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 § 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:
“We are such docile creatures, normally, that it takes a virus to jolt us out of life’s routine. A couple of days in a fever bed are, in a sense, health-giving; the change in body temperature, the change in pulse rate, and the change of scene have a restorative effect on the system equal to the hell they raise.”
—E.B. (Elwyn Brooks)
“As for charity, it is a matter in which the immediate effect on the persons directly concerned, and the ultimate consequence to the general good, are apt to be at complete war with one another.”
—John Stuart Mill (1806–1873)
“The courage of a great many men, and the virtue of a great many women, are the effect of vanity, shame, and especially a suitable temperament.”
—François, Duc De La Rochefoucauld (1613–1680)