The Bush administration blamed high, complex US corporate taxes for a wave of companies relocating headquarters offshore and urged Congress to fix the tax code without damaging the economy.
"I don't think anyone wants to wake up one morning to find every US company headquartered offshore because our tax code drove them away and no one did anything about it," Treasury Secretary Paul O'Neill said Friday in a written statement.
"This is about competitiveness and complications in the tax code that put US-based companies out of step with their foreign competitors,'' he said.
In a 31-page report issued late Friday, the Treasury Department identified many ways US companies can cut their taxes -- from both foreign and US operations -- by setting up a paper parent in Bermuda or another tax haven.
Lobbyists say the change only affects taxes on US firms' foreign income, but the Treasury report said an immediate issue for Congress is ensuring that taxes from US income aren't dodged.
Ingersoll-Rand Inc, Tyco International, Cooper Industries and The Stanley Works are among the high-profile firms that have nominally reincorporated in Bermuda or are in the process of doing so. Stanley, the toolmaker longed based on Connecticut, has estimated the move will save it US$30 million a year in taxes.
The Treasury's acting chief of tax policy, Pam Olson, said Congress must take care not to take actions that "undermine the fundamental strength of our economy."
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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