Income Tax Fundamentals
Compose a 1750 words assignment on income tax fundamentals. Needs to be plagiarism free! The United Kingdom corporations can export their products to the United States marketplace. German corporations can sell products and services to the Saudi Arabian marketplace. Canada corporations can sell products to current and future customers in California or New York. The United States corporations may import raw materials from China. The United States corporations can convert imported raw materials into a new saleable product. The United States corporations can sell new saleable products to two markets. The first market is the local United States marketplace, and the second market is the international marketplace. All countries form part of the United States companies’ international business environment. Consequently, importing countries pay tariffs and duties for imported goods. In the United States, Section 482 of the United States Tax Code shows the different importing liabilities (Paul 239). Further, the United States corporate tax affects international business. With higher tax rates, there are lesser cash inflow percentages applied to sell the United States companies’ products in the global marketplace. With the tax rate at 38 percent, The United States corporations can only allocate 62 percent of the total annual taxable income to selling the company’s products and services in the global marketplace.  .With the tax rate at 15 percent, the United States corporations can only allocate 85 percent of the total annual taxable income to producing and selling the companies’ products and services in the global marketplace (Whittenburg and Altus (2010) 35). Higher United States taxes discourage imports into the United States market With the high tax rates, companies located in other countries may be discouraged from selling their products in the United States market. Some corporations located in the United Kingdom will prefer to sell their products locally because the local corporate tax rate (30 percent) is lower than the United States corporate tax rate (39 percent), reducing United States imports. Likewise, several corporations located in Canada will prefer to sell their goods within Canada because the local corporate tax rate (36 percent) is lower than the United States corporate tax rate (39 percent), lessening United States imports. Some corporations located in Ireland are persuaded to sell their products within Ireland because exporting their products into the United States marketplace with unfavorably higher 39 percent corporate tax profits is less profitable (Whittenburg and Altus (2010) 35). With higher tax rates, the exporting countries will receive lesser after-tax cash inflows from selling their products current to future customers in the United States (Whittenburg and Altus (2010) 453). Tax rate adjustments will increase United States imports To increase the United States imports, the United States government must institute better tax rates. The United States government must lower the United States tax rates to more allowable levels.
