Posted on February 02, 2005 at 18:12:44:
The new corporate tax measure was originally designed to trim an export tax subsidy that the World Trade Association deemed illegal. Along the way to its passage, the law picked up lots of extras for all kinds of business.
The corporate tax rate drops to 32 percent on domestic income from manufacturing, farming and construction, and a new deduction, to be phased in over five years, effectively drops the rate for S corporations and sole proprietorships as well as large firms. Some of the bill’s provisions will reduce taxes over a period of years on foreign profits of multinational corporations.
Some large technology companies and pharmaceutical giants will be able to bring billions of untaxed foreign profits back into this country at a reduced rate.
Technically, the bill is revenue-neutral. It is to be paid for by closing down certain tax shelters, cutting out some tax preferences, even restricting huge deductions for huge S.U.V.s.