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:
“To get time for civic work, for exercise, for neighborhood projects, reading or meditation, or just plain time to themselves, mothers need to hold out against the fairly recent but surprisingly entrenched myth that “good mothers” are constantly with their children. They will have to speak out at last about the demoralizing effect of spending day after day with small children, no matter how much they love them.”
—Wendy Coppedge Sanford. Ourselves and Our Children, by Boston Women’s Health Book Collective, introduction (1978)
“The effect of a good government is to make life more valuable; of a bad one, to make it less valuable.”
—Henry David Thoreau (1817–1862)
“It has never been in my power to sustain ... I can pass swiftly from one effect to another, but I cannot fix one, and dwell on it, with that superb concentration which seems to me the special attribute of the tragic actress.”
—Ellen Terry (1847–1928)