No, there is not. But that doesn't change the fact that our government has become increasingly socialist, and thus the excessive taxes go to support a socialist redistribution scheme.
We pay those g*d*mn taxes involuntarily- why do you have a problem with that?
Well, yes. If the federal government stuck to it's Constitutional mandate there would be no need for those taxes, for you, me or corporations.
I ask, nay, demand the same from businesses who obviously are less patriotic than me !?
Corporations wouldn't pay one dime of taxes if the rate was 99% of their profits, it is passed down to the consumer or taken out of the return to the shareholders.
Expatriation makes for a more profitable US company and keeps jobs here.?!?
In the case of Stanley, they were only going to move the place of domicile, it was leaving the bulk of the operations here. If they can't save the $30 mil they were trying to save with the reincorporation move, to remain competative they may have to cut back on jobs in the States to get the same savings or move the production overseas.
It boils down to the fact that the government is squeezing to the point where moves like this make business sense. Anger over any proposed move like that should be directed at the government for making it uncompetative to remain when prospects are better elsewhere. The EU is complaining about 'unfair trade practices' in (relatively) low-tax nations (like the US), because their socialism is more complete and drains more production into the rat-hole of government, the least efficient part of any economy. Threats to sue or change the laws after a declared desire to relocate are tactics worth of a would be Stalin.
Because these expatriating companies want to be more competitive with their foreign counterparts by paying no tax at all.
The expatriating companies are not avoiding all taxes. They still continue to pay taxes in each country where they have income, including the United States.
The only thing that they are avoiding, by expatriating, is the additional tax load the the US imposes on foreign earned income. They continue to pay the high US tax rate on income earned in the United States. But, when they earn income in Hong Kong, for example, they only pay income tax to Hong Kong in the amount of 16%. As a US company, they would have to pay an additional 19% or more to the IRS, even though the income from Hong Kong stayed in Hong Kong. The same applies for Canada (29.1%), UK (30%), Taiwan (25%) and the all but four other countries that have higher tax rates than the US. Only US registered companies are required to pay additional tax to their home jurisdiction. Interestingly, though it is of no consequence, the US allows companies to write off taxes paid to other countries, up to the US tax level, but they do not allow a credit on excess taxes paid to the four countries that actually have higher taxes than the US. Just a thought.
What about their being competetive with other US companies that follow the rules? Steroids makes you more competitive but it's still cheating...
There are two points to address here.
1) The companies that are leaving are multinational companies that market their products or services in many countries and must even compete in the US against foreign multinational companies. Those few large companies that do not have to compete in the global marketplace do not feel the same market forces. The sad fact is, that many companies that tried, in the past, to ignore their foreign competition have been bought up by their foreign competition at bargain basement prices. In fact, there was an article in the Congressional Quarterly saying that from 1998 through 2000, 80 percent of all transactions of $300 million or more were foreign companies buying US firms. When that happens, it almost invariably results in many US jobs being sent overseas. With our tax system, we're doing this to ourselves.
2) They are following the rules. It is, in fact, following the rules that is largely responsible for corporate inversion. The directors owe a fiduciary responsibility to the stockholders, to maximize their return on investment, which includes legally reducing expenses, such as, but not limited to taxes. To fail to offer such a significant legal tax saving opportunity to investors would, in many cases, leave the directors open to massive stockholder law suits. Remember that in cases of corporate expatriation, it is the stockholders who make the final decision, not the directors. Far from cheating, they are actually obeying the rules, to both legally reduce taxes and protect themselves from law suits.
Expatriation makes for a more profitable US company and keeps jobs here.?!?
Yes. All that is involved with corporate expatriation is that the company files incorporation in another jurisdiction, transfers their US stock to that new company and gets a post office box or secretarial service in that jurisdiction. The jobs that were in the US, stay in the US. However, if the company fails to compete and is bought out by their foreign competition, the foreign company will likely transfer many jobs to their country. Similarly, if the US government continues to make things tough on those corporations, their only remaining choice may be to truly become a foreign corporation, moving the lion's share of jobs to another country. Corporate inversion (expatriation) is a defense mechanism against an oppressive US tax system. The only effect that it might have on jobs is to create more of them and/or make them higher paying, since their employer will be more profitable.
If they're expatriot how does that make them a US company?
It doesn't make them a US company. They become a foreign company with a US headquarters and a US manufacturing presence, just like many foreign companies that have always been foreign companies, but have chosen to have offices or even headquarters here.
If they move jobs off-shore then least they can do is pay their taxes.
They do pay their taxes. When all they do is expatriate, which is what the current flap is all about, they pay US income tax on US sourced income, as well as US payroll taxes. They also pay taxes in other countries on their income from each of those countries. The only difference is that, like all foreign companies doing business in the US, they don't have to pay additional taxes to the US on all of their foreign sourced income.
They buy there stock in dollars and if the company becomes supra-national by stock offering then they should pay to do business in the US!
As pointed out above, they do pay both US income tax and payroll taxes.
If you re-read what you posted it almost seems you're an advocate of a corporate new world order! Responsible to none.
No. Actually, a multinational company is responsible to a variety of governments. But, only a company registered as a US company is responsible for taxes on the same money in both their country of operation and their country of registration. That's just plain wrong.
However if they're expatriate then they should not be allowed to make political contributions that affect legislation!
No foreign company, including former US companies, may make US political contributions. That is one of the things that must be considered in such a move.
We all hate paying taxes, but the guy who cheats on his taxes cheat us all.
Agreed. But, corporate inversion is not only legal, but often a necessary defense measure, to insure the survival of the company. What you are talking about is called tax evasion, which is the illegal act of evading legally owed taxes. What those corporations are doing, by expatriating, is called tax avoidance, which is the legal act of arranging your finances in such a way as to pay the least amount of taxes that you legally owe. The court has ruled many times that taxpayers are under no obligation to arrange their finances in such a way a to pay the most tax.
Just because it's legal does not make make moral.
Actually, on this subject, the court disagrees with you. For example, the great jurist, the Honorable Justice Learned Hand went so far as to say that, "...there is not even a patriotic duty to increase one's taxes." (Helvering v. Gregory, 69 F.2d 810 (1934)). There is indeed, nothing moral about paying more taxes than the law requires of you. It's only stupid. You yourself avoid unnecessary tax, when you invest in a 401K or other tax exempt or tax deferred vehicle. Taking a mortgage deduction is avoiding tax that you are not required to pay. There is nothing immoral about that, just as there is nothing immoral about a company avoiding taxes that they are not required to pay. In fact, to fail to take advantage of any significant savings might not be immoral, but it would certainly be stupid.
Or does business sense supercede morality?
Not business sense. It's civil law. As pointed out above, by law, corporate directors owe a fiduciary responsibility to the stockholders and if they make gross errors, such as failing to offer the stockholders a $30 million or $50 million per year tax savings or even more, they can be held legally liable.
There is nothing Marxist about saying everyone needs to obey the law.
True. Very true, in fact.
I can only assume that what Weikel and strippersniper were referring to was that a "heavy progressive income tax", such as ours, is the second plank of the Communist Manifesto.
You posed some very good questions. I hope this helps explain why I believe that the problem is not the corporations, but the current laws and the lawmakers on both sides of the aisle, who continue to pass even more oppressive laws.