The problem lies in the fact that the US is all about free trade. They don't want to do that. You can't have it both ways.
Situation one: I'm a US company, expanding abroad. I acquire foreign competitors, and build a global company. I'm taxed on every dollar (profit), since I'm a US (holding) company.
Situation two: I'm a European company, expanding abroad. I acquire a US competitor, and build a global company. Since I'm a foreign company with foreign shareholders, the US can't tax my global income (obviously)
This means a US company will be at a significant disadvantage to a UK/Swedish/Belgian company competing in the same market, because, even if their results are exactly the same, their after tax income will be significantly less.
This also means that a US company bidding for a US competitor will be able to pay less than a foreign company buying up US companies, because they can achieve less/lower (tax) synergies.
Situation one: I'm a US company, expanding abroad. I acquire foreign competitors, and build a global company. I'm taxed on every dollar (profit), since I'm a US (holding) company.
Situation two: I'm a European company, expanding abroad. I acquire a US competitor, and build a global company. Since I'm a foreign company with foreign shareholders, the US can't tax my global income (obviously)
This means a US company will be at a significant disadvantage to a UK/Swedish/Belgian company competing in the same market, because, even if their results are exactly the same, their after tax income will be significantly less.
This also means that a US company bidding for a US competitor will be able to pay less than a foreign company buying up US companies, because they can achieve less/lower (tax) synergies.
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