10,000 per year or someone who makes $10,000,000 per year. Only when people are treated EQUALLY by our tax code will people wake up and begin to care about things like our Federal spending and National Debt. These are real problems, but the half of the country that does not pay Federal Income Tax simply don't care because they are not impacted by the ever-increasing tax burden placed on the rest of us.

The White House response and most media reports regarding tax inversions are inaccurate and do not fully explain what it is. The US is the only country that taxes earnings from income earned in foreign countries, both by US citizens and companies domiciled in the US.

It works this way. After a company (or citizen) pays taxes to the foreign country for the income earned in that country, a US income tax return is filed that deducts the foreign tax paid. Any remaining adjusted gross income is taxed at the US's very high tax rate.

For example, let's say that Burger King is paying a marginal US tax rate of 35% on income from US operations. For income earned in another country, Burger King may be paying a marginal tax rate of 20% to that foreign country. Thus, the difference of 15% (35% - 20%) is the marginal tax rate paid to the US for income earned by company operations in a foreign country. Thus, all of their world-wide income is taxed at a combined total equal to the high US marginal tax rate of 35%...

In a tax inversion, the multi-national, US-based company changes its domicile to a country with a lower corporate tax rate. They still pay 35% tax rate on US-generated income. But all of their income earned in all other countries is taxed at the rates in those countries, instead of the current effective 35% rate (foreign country + US).

The same problem occurs for US citizens who live and work in foreign countries. After paying income taxes in that country, they file a US income tax return, deduct the foreign tax paid, and end up paying the US income taxes on any difference. Thus, they effectively don't escape the high individual income taxes here in the US, unless they renounce their citizenship.

The White House and most in the media never fully explain the screwed-up income tax arrangement here in the US applied to foreign earnings, which no other country replicates. This puts US-based companies and citizens at a distinct disadvantage...

He sure is spouting the usual looter crap.

It's Not Fair!!!!!!!!!

Well. I guess Burger King is positioned to become my number one fast food choice.