The topic is in page 4, point 6, last sentence: “and move to a competitive territorial tax system.” In the current tax code, corporations are taxed on their foreign-earned dividend but they do not have to pay the tax until they return the money to the United States to distribute among shareholders. Many companies choose to keep the money overseas and lobby congress for a “tax holiday.”
A tax holiday allows the corporations to return their earnings to the U.S. without paying tax on it. There have been one or two tax holidays. Under the G-6 plan, they will not even have to wait or lobby. They will be able to pay the dividend as soon as it is earned without paying any tax on their overseas profits.
If foreign dividend becomes tax free but U.S. earned dividend is taxed, what do you think will happen? It will encourage American corporations to outsource even more. The United States will become an empty shell full of tens of millions of desperate people trying to survive without work.
This plan is a travesty. It is a middle class killer. Rejecting it is a matter of survival for this nation.