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Discussion

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Foreign Country- For Moving
Chapter I Discussion
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Date
Institution Affiliation

There are many factors that a business person considers before starting any business. The location of the business depends on where one will gather the most profits. The profits are determined by the market share, product lifecycle, economic growth, brand image, competition, and exchange rate. One must also consider the laws, rules, and regulations that govern the business. Hence, if it is legal, one is free to put up their businesses where the conditions are most favorable. The U.S government has seen most of its companies change their citizenship to minimize the tax rates being charged. The country imposes a 35% tax rate which is the highest amongst all developed countries (Merle, & Merle, 2018). This has enabled them to save more profits. Hence, I would support the companies moving overseas to pay fewer taxes.
Apple Company which is one of the companies moving overseas to avoid the massive taxes made a profit of $43 billion in 2015 which was an increase from $157 billion in 2014 to $200 billion. The unrepatriated income of Pfizer also increased from $175 billion to $193 billion (Merle, & Merle, 2018). This is due to the reduced corporate tax in foreign countries. Businesses spend a lot of money in manufacturing their products as well as paying their employees. They also face competition from other companies. Therefore, if the taxation is substantial, their profits are low. They may even be forced to sell their products at a higher price which would most likely reduce their number of customers.

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Hence, avoiding the heavy taxation remains as their best option.
In conclusion, moving overseas to pay less tax has helped most firms to save billions of money. However, every single dollar spent outside the country affects the economy of U.S. It means fewer infrastructures, less affordable health care, and low economic growth. Hence, the government should regulate the taxation rate to ensure that companies do not change citizenship.

References
Merle, R., & Merle, R. (2018). How U.S. companies are avoiding $695 billion in taxes. Washington Post. Retrieved 16 January 2018, from https://www.washingtonpost.com/news/business/wp/2016/03/04/why-u-s-companies-wont-bring-2-4-trillion-in-foreign-profits-back-home/?utm_term=.3250af2569bb

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