How Will The 15% Global Tax Affect The U.S.?

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

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Transcript:

Easan Arulanantham:

“So, earlier today, there’s some agreement on the 15% Global Tax. Could you explain what that is, and what it could mean for the US?”


Tom Vaughan:

Oh, yeah, this just came out literally just before the show started. I was reading an article on this. It’s been talked about for a while now. So the concept is, and this is very different, and I think this is very exciting, actually. The concept is that companies, and they’ve now said big companies so, small companies will be excluded from this, companies will have to pay a minimum of 15% tax in the country where the sale was generated. So that think about this for a minute. So if you’re a big company, and you sell to US customers, but you have plants in Ireland. Ireland has a much lower tax bracket than US. Then through a series of maneuverings might be able to claim a lot of that revenue in Ireland at this lower tax rate. And of course, then the US, who is created this big consumer base, isn’t getting the tax dollars for that. And so what that’s a huge deal. So think about the US is the number one consumer country in the world. And we have this scenario where we’ve got all kinds of money floating outside the country paying taxes and other tax havens. And now they’re going to make it an even 15%. So even Ireland is 15%. That would be unbelievable, because it would bring in, I think, a huge amount of money into the US Treasury, in new tax revenues from these companies. And it It creates a scenario where you’re not…

Janet Yellen has been talking about “a race to the bottom.” Where eventually there’s a country out there with a 3% rate, and everybody’s got their business there. And so I think they’ve got agreements with basically 95% of the Gross Domestic Product of the world, in the agreement right now, and it’s taken a while to get a couple of these countries to sign on. I don’t know what the next step is honestly, because it just came out. I don’t know the details, and they haven’t mentioned any yet either. I think the conceptually, they’re trying to work on this from a high level standpoint, and then we’ll get some more of the details that come out for how that works. But you have an awful lot of big companies here in the US, and abroad, selling a lot of products to US consumers, that are not paying taxes at a proper level, in my opinion, here in the US. And so that would change with this, in my opinion, from what I’ve read. So I actually think it’s a really exciting arena. We’ll have to see how it plays out.

But there is one part of it, there’ll be a little interesting in that it is a possible increase in taxation to some of these companies. And that affects stock price, right? So we’ll have to see what that means, right? So if a company was paying 6%, and now they’re paying 15%, that’s less… earnings, because of the higher tax rate. And higher tax rates aren’t awful for the stock market. If you look back over a period of time, they can be short term problems until things get worked out. But it is something to consider as far as what impact that might have on the stock market. But overall, from what I’ve read, I think it’s a really great concept. It would solve a lot of problems that have been happening.

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
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  • thinkpipes®
  • Right Capital
  • YCharts, Inc.