Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Another Corporate Giant Is Leaving the U.S. – What This Means for You

Companies / Corporate News Feb 04, 2016 - 05:48 PM GMT

By: Casey_Research

Companies

By Nick Giambruno

Try getting in shape for a marathon on an all-McDonald’s diet...

You wouldn’t be surprised to come in dead last. After all, you didn’t put in much effort. Actually, you went out of your way to make yourself less competitive. So you would expect to lose.


It’s just common sense.

But this is exactly what U.S. politicians have been doing for years: passing tax laws that sabotage the country’s global economic competitiveness.

As you can see in the chart below, the U.S. has the highest effective corporate income tax rate in the developed world. This is a major reason why the U.S. is lagging behind in the global economic marathon.

These “worst in the developed world” tax laws are clearly hurting the global competitiveness of U.S. companies.

Oppressive U.S. corporate tax liabilities make doing business similar to trying to swim in a lead jacket. So it’s no surprise that an increasing number of productive people and companies are trying to rip off that lead jacket so they can stay afloat.

At this point, it’s more than just a trickle. It’s an increasing trend.

Putting the Beast on a Diet

Over the past couple of years, dozens of high-profile U.S. companies have moved abroad to lower their corporate income tax rate. No surprise, this makes them more globally competitive.

Medical manufacturer Medtronic moved to Ireland.

Telecommunications giant Liberty Global moved to the UK.

DE Master Blenders—the tea and coffee arm of Sara Lee—moved to the Netherlands.

Omnicom Group, the largest U.S. advertising firm, also moved to the Netherlands.

Burger King moved to Canada.

And these are just a few of the most prominent companies breaking the shackles.

The strategy these companies use is called an inversion. It’s where a U.S. company merges with a foreign company in a country with lower corporate taxes and reincorporates there.

Meddling politicians and the mainstream media like to howl and shriek about inversions. They say the practice is “unpatriotic” or “un-American.” That’s nonsense. The fact is, inversions are perfectly legal. Nothing in the current incarnation of the U.S. Tax Code prohibits them.

Chuck Grassley, a Republican senator from Iowa has said, “These expatriations aren’t illegal. But they’re sure immoral.”

I beg to differ.

Why would anyone give the thieving bureaucrats in DC a penny more than they legally have to?

As far as I’m concerned, there is nothing ethically or morally wrong with inversions. Moreover, they are vital for starving the Beast.

I say, the less money available to politicians and bureaucrats, the better. It means they have less to spend on mischief like provoking wars or bribing voters with more welfare.

Johnson Controls is the latest high-profile company to put the Beast on a diet.

Johnson Controls is a Milwaukee-based $23-billion manufacturing giant. On Monday, the company announced plans to merge with Tyco International and reincorporate in Ireland.

The move will save the company over $150 million in taxes every year.

It’s really a no-brainer.

Neither Johnson Controls nor any other U.S. company has an obligation to fill government coffers. But they do have an obligation to their shareholders to avoid waste. That’s why they’re moving to Ireland, away from the worst corporate tax environment in the world.

What Comes Next…

Contrary to government propaganda, the companies trying to stay competitive aren’t the villains in this story.

The villains are the wasteful politicians who passed the “worst in the developed world” tax laws in the first place.

Right now, it is highly unlikely politicians will reduce the onerous U.S. corporate tax burden. Given the current political dynamics—ramped-up spending on welfare and warfare policies, as well as an “eat the rich” mood—taxes have nowhere to go but up. This means the corporate exodus will continue.

It’s never good when a country drives away its most productive companies and people. It’s making the U.S. economy even more fragile.

These foolish policies will actually make the U.S. government more financially desperate. That’s because they will ultimately result in fewer tax dollars.

Like most governments that get into financial trouble, I think the U.S. will keep choosing the easy “solution”…money printing on a massive scale.

This has frightening implications for your financial security. These politicians are playing with fire and inviting a currency catastrophe. This is a big reason why I think everyone should own some gold.

Gold is the ultimate form of wealth insurance. It has preserved wealth for millennia through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.

But, if you want to be truly “crisis-proof”, there is more you can do...

Most people have no idea how bad things can get when an economy collapses, let alone how to prepare…

How will you protect yourself in the event of a crisis? This just-released video will explain what you need to know to get started. Click here to watch it now.

The article Another Corporate Giant Is Leaving the U.S. – What This Means for You was originally published at caseyresearch.com.
Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules