A reader of my recent blog about the Obama Administration’s international tax proposals sounded a note of exasperation that’s becoming increasingly familiar when corporate tax pros discuss the issue: “Why NOT bring in money from other countries? What’s wrong with putting a McDonald’s in India? It brings money into the organization as a whole, which means they can pay higher salaries,” argued Ralph Comstock.

Sound points, and Ralph might have added that there’s precious little evidence that the President’s proposals will do what they’re intended to do, i.e., increase employment in the United States by curtailing activity in lower-tax jurisdictions abroad.

The day after my post, the Tax Foundation released a report arguing that the Administration’s program will backfire by undermining the competitiveness of U.S. companies, and that it’s taking the U.S. in exactly the opposite direction of most tax authorities around the world. more

A $15 billion jobs-creation package may be heading to a final vote in the Senate today after gaining a measure of support from some Senate Republicans Monday. The linchpin of the bill is a provision that lifts part of the employers’ payroll tax for companies that hire unemployed workers this year, together with a $1,000 credit for keeping those employees on the books for a year.

Critics of the payroll tax deduction have claimed that it might actually slow job growth if businesses decide to lay off current workers and hire the unemployed (see, for example, this post at futureofcapitalism.com).

The Congressional Budget Office doesn’t agree. more

With the future of the tax extenders package still uncertain, lobbyists are scrambling to make sure the R&D tax credit gets attached to a bill — any bill — and soon. The National Association of Manufacturers, the Information Technology Industry Council, the Business Roundtable, and the R&D Credit Coalition are all out in force on the Hill right now.

The keen interest of groups like those first two explains why certain cynical types — well, maybe just me actually — have referred to the R&D credit as the Full Employment for Scientists and Engineers Act. more

Companies’ biggest tax worry for 2010?

The burden on their international operations.

According to a survey published this week by Washington, D.C.-based law firm Miller & Chevalier, close to 40 percent of corporate executives and managers say that taxation of their company’s global activities is their top business tax concern. (About 47 percent of the respondents were directors or managers of tax.) more

President Obama’s 2011 budget contains a proposal to make the R&D tax credit permanent. That may be wishful thinking — he proposed the same thing last year, with no luck — but the chances are good that this key tax break will be renewed again for this year. Hugely popular on both sides of the aisle, the credit has been extended every year since its original expiration date in 1986 (with the exception of July 1995 to June 1996).

While we’re sitting around with fingers crossed waiting for Congress to decide, this might be a good time for companies that are unfamiliar with the credit to take a look at what it offers. Misconceptions abound; here are five of the most common. more