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 effect of liberty to individuals is that they may do what they please: we ought to see what it will please them to do, before we risk congratulations.”
—Edmund Burke (1729–1797)
“This is the great truth life has to teach us ... that gratification of our individual desires and expression of our personal preferences without consideration for their effect upon others brings in the end nothing but ruin and devastation.”
—Hortense Odlum (1892–?)
“As soon as I suspect a fine effect is being achieved by accident I lose interest. I am not interested ... in unskilled labor.... The scientific actor is an even worker. Any one may achieve on some rare occasion an outburst of genuine feeling, a gesture of imperishable beauty, a ringing accent of truth; but your scientific actor knows how he did it. He can repeat it again and again and again. He can be depended on.”
—Minnie Maddern Fiske (1865–1932)