Companies Subject / Not Subject to US Corporate Tax?

[vnatale]

I think it is worthwhile to consider including interational stocks to your PP given the potential for Biden to undo the Trump corporate tax cuts. It might result in a 10% to 20% differential in returns from companies subject to US Taxes compared to those who are not, all else equal.

My question is that I don't know if there's a list of companies subject to US Corporate Taxes. I imagine it's not based on which exchange the stocks are traded. For example, Toyota Motors (TM) is on the NYSE, but is a Japanese Based Company. From what I researched, it seems like they may be subject to US Corporate Taxes on the income they generate in the US.

I'm not sure how good companies are at using "Hollywood Accounting" whereby they can claim losses on specific projects that are otherwise profitable, for corrupt reasons. For example, if the US Corporate Tax rate increases under Biden, can Toyota decide that X Billion dollar expense against their US income, even though it was not really a US-income-stream based expense?

I imagine a company like Alibaba would not be subject to US Tax rates at all.

I am not a fan of indexing anymore, so I'm looking to hand pick about a dozen stocks to include in 1% amounts in my portfolio. 1% of my stock allocation, that is. I have already picked up some international stocks like Nestle and Reckit Benckiser although I imagine they are paying some US corporate taxes since they do business here.

I also wonder if it means companies like JNJ that do only a portion of their business here are only partially subject to US Tax Rates and thus it won't impact them as much.

I think I wrote here at some point that someone had told me decades ago that the IRS has a permanent office at General Motors to closely monitor all they do tax-wise?

The IRS are no dummies. They know all the tricks and keep a close eye on multi-nationals and the tricks they try to pull.

Any income derived from operations in the United States is subject to Federal taxes, both a corporate and personal level.

That said....there is a lot of tax evasion going on as documented in this excellent book...

https://www.amazon.com/Perfectly-Legal- ... tries%2A=0


Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else Paperback – January 4, 2005