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:
“I care not by what measure you end the war. If you allow one single germ, one single seed of slavery to remain in the soil of America, whatever may be your object, depend upon it, as true as effect follows cause, that germ will spring up, that noxious weed will thrive, and again stifle the growth, wither the leaves, blast the flowers, and poison the fair fruits of freedom. Slavery and freedom cannot exist together.”
—Ernestine L. Rose (1810–1892)
“No being exists or can exist which is not related to space in some way. God is everywhere, created minds are somewhere, and body is in the space that it occupies; and whatever is neither everywhere nor anywhere does not exist. And hence it follows that space is an effect arising from the first existence of being, because when any being is postulated, space is postulated.”
—Isaac Newton (1642–1727)
“The effect of studying masterpieces is to make me admire and do otherwise.”
—Gerard Manley Hopkins (1844–1889)