Americans and Cubans Approaches to the Platt Amendment

The U.S.’s relationship with Cuba has been arduous and stained with mutual suspicion and obstinateness, and the repeated U.S. interventions. The Platt agreement and Castro’s rise to power, served to introduce the years of difficulty to come, while, the embargo the U.S. placed on Cuba, enforced the harsh feelings. The two major events that caused the most problems were the Bays of Pigs and Cuban Missile Crisis. In 1903, the U.S. published the Platt Amendment, which was a set of guidelines for Cuba to follow (Blight 165). The Platt amendment was named after Senator Orville Platt of Connecticut. The U.S. had been occupying Cuba since the Spanish American war in 1898, and Cuba wanted them out, so the U.S. set up eight rules for Cuba to agree†¦show more content†¦The U.S. and the presidency were embarrassed and Castro was made wary of future invasions because of this battle (Blight 126). This triggered a speech by Fidel Castro, on December 2, 1961, where he states that Cuba is adopting communism. As a counter, the U.S. imposed an embargo against Cuba only two months later. The Soviet Union, in 1962, was rushing to catch up with the U.S. in the arms race, (arms being a metonymy for all military weapons), but their missiles were lacking in power. If activated, they could only reach Europe and would fall short of the U.S. Unfortunately, in April the Soviet Union placed their missile on Cuba, only 90 miles from the U.S.! Coincidently, Castro was paranoid of a second attack and was looking for a defense mechanism, so he jumped at the chance to have the Soviet Union’s missiles on his island directed toward the U.S. Therefore, that summer Cuba and the Soviet Union worked together to install missiles in Cuba. On October 15, 1962, a photograph proved the existence of the missile being constructed on Cuba, and for the U.S., the nightmare began. After a week of intense debating with his closest advisors, President Kennedy made a decision. He decided to impose quarantine, of sorts, around Cuba to ensure there were no more missiles arriving. The Soviet Union demanded theShow MoreRelatedAmerica s New Sense Of World Power758 Words   |  4 PagesAbby Thompson Period 5 HOTA Paper After the years of the American Civil War, America embarked on a manifest destiny, 2.0. America decided they wanted to expand their territory across the waters. There were many approaches that were suggested by previous presidents, all with the same goal: World Dominance. The Big Stick idea was brought to light from President Theodore Roosevelt. The plan reflected many of the same impulses that were motivating domestic reforms that were taking place in America. HeRead More Cuba and Tourism Essay3446 Words   |  14 Pagesincome between Cubans and their neighbors to the north. The dollar-based society a tourist economy creates is deeply stratified, and conflicts with the ideals of the Castros socialist revolution. Yet in recent years it has proven to be a good source of hard currency for the struggling economy, and efforts are being made to expand the industry. By promoting tourism, Cuba is taking advantage of its beauty, but is opening itself to unfortunate exploitation. The Playground for North Americans In hisRead MoreThe Consequences Of The Spanish American War Essay2078 Words   |  9 Pagesthe USS Maine in Havana harbor on February 15, 1898. After weeks of fighting on both land and sea, American finally triumphed in both Cuba and the Philippines, and on December 10th, the two sides signed the Treaty of Paris. Even after the Senate ratified the Treaty of Paris in February of 1899, however, the effects of the conflict were far from over (Lawson 2-6). The consequences of the Spanish-American War caused the United States to expand its influence on an international level, creating a more externallyRead MorePresident Franklin Roosevelt And The Great Depression3901 Words   |  16 PagesRoosevelt believed that America has a significant role to play for the rest of the world, and this was not surprising considering his diplomatic political approaches. All through most part of the 1930s, the persistence of the economic woes that faced the United States, as well as the existence of an is olated streak among a good number of Americans and some significant progressive political allies, forced FDR to adjust his internationalist sails. However, the attack by Japan on Pearl Harbor broughtRead MoreMarketing Mistakes and Successes175322 Words   |  702 PagesD program to do so. With its search engine, it raised advertising to a new level: targeted advertising. In so doing, it spawned a host of millionaires from its rising stock prices and stock options and made its two founders some of the richest Americans, just under Bill Gates and Warren Buffett. How did they do it? Starbucks is also a rapidly growing new firm—not as much as Google, but still great—and a credit to founder Howard Schultz’s vision of transforming a prosaic product, coffee, into

American Online Case Study Free Essays

Q1: The major explanations to the reason why AOL was so successful in the commercial online industry comparing to its competitors CompuServe and Prodigy are as follows:  · AOL offered the unique and board range of features such as Online Community, Computing and the like, so their services are relatively differentiated  · AOL kept good relation with its customer because of the easy access to AOL’s online service which only required to have a personal computer, a telephone line, and a computer, and also reflected in AOL’s rate structure which was the easiest for consumers to understand and anticipate, relative to its competitors  · The bargaining power of AOL with supplier is achieved by making strategic partnership with American Express, and so on; and completing its acquisitions of Internet software developers, along with AOL’s growing membership base, in order to strengthen its new interactive services industry by means of pursuing a number of initiatives .  · The threat of new enchant is low, since there is not much service providers, like AOL, acted as middlemen between thousands of content providers and millions of customers, which provided lucrative profits prior to 1995. Q2: There are several crucial changes happened in the commercial online industry in the year of 1995 and after:  · With the advent of the Internet World Wide Web and the entrance of Microsoft Network, content providers had substitution distribution channels that offered greater control over their products  · Under the background that the migration of proprietary services and content to Web sites, the exclusive offerings of AOL was declining, thus it was likely reduce the market share of AOL in the industry and subsequently posed negative effect on its profitability  · Since everyone with a PC was his/her own publisher, customers would sign up for an Internet on-ramp service provided by other companies and they were tend to use the other companies’ browsing software to surf the world’s database, resulted in the situation that content providers were starting to make use of these distribution channels. We will write a custom essay sample on American Online Case Study or any similar topic only for you Order Now Q3. Based on the annual reports and footnotes, AOL’s accounting policy was to capitalize subscriber acquisition costs prior to 1995, which in my view, was not likely to be justified in that period based, for the uncertainty whether ts customers could migrate to the internet still remained since this would probably affect the growth in its subscriber and the profit of its services, although the CFO of AOL attributed the choice to the explanation that the period over which the revenue would be received was matching with the timing the expense, yet there was a rising gap between the reported income and its tax income, except for a big change in its service quality, these two numbers bear a consistent relationship to each other. Q4. The company should shorten the length of amortisation of the acquisition costs instead of extending it. The reason of this assertion are based on the life cycle of the industry which was supposed to be relatively short and because of the constantly cha nging environment of the commercial online industry with huge uncertainties, which was likely to require conservative accounting policy to reflect the financial figures so as to better match revenues with expense. Nevertheless, AOL even extended the amortization period for its subscriber acquisition cost from about 15 months to 24 months, which made it would be tend to face big risks when customers switched to other online service under uncertainty. Therefore, the company’s response seems to be inconsistent with my view. Q5. If AOL followed the policy of expensing subscriber acquisition outlays rather than capitalizing them, there would be a huge amount of subscriber acquisition costs, leading to a comparatively decreasing profit and increase operating loss in the income statement as well as lower equity in the balance sheet for the last same period or compared to its peers, which might lose the attractive looking of the accounting figures when it was eager to raise money from the public market so as to pay its bill. How to cite American Online Case Study, Free Case study samples

Taxation of Intellectual Capital

Question: Discuss about the Taxation of Intellectual Capital. Answer: Introduction: Following assignment presents the tax consequences under the Taxation Government of Australia regarding fringe benefit tax liability for ABC Limited in compliance to Fringe Benefit Tax Assessment Act (FBTAA), 1986 and Taxation Ruling 97/17 of Income Tax Assessment Act (ITAA), 1997. Additionally, the assignment represents allowable deduction on capital expenditures on depreciable asset as per division 40 ITAA 1997. 1: Treatment of Fringe Benefits Tax according to the provisions of TR 97/17 ITAA 1997 and FBTAA 1986 in the hands of ABC Pty Ltd for the year ending 31st March 2015. FBT is calculated on the gross- taxable value of the benefits as measured under the two types- higher gross up rate (type 1) and lower gross up rate (type 2). Higher gross up rate, for the taxpayers who pay Goods and Services tax (GST) on the cost of benefits entitled to claim GST credit. Whereas lower gross up rate is for taxpayers not entitled to claim GST credit on the benefits since the cost is GST free. Whereas certain benefits are exempted and some are taxable if their value exceeds the threshold limits specified under the Act (Hodgson and Pearce, 2015). Accordingly, tax consequences are as follows: Salary $300,000: Remuneration is taxable in the hands of the employee, Mr. Alan for the assessment of income tax. ABC Limited is not liable to pay any FBT for the salary payment as it falls under the exempted Fringe Benefit category (Soled and Thomas, 2015). Payment of mobile phone bill: The allowance paid by ABC Limited $220 per month, inclusive of GST for the phone bill which Alan uses for work purpose only. ABC Limited is liable to pay FBT on such allowance @ 47 % on the taxable value. Also, provided that the entity is entitled to claim input tax credits on the payments inclusive of GST hence, Higher Gross- up rate will be used for taxable value (Pearce and Hodgson 2015). Phone bill (i) $ 2,640.00 ($220.00* 12 months) Higher Gross up rate (ii) 2.1463 Taxable value (i* ii) $ 5,666.232 Tax on Fringe Benefit @ 47% on $ 5,666.232 $ 2,663.129 (Subject to the input tax or GST credits) Assumed that the payment per month is at the beginning of the year, therefore converted the same to annual payment. Payment of Alans childrens education fees: ABC Limited has paid $20,000 annually, as education fees (GST free). Therefore, lower gross up rate will be applicable for the computation of taxable value (Shields and North-Samardzic, 2015). Education fees (GST free) (i): $ 20,000.00 Lower gross- up rate (ii): 1.9608 Taxable value (i* ii) $ 39,216.00 Tax on Fringe Benefit @ 47% on $ 39,216.00 $ 18,431.52 Mobile phone handset: The entity provided a mobile phone handset to Alan worth $ 2,000 including GST. As contained in the provisions of ITAA 1997 and FBTAA 1986, if any benefit used by the employer work purpose only, then such allowance shall fall into the category of exempted Fringe Benefits (Soled and Thomas, 2015). In this case it is not clear whether the handset provided is for work purpose or for personal use. Therefore, the taxability consequence provided as per the circumstances: Option i) benefit for work purpose only: in this case, tax liability for ABC Ltd is nil as the benefit falls into the exempted fringe benefit category (Pearce and Hodgson 2015). Option ii) benefit for personal use: in this option, ABC Ltd is liable to pay FBT on the value derived by considering higher gross up rate as the cost is inclusive of GST (Pearce and Hodgson 2015). Cost of the handset (i) $ 2,000.00 Higher Gross up rate (ii) 2.1463 Taxable value (i* ii) $ 4,292.60 Tax on Fringe Benefit @ 47% on $ 5,666.232 $ 2,017.52 (Subject to the input tax credits or GST credits) Dinner at year-end: ABC Ltd had organized a dinner for its employees and their partners at the end of the financial year. As per ITAA 1997, this expenditure falls into the entertainment by way of food and drink allowance. Hence, ABC is liable to pay fringe benefit tax on the total cost (Shields and North-Samardzic, 2015). Computation of FBT for the year ended 31st March 2015 Total cost of dinner including GST (i) $ 6,600.00 Higher Gross up rate (ii) 2.1463 Taxable value (i* ii) $14,165.58 Tax on Fringe Benefit @ 47% on $ 14,165.58 $ 6,657.82 (Subject to the input tax credits or GST credits) In case ABC Ltd had only 5 employees then the answer to (a) would remain same. It is because the liability of tax on allowances provided to employees does not depend on the number of employees but it depends on the nature of the benefit and purpose of the use of benefit as specified under the ITAA 1997 and FBTAA 1986 (Shields and North-Samardzic, 2015). Hence, the tax liability consequences for the ABC Company would be same as derived in the solution (a). If the clients of ABC Limited also attend the year-end dinner along with the employees then there would be different treatment of tax liability. In this case, the expenditure on dinner would not fall into the category of fringe benefit, as it is difficult to segregate the cost allocation of dinner between employees and clients (Shields and North-Samardzic, 2015). Hence, the cost of dinner would fall into general deduction category while computation of taxable income of the company and the tax on fringe benefit as derived in solution (a) $ 6,657.82 would be a saving for ABC Ltd. 2: Division 40 on Capital allowances of ITAA 1997 serves the objects and principles for deduction on capital expenditure. According to division 40, deduction on capital expenditure is allowed on depreciating asset, which has limited life expectancy. Further, the division under section 40- 365 also provides the provisions on replacement of assets for determination of costs and allowable deductions which specifies that any amount for the sale of old depreciating asset would be allowed as tax deduction only if that old asset was in use or kept ready for use (Thomson, 2015). The tax consequences for Rubber Co. as per Division 40 ITAA 1997 are as under: Cost of machine on 1.1.10 (inclusive of GST) $ 1,100,000.00 Estimated effective life 10 years Accumulated depreciation for 4 years till 1.1.14 $ 440,000.00 (1,100,000/10* 4 years) Net book value on 1.1.14 $ 660,000.00 Hence, deductible allowance will be accumulated depreciation $ 440,000 in the year 2014 for the capital expenditure $ 1,100,000.00 made in the year 2010. On the replacement of the machinery on 1.01.14, the tax consequence is as under: Net book value of the old machinery on 1.01.14 $ 660,000.00 Disposal value (including GST) on 1.01.14 $ 330,000.00 Loss on disposal of original machine $ 330,000.00 ($ 660,000.00- $ 330,000.00) Cost of new machine (including GST) on 1.01.14 $2,200,000.00 Deduction allowed on the capital expenditure $ 330,000.00 Net reportable capital cost of new machine $ 1,870,000.00 Rubber Co. is allowed to claim tax deduction in respect of the new machine is equal to the amount of loss incurred from the sale of old machine $ 330,000.00 as it was already in use. Hence, net capital expenditure in the financial year 2014 would be $ 1,870,000.00. Conclusion: The assignment has been dealt with taxation inference on two different aspects of ITAA1997 i.e. tax liability on fringe benefit and deductible allowance on capital expenditure. In the first solution, ABC Limited is liable to pay tax on certain allowances provided to Alan while for some allowance company was eligible to claim exemption. In the second requirement, Rubber Co. is eligible to claim tax deduction for the capital expenditure incurred on machinery in the year 2010 in terms of depreciation and subsequently, on replacement in the year 2014 at an amount equal to the loss on disposal of old machine. Reference List: Burke, K.C., 2015. Comments on'Taxation of Intellectual Capital:'Better than Consumption-Tax Treatment?. Hodgson, H. and Pearce, P., 2015. TravelSmart or travel tax breaks: is the fringe benefits tax a barrier to active commuting in Australia? 1.eJournal of Tax Research,13(3), p.819. Pearce, P. and Hodgson, H., 2015. Promoting smart travel through tax policy.Tax Specialist,19(1), p.2. Prebble, J. and McIntosh, H., 2015. Is Expenditure to Assess the Feasibility of Constructing or Acquiring Capital Assets Deductible?.Available at SSRN 2583341. Rahi, M. and Islam, S., 2015. Exploring capital expenditure planning process tracking in Robi Axiata Limited. Shields, J. and North-Samardzic, A., 2015. 10 Employee benefits.Managing Employee Performance Reward: Concepts, Practices, Strategies, p.218. Soled, J.A. and Thomas, K.D., 2015. Revisiting the Taxation of Fringe Benefits.Washington Law Review, Forthcoming. Thomson, R., 2015. The Effectiveness of RD Tax Credits.Review of Economics and Statistics, (0).