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:
“Considered physiologically, everything ugly weakens and saddens man. It reminds him of decay, danger, impotence; it actually reduces his strength. The effect of ugliness can be measured with a dynamometer. Whenever anyone feels depressed, he senses the proximity of something “ugly.” His feeling of power, his will to power, his courage, his pride—they decline with ugliness, they rise with beauty.”
—Friedrich Nietzsche (1844–1900)
“Living more lives than one, knowing people of all classes, all shades of opinion, monarchists, republicans, socialists, anarchists, has had a salutary effect on my mind. If every year of my life, every month of the year, I had lived with reformers and crusaders I should be, by this time, a fanatic. As it is I have had such varied things to do, I have had so many different contacts that I am not even very much of a crank.”
—Rheta Childe Dorr (1866–1948)
“The whole theory of modern education is radically unsound. Fortunately in England, at any rate, education produces no effect whatsoever. If it did, it would prove a serious danger to the upper classes, and probably lead to acts of violence in Grosvenor Square.”
—Oscar Wilde (1854–1900)