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:
“The cities of the world are concentric, isomorphic, synchronic. Only one exists and you are always in the same one. It’s the effect of their permanent revolution, their intense circulation, their instantaneous magnetism.”
—Jean Baudrillard (b. 1929)
“The second [of Zeno’s arguments about motion] is the one called “Achilles.” This is to the effect that the slowest as it runs will never be caught by the quickest. For the pursuer must first reach the point from which the pursued departed, so that the slower must always be some distance in front.”
—Zeno Of Elea (c. 490–430 B.C.)
“Art should exhilarate, and throw down the walls of circumstance on every side, awakening in the beholder the same sense of universal relation and power which the work evinced in the artist, and its highest effect is to make new artists.”
—Ralph Waldo Emerson (1803–1882)