Effect
The overall effect of the provision is to encourage domestic production. While this might seem to be a quite different goal than that of the provision it replaced, in theory, increased domestic production should indirectly lead to increased exports as the domestic demand is satisfied. While the QPAI deduction constitutes the United States government forgoing revenue which would otherwise be available to it, it should not run afoul of the same WTO rules because the availability of the deduction is not conditioned on export performance.
Every business in the manufacturing sector, whether small or large, should consider the manufacturing deduction under IRC ยง 199. While section 199 comes with a complex set of rules, it nonetheless represents a valuable tax break for businesses that perform domestic manufacturing and certain other production activities. However, businesses should weigh its benefit against the cost of calculating and supporting it. For tax years beginning in 2010 and thereafter, the benefit is fully phased in at 9% of income from qualified production activities, so more businesses may now find the effort worthwhile.
Read more about this topic: Qualified Production Activities Income
Famous quotes containing the word effect:
“What has been the effect of [religious] coercion? To make one half the world fools, and the other half hypocrites. To support roguery and error all over the earth.”
—Thomas Jefferson (1743–1826)
“Man is endogenous, and education is his unfolding. The aid we have from others is mechanical, compared with the discoveries of nature in us. What is thus learned is delightful in the doing, and the effect remains.”
—Ralph Waldo Emerson (1803–1882)
“I would define the poetic effect as the capacity that a text displays for continuing to generate different readings, without ever being completely consumed.”
—Umberto Eco (b. 1932)