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Government Pensions Make Big Bucks Off 'Corp Deserters'
Fox Business News ^ | 08/06/2014 | By Elizabeth MacDonald

Posted on 08/06/2014 7:02:38 AM PDT by SeekAndFind

It’s not just fat cat hedge funds, banks or Wall Street investment companies that benefit when U.S. companies cut their tax bills by moving their headquarters overseas via mergers with foreign concerns.

More than a dozen state government pension funds that run retirement accounts for government workers like teachers, cops and firemen own big chunks in these “corporate deserters,” too.

Five U.S. companies merging with overseas concerns have big state government pension investments amounting to nearly $2 billion, based on data provided by Richard Peterson, senior director at S&P Capital IQ.

But you don’t hear about government pension investments in the criticism about this tax-cutting move from Democrats in Congress and the president, who have repeatedly called companies seeking to reduce their high U.S. corporate taxes “corporate deserters” who are moving jobs overseas, destroying the middle class and ruining the U.S. corporate tax base (the government estimates $20 billion over 10 years is at stake here).

The OECD says the U.S. corporate tax rate is the highest in the world, higher than what many European companies pay, which economists note is cutting into U.S. job growth. That’s why there is a bipartisan push for U.S. corporate tax reform.

To be sure, $2 billion is a drop in the ocean of government pension fund assets. The current value of Calpers’ assets alone is estimated at $301 billion. But the corporate inverter stakes are part of the controversy of D.C. pressuring Wall Street fat cats while overlooking discomfiting government pension investments.

State government workers have invested in several corporate inverters, including: Mylan Labs, which is buying Abbott Laboratories’ non-U.S. generic drugs business for $5.3 billion, with the new entity based in the Netherlands; Walgreen Co, (WAG) which is buying a $6.7 billion stake in Switzerland’s Alliance Boots

(Excerpt) Read more at foxbusiness.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: corporateexpats; corporations; pensionfunds; pensions; taxes; taxinversion

1 posted on 08/06/2014 7:02:38 AM PDT by SeekAndFind
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To: SeekAndFind
A pity to see Fox Business is even shilling for Obama’s 2014 version of the “Wealthy 1%” “Occupy Wall Street” agitprop (conveniently only an issue right before an election). The entire premise that corporations have some moral duty to fund Obama’s socialist boondoggles is ridiculous, the only responsibility they have is to their shareholders, and if moving to a tax haven raises the share price more power to them.
2 posted on 08/06/2014 7:13:24 AM PDT by apillar
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To: SeekAndFind
The sad by product of this envy driven desire to tell business that they must continue paying the highest corporate taxes in the world is no one asks why a business would want to go to the trouble of uprooting their headquarters and move.

Most Americans are unaware of how difficult it is for a USA citizen to open a bank account overseas. Businesses have a little easier time of it, but the employees who get transferred to the new overseas headquarters see a huge amount of problems they have to deal with. Also, the employees are taxed twice on their earnings; once, by the country they are a resident of; secondly, be the USA. The problems for the employees are problems for the business because they will lose some of their top talent when they make a move.

IOW, the USA has created all kinds of barriers to capital leaving the USA, but yet businesses are still looking to move their headquarters and nobody asks why. I think it's more than just the high taxes.

3 posted on 08/06/2014 7:37:21 AM PDT by wmfights
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To: apillar
A pity to see Fox Business is even shilling for Obama’s 2014 version of the “Wealthy 1%” “Occupy Wall Street” agitprop (conveniently only an issue right before an election). The entire premise that corporations have some moral duty to fund Obama’s socialist boondoggles is ridiculous, the only responsibility they have is to their shareholders, and if moving to a tax haven raises the share price more power to them.

I didn't read it exactly that way. The author appears to be highlighting the fact that state public pension funds invested in these companies will benefit by these overseas mergers. She's pointing out the same inconsistency you are...Obama is beating the "evil 1%" political drum, while millions of pension accounts would actually benefit from this tax strategy, primarily because Barry the Boob can't bring himself to utter the words "corporate tax reform."
4 posted on 08/06/2014 8:07:21 AM PDT by Milton Miteybad (I am Jim Thompson. {Really.})
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