Cooper Industries Plans Bermuda Move

Newsday ^ | February 13, 2002 | The Associated Press

[Willie Green]

HOUSTON -- Cooper Industries said it would reincorporate in Bermuda Wednesday, a day after Danaher Corp. backed away from buying the worldwide manufacturer of electrical products, tools and hardware.

"This change will enhance Cooper's strategic flexibility and our reduced global tax position will significantly increase cash flow -- enabling us to further strengthen our balance sheet and better position us to pursue worldwide growth opportunities," H. John Riley, Cooper's chief executive said.

[Willie Green]

Bermuda? Why not just incorporate in The Cayman Islands and be done with it?

(No more Crescent wrenches for Willie Green. Thank-goodness I already have plenty.)

[Willie Green]

index bump

[lewislynn]

"This change will enhance Cooper's strategic flexibility and our reduced global tax position will significantly increase cash flow......

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.....the reincorporation offers strategic advantages not available under the company's current structure and was expected to generate $55 million in additional cash flow and add 58 cents per share to earnings.

Hmmm imagine that. All those tax savings and not one mention of hiring more people, raising wages/benefits for their employees, improving productivity with new(er) equipment, or reducing prices to the consumer...I thought we're told all those things would take place once the tax burden (they don't pay, they simply collect and pass on to the consumer) was removed...

[maro]

In long-term equilibrium, even if the extra money is paid out to the shareholders, more jobs will be created, since the shareholders will do something with the money--invest in new companies, or just spend it.

[Willie Green]

I thought we're told all those things would take place once the tax burden (they don't pay, they simply collect and pass on to the consumer) was removed...

Maybe, (just maybe) we're being lied to.

They wouldn't lie to us, would they?

</sarcasm>

[Toddsterpatriot]

Hmmm imagine that. All those tax savings and not one mention of hiring more people, raising wages/benefits for their employees, improving productivity with new(er) equipment, or reducing prices to the consumer...I thought we're told all those things would take place once the tax burden (they don't pay, they simply collect and pass on to the consumer) was removed

And continuing to pay the taxes helps hiring, wages, prices...... how exactly?

[lewislynn]

And continuing to pay the taxes helps hiring, wages, prices...... how exactly?

Unless you can show me where there are government spending cuts, what happens when A group of taxpayers is eliminated is, the taxes they don't pay creates a tax shift DIRECTLY to YOU and me the individual tax payer.

It can also be called a subsidy.....How do you feel about subsidies?

And you would benefit from higher individual taxes to support their subsidy....how exactly?

[lewislynn]

more jobs will be created, since the shareholders will do something with the money--invest in new companies, or just spend it.

Oh, OK, now I get it. The people that left the country with their money to avoid taxes will somehow think it's OK to reinvest their tax windfall in the high tax country they just left to avoid taxes?

Enjoy those GOP brainwashing sessions.

[Toddsterpatriot]

Unless you can show me where there are government spending cuts, what happens when A group of taxpayers is eliminated is, the taxes they don't pay creates a tax shift DIRECTLY to YOU and me the individual tax payer.

This is an argument for less government spending. I agree with that. It doesn't answer the question of how the corporations tax payments helps hiring,wages,jobs...

It can also be called a subsidy.....How do you feel about subsidies?

Again, their taxes are subsidizing wasteful government spending. I'd rather do without.

And you would benefit from higher individual taxes to support their subsidy....how exactly?

I'd benefit from lower taxes. So would Cooper Industries. So would those employees who will lose their jobs when Cooper moves.

Lower taxes that they pay here are better for government revenues than zero taxes they don't pay when they are not here or bankrupt.

[Toddsterpatriot]

Oh, OK, now I get it. The people that left the country with their money to avoid taxes will somehow think it's OK to reinvest their tax windfall in the high tax country they just left to avoid taxes?

The company left, the shareholders didn't.

[maro]

The ideological premise of what you say is odious. We are not serfs of the Crown. What we keep from what we earn is not an allowance that the Government condescends to give us. In the first instance, it's OUR money; taxes are moral only when needed for legitimate Government purposes. I thought the Revolutionary War settled that question in this country. Second, the migration of Cooper Industries offshore really only affects the extent to which the US taxes Cooper's FOREIGN operations. The US is an oddball in the developed world for insisting on taxing US corporations on WORLDWIDE income, while taxing FOREIGN corporations only on their US income. So we cut foreign corporations a break that we don't give to domestic corporations. This is a serious policy issue, especially in light of the emerging reality that we are now competing with a European federal union. There are other serious tax issues--what to do about our tottering Foreign Sales Corp. regime in light of the WTO's recent rulings--that the Cooper case bears on. But all that is probably lost on you, who I would guess is just a Democrat interloper who never saw a tax that couldn't be bigger.