Protecting American Jobs
Updated: March 15, 2005
Introduction to Issue
January 13, 2005
Corporate inversion and international corporate taxation remains a top issue for the CF&P Foundation
- Introduction to Issue
- CF&P's Effort Pays Off: Misguided Corporate Inversion Legislation Dies in House
- News Clips
- Op-eds and Commentary
- CF&P Strategic Memo: Fighting Fiscal Protectionism, Helping Companies Compete
- May 22, 2002, CF&P Press Release: Treasury's Mixed Message on Inversion: Report
Properly Blames Tax Code for Expatriations, But Policy Prescriptions Fall Short
- Tax Foundation Analyzes Corporate Inversions: An Introduction to the Issue and FAQ
- May 17, 2002, Treasury Dept.'s "Preliminary Report On Inversion Transactions"
- Mitchell: Corporate Expatriation Protects American Jobs (August 29, 2002)
- House Majority Leader Dick Armey sent a letter to his House Colleagues explaining
why we need to fix our tax code to stop corporate inversions
- CF&P Press Release: Coalition Applauds Thomas' International Tax Reform
Proposal: Urges Chairman to Drop Inversion Moratorium and Tax Increase on Foreign Companies' U.S. Operations
- U.S. Chamber Urges Congress to Reject Penalties on Offshore American Businesses
- Ways and Means Chairman Thomas Introduces Bill to Simplify International Taxes
- Pamela Olson, Acting Assistant Secretary (Tax Policy), United States Department of
the Treasury speaks out against the Grassley-Baucus Corporate inversion Legislation. Warns Congress that U.S. international tax rules should be changed to
keep American companies competitive with our trading partners.
- Thompson asks that No Corporate Inversion Amendments Be Added to FY 2003 Appropriations Bills
- American Institute of Certified Public Accountants: Comments for the Record of the
June 25, 2002 House Ways and Means Committee Select Revenue Measures Subcommittee Hearing on Corporate Inversions
- Link to June 28, 2002 House Ways and Means Subcommittee hearing
- House Committee on Ways and Means Corporate Inversion Hearing, June 6, 2002
- CF&P Press Release on June 6, 2002 Ways and Means Hearing
- Mitchell vs. Senator Grassley on Corporate Inversion
- CF&P Press Release on Fiscal Protectionism and the Need for Territorial Taxation
- Coalition of more than 20 influential free-market groups endorses territorial taxation...Condemns fiscal protectionism in Baucus-Grassley legislation
- WSJ Editorial, May 16, 2002, Review & Outlook: The Flight to Bermuda
- WSJ Editorial, May 21, 2002, Review & Outlook: The Bermuda Inversion
- Stanley Works' CEO John Trani Responds to The New York Times Articles,
"Keeping our company competitive preserves thousands of United States jobs and creates new ones."
- Rush Limbaugh: "Battle with Bermuda over taxes
- Denis Kleinfeld: When Multi-Nationals Vote On Taxes
- De Rugy: Setting the New York Times Straight
- CSE: It's the Tax Code, Stupid: American companies are fleeing a corporate tax code
that is too high and anti-business
Introduction to Issue
Emotion is the driving force behind recent proposal to stop U.S. corporations from relocating to
low-tax countries like Bermuda. Politicians assume that an expatriating company will take jobs out of America and that the new foreign-based company will not pay any taxes to the U.S.
government. The Wall Street Journal editorial from yesterday (text and web link below) very clearly explains that both of these assertions are completely false.
If this issue is decided in a rational manner, the proposed legislation will die a quick death. A broad coalition of free market groups already is working hard so that facts triumph over
emotion and good economic policy crowds out bad economic policy.
- Expatriation is not tax evasion. All corporations, regardless of where they are based, pay tax to the IRS on all profits they earn in the United States. This includes U.S.-based
companies, and it includes companies chartered in other jurisdictions. An expatriating company does not reduce its tax bill on U.S. profits by one penny. The only significant
change is that the firm no longer would be obliged to pay taxes to the IRS on income they earn outside America's borders which is precisely what would happen under every tax reform plan.
- Companies should be allowed to flee bad economic policy.
- Don't blame the victim. American-chartered companies face punitive tax laws, including a tax on their worldwide income. Companies based in America also are subject to the
fourth highest corporate tax rate in the developed world higher even than France and Sweden.
- Expatriation protects American jobs. Current tax law makes it very difficult for U.S.-based companies to compete internationally. If they do nothing, they will slowly
but surely lose market share to firms that are based in more attractive jurisdictions. This means a reduction in earnings for shareholders and a loss of jobs for workers.
- Allowing companies to choose where they are chartered promotes economic liberalization. This encourages all nations to improve their incorporation laws, leading to
lower costs and bureaucratic streamlining.
- The anti-corporate relocation legislation creates a precedent that will be used against America. If American politicians enact protectionist tax law, other nations will respond in kind.
CF&P Strategic Memo: Fighting Fiscal Protectionism, Helping Companies Compete
Supporters of tax competition and fiscal sovereignty face an important challenge. At issue is
whether U.S.-chartered companies should have the right to escape America's anti-competitive "worldwide" tax system by re-domiciling in low-tax jurisdictions like Bermuda (a process known
as expatriation). The outcome of this battle could be pivotal in the conflict between tax harmonizers and supporters of market liberalism.
The Big Picture
The U.S. taxes companies on their "worldwide" income. In addition to imposing high compliance costs, this system makes American-based companies less competitive. A U.S. firm
competing against a Dutch firm for business in Ireland, for instance, would have to pay a 35 percent tax on its income with the lion's share going to the IRS. The Dutch firm, by contrast,
only pays the 10 percent Irish tax on its Irish-source income because Holland has a "territorial" tax system (the common-sense notion that a government only taxes income earned inside a nation's borders).
In an effort to remain competitive and protect the interests of shareholders and workers, some U.S. companies are re-chartering in low-tax jurisdictions. Bermuda is a popular choice because
of its strong legal system and zero-tax environment. The Cayman Islands has attracted several companies for similar reasons. A company that expatriates to one of these jurisdictions no
longer has to pay U.S. tax on its overseas income. This enables the company which still maintains substantial U.S. operations and pays taxes to the U.S. government on all income
earned in America to compete on a level playing field with foreign competitors. [Link to full Memo below:]
CF&P Press Release on Fiscal Protectionism and the Need for Territorial Taxation
Tax Reform, not Fiscal Protectionism, is the Right Response to Corporate Flight: CF&P Reiterates Call for Territorial Taxation
Washington (March 12, 2002) The Center for Freedom and Prosperity, the nation's leader in the fight for international tax competition, announced today that it will vigorously resist all
legislation to restrict the freedom of companies to locate in jurisdictions that have more attractive tax and regulatory environments. Andrew Quinlan, President of the Center, remarked,
"Fiscal protectionism is bad policy, and the Center for Freedom and Prosperity will oppose and work vigorously to defeat any legislation introduced to stifle tax competition. Tax competition
is a liberalizing force in the world economy. It should be celebrated to persecuted." Quinlan explained that, "High-tax California should not be allowed to stop companies from moving to
low-tax Nevada, and Washington politicians likewise should not be able to stop companies from escaping bad U.S. tax law." [Link to complete press release:]
March 12, 2002, CF&P Press Release, Tax Reform, not Fiscal Protectionism, is the Right Response to Corporate Flight: CF&P Reiterates Call for Territorial Taxation
Coalition of more than 20 influential free-market groups endorses territorial taxation...Condemns fiscal protectionism in Baucus-Grassley legislation
The Coalition for Tax Competition sent letters urging the Chairmen and ranking members of the House and Senate tax writing committees to reject fiscal protectionism and instead reform the
internal revenue tax code so that American companies would not have a reason to relocate overseas.
Andrew F. Quinlan, President of the Center for Freedom and Prosperity, said, "We should not punish workers, consumers, and shareholders by restricting the right of companies to adopt a
new home country. Lawmakers should make America's tax system more attractive instead of imposing protectionist barriers against the free flow of goods and services." [Link to full press release below:]
Link to Coalition letter:
Mitchell: Corporate Expatriation Protects American Jobs
Corporate executives are being criticized for bad decisions, some of which have crossed the line
into criminal behavior. This heightened attention has helped to create a political environment in which all corporate actions are suspect--including decisions by some companies to
re-incorporate in low-tax jurisdictions (a step commonly known as inversion or expatriation). At the very least, critics accuse these firms of being unpatriotic. In many cases, they have asserted
that such companies are engaged in a questionable form of tax evasion.
Such claims are absurd. The decision to re-incorporate in a low-tax jurisdiction should be viewed as a prudent and responsible business reaction to a tax code that severely hinders the
ability of U.S.-chartered firms to compete in world markets. Expatriation allows a company to compete on a level playing field with foreign-based firms while maintaining its headquarters and
jobs in America--a combination that advances U.S. interests. And since the company continues to pay tax on all income earned in the United States, the evasion issue is a red herring. [Link to Full Memo below:]
August 29, 2002, The Heritage Foundation: Executive Memorandum #829, by Daniel J. Mitchell, Ph. D., Corporate Expatriation Protects American Jobs
WSJ Editorial, Review & Outlook: The Flight to Bermuda
"Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound
to choose that pattern which will best pay the Treasury. There is not even a patriotic duty to increase one's taxes."
~ Judge Learned Hand (1934) ~
It's probably just dumb luck that John Trani, the put-upon chairman of toolmaker Stanley Works, has become the latest political poster child for corporate evil. Ever since Mr. Trani
announced plans to set up a P.O. box in Bermuda and thereby save his company $30 million a year in U.S. corporate income taxes, he's been labeled everything from tax cheat to traitor. If you
didn't know better, you might think Stanley Works' behavior is irresponsible or even unique. It's neither.
Only two days ago, two other firms -- including Cooper Industries, a Stanley Works competitor -- received shareholder approval to reincorporate in Bermuda, which has no income tax. Last
year Ingersoll-Rand, another competitor, did the same. Since 1994 more than 20 large U.S. firms across a range of industries have reincorporated in tax havens such as Bermuda and the
Cayman Islands, or are planning to. When companies are fleeing the U.S. tax code to stay competitive abroad, there's something wrong with the tax code, not with the companies. [Link to full article below:]
May 16, 2002, WSJ Editorial, Review & Outlook: The Flight to Bermuda
WSJ Editorial, May 21, 2002, Review & Outlook: The Bermuda Inversion
Treasury Secretary Paul O'Neill is the only person involved in the corporate tax debate who seems to be thinking past the next election.
Treasury issued a timely report Friday on corporate "inversion," which is when U.S. multinationals relocate their headquarters offshore to avoid the high and complex income taxes
that their foreign competitors don't have to pay. "If the tax code disadvantages U.S. companies competing in the global marketplace, then we should address the anti-competitive provisions of
the code," said Mr. O'Neill, getting to the root of the problem.
In recent years a number of large firms, including Tyco International and Ingersoll-Rand, have nominally reincorporated in tax havens like Bermuda to stay competitive. The U.S. tax code, as
the Treasury report notes, puts U.S. firms at a disadvantage by taxing income earned in other countries, something most other nations don't do. [Link to full article below:]
May 21, 2002, WSJ Editorial, Review & Outlook: The Bermuda Inversion
Stanley Works' CEO John Trani Responds to The New York Times Articles, "Keeping our
company competitive preserves thousands of United States jobs and creates new ones."
Reincorporation will allow us to compete with foreign companies on a level playing field.
Keeping our company competitive preserves thousands of United States jobs and creates new ones.
Two companies that compete directly with Stanley have reincorporated, and other American companies will take similar actions until Congress creates a tax system that doesn't hurt United
States companies trying to compete in a global marketplace. For the sake of our company, its employees and shareholders, we cannot afford to wait for Congress to act. [Link to full letter below]
Rush Limbaugh: "Battle with Bermuda over taxes
Last but certainly not least, America's number-one talk radio host, Rush Limbaugh, featured the controversy of many U.S. companies moving to Bermuda in a recent 90-second morning
update. Text of the update is below along with a link to the audio clip of his comments:
April 18, 2002, Rush Limbaugh's Morning Update, Bermuda Blues
Rush Limbaugh's Morning Update
Thursday, April 18, 2002
You may not know that America is engaged in a battle with Bermuda over taxes - so let me bring you up to speed. You see, the Democrats are planning an assault on American businesses
relocating to Bermuda to reduce their tax burden. Democrats claim these corporations are putting profits ahead of patriotism.
In the Senate, Finance Committee leaders have vowed to stop these moves. Montana Democrat Max Baucus, who heads the committee, says the legislation will put the brakes on the potential
rush to move U.S. corporate headquarters to tax havens, and in the House there are two bills singling out Bermuda as a tax haven. Now, in order to stop companies considering a move,
Democrats want to tax all income including foreign sales earned by businesses that reincorporate outside the U.S.
Bermuda's Premier, Jennifer Smith, disputes the notion that Bermuda is a tax haven. She notes that international companies pay the same taxes local business do. She says companies are
drawn to Bermuda for its superior financial services, and aren't granted special concessions. So, companies move in order to stay competitive and grow their business. Rather than cut taxes,
allowing them to grow and create jobs, Democrats would rather punish them if they stay, and punish them if they move.
As for putting profits ahead of patriotism, let me remind you and these Democrats, the American Revolution was the direct result of oppressive taxation. Our Founders, unlike these
Democrats, understood the morality of profits. That's the Bermuda tax-angle you need to remember.
March 29, 2004, The Market Center Blog, Tyco shareholders overwhelmingly choose to stay in Bermuda.
March 3, 2004, More offshore investing by the Kerry family.
March 3, 2004, The Hill, By Sam Dealey, 'Benedict Arnold' CEOs fund Kerry: Front-runner has accepted $370,000 this election cycle
March 1. 2004, The Royal Gazette, By Mairi Mallon, Kerry's ties to captives surface again
February 22, 2004, The Observer, by Conal Walsh, Kerry: friend or foe of US business?
February 20. 2004, The Royal Gazette, By Mairi Mallon, Kerry is bad news
January 23. 2004, The Royal Gazette, by Colin O'Connor, Kerry pledges to end island's 'creed of greed' within 500 days
February 18, 2004, John Kerry, tax haven profiteer, Part II.
February 12, 2004, Is Senator John Kerry a tax haven profiteer?
January 23, 2004, The Royal Gazette, By Colin O'Connor, Kerry pledges to end island's 'creed of greed' within 500 days
May 30, 2003, The Royal Gazette, By Mairi Mallon, Ingersoll holders reject move back to America
May 29, 2003, Dow Jones, Ingersoll Holders Reject Reincorporating in U.S.
May 29, 2003, The Associated Press, Ingersoll-Rand Holders Vote Against Move
May 28, 2003, Forbes, By Karen Padley, Ingersoll-Rand to get shareholder heat on Bermuda
May 9, 2003, The Wall Street Journal, REVIEW & OUTLOOK: Sorry, Stanley
April 17. 2003, The Royal Gazette, By Becky Ausenda, Bermuda a prop for US manufacturing base
April 17, 2003, Tax-News.com, by Mike Godfrey, Bermuda Attracts More Unwelcome Attention In US Tax Debate
April 11, 2003, Tax-News.com, by Leroy Baker, US Television Ad Attacks Firms Reincorporating Offshore
April 9, 2003, Bloomberg, By Delbert Ellerton, Stanley Works to Cut 1,000 Jobs, Close 9 Facilities
CF&P's statement issued after Stanley decided not to move its corporate charter to Bermuda to save U.S. jobs:
March 10, 2003, Tax-News.com, by Leroy Baker, BIBA Seeks To Restore Bermuda's Business Reputation
March 6. 2003, Bloomberg, By Ryan J. Donmoyer, Republicans Abandon Tax Bill Benefiting Nabors, Noble
March 6. 2003, BBC News, Tyco votes to stay offshore
February 28. 2003, The Royal Gazette, By Tim McLaughlin, Come home to America
January 8, 2003, The Royal Gazette, By Becky Ausenda, US Democrat plans to file 'Bermuda Bill'
December 13, 2002, The Royal Gazette, By Lilla Zuill, Island must get in the arena
December 10, 2002, The Royal Gazette, By Lilla Zuill, Cox slams 'unfair' targeting of Bermuda companies on S&P
December 10, 2002, Forbes.com, Bermuda denounces demands for firms' index ouster
December 9, 2002, The Royal Gazette, By Lilla Zuill, US turns up the heat
December 9, 2002, The Royal Gazette, By Becky Ausenda, Banks end US dollar cheque service
December 6, 2002, Sacramento Bee, By Dale Kasler, Treasurers urge S&P to delete 'expatriates'
November 22. 2002, The Royal Gazette, By Luke O'Brien, Republicans: Controversy is symptom of wider tax issue
November 19, 2002, BenefitNews.com, CalPERS pressures offshore firms to return to U.S.
November 19, 2002, Tax-News.com, by Mike Godfrey, Temporary US Tax Laws Just 'Window Dressing', Complains Neal
November 15. 2002, The Royal Gazette, By Lilla Zuill, Contracts break for tax dodge companies
November 15, 2002 , OffshoreOn.com: US Tax Policies Lead to Corporate Inversions
November 14. 2002, Dow Jones, Treasury's Dam Says International Tax Rules Hurt US Businesses
November 14. 2002, The Royal Gazette, By Lilla Zuill, Fresh US assault on 'Bermuda tax dodges'
November 14, 2002, Tax-News.com, by Mike Godfrey, IRS Moves Against Newly Inverted US Companies
November 13, 2002, The New York Times, By David Cay Johnston, New Rules Order Companies to Disclose Offshore Moves
October 29, 2002, Tax-News.com, by Mike Godfrey, US Academics Study Causes And Consequences Of Corporate Expatriations
October 29. 2002, The Royal Gazette, New regulations planned over 'inversions'
October 23, 2002, Tax-News.com, by Mike Godfrey, Pam Olson Says Fewer US Companies Going Offshore
October 22. 2002, The Royal Gazette, By Lilla Zuill, US debate on offshore moves may flare again
October 21, 2002, Tax-News.com, by Mike Godfrey, Pam Olson Warns US Lawmakers To Tread Carefully Over Corporate Tax Changes
October 21. 2002, The Royal Gazette, By Lilla Zuill, Corporate inversions battle is won but the war is not over yet
October 21, 2002, Tax-News.com, by Mike Godfrey, Congress Ditches 'Corporate Inversion' Legislation
October 18, 2002, United Press International's Capital Comment, Political inversion Second Item, http://www.upi.com/view.cfm?StoryID=20021017-050354-1570r]
October 17, 2002, The Electronic Accountant, Chamber: Don't Penalize Offshore American Businesses
October 16, 2002, Republican Study Committee, The Democratic Economic Plan Bad for the Economy, Bad for Workers
October 16, 2002, U.S. Chamber of Commerce, U.S. Chamber Urges Congress to Reject Penalties on Offshore American Businesses
October 16, 2002, Martin Regalia's speech
October 16, 2002, CNN, by Ted Barrett, GOP leaders pull controversial tax bill: Lawmakers packing bags for campaign trail
September 16, 2002, Tax-News.com, CFP Says Congress's 'Inversion' Amendments Are Political
October 3, 2002, Dow Jones Newswires, By Rob Wells, Report: Four US Contractors Call Tax Havens Home
October 2, 2002, Reuters, GAO: Tax-haven ban would hit only a few big firms
September 14, 2002, TRN Online.com, by Scott Davison, Playing dodge ball 'Punishing' corporations that remain here force the cost onto American consumer
September 10, 2002, Tax-News.com, by Mike Godfrey, Offshore Jurisdictions Should Challenge US, Tax Expert Suggests
September 10. 2002, The Royal Gazette, By Lilla Zuill, Gibbons warns of disaster
September 6, 2002, South Florida Business Journal, Senate: No contracts for expat companies
September 5, 2002, Reuters, By Thomas Ferraro, Senate targets companies that avoid taxes
August 30, 2002, Tax-News.com, US Organisations' Critique Of Bill Thomas's Tax Proposals
August 27, 2002, The Royal Gazette, By Magnus Henagulph, Patriot' tax controversy: Tax debate flares in US again
August 26, 2002, The Royal Gazette, These loopholes are much misunderstood, by James Paul Sabo
August 21, 2002, Washington Post, by Jonathan Weisman, Patriotism Raining On Tax Paradise: Lawmakers Are Chafing at Firms That Exist Offshore Only on Paper
August 21, 2002, The Royal Gazette, by Cathy Duffy, Why Stanley Works is no loss to Bermuda
August 18, 2002, United Press International, By James C. Bennett, Anglosphere: Regulatory arbitrage
August 13, 2002, The New York Times, By David Cay Johnston, Officials Of 14 States Pledge Protection Of Pension Assets
August 12, 2002, Tax-News.com, by Mike Godfrey, US Pension Funds May Shun Companies That Move Offshore
August 12, 2002, The Washington Times, by Bruce Bartlett, Fueling flight of the inversions
August 10, 2002, The New York Times, By Alison Mitchell, Companies Use Ex-Lawmakers in Fight on Offshore Tax Break
August 9, 2002, Tax-News.com, by Mike Godfrey, US States Target Tax-Avoiding Corporations
August 7, 2002, Citizens for a Sound Economy, By: Wayne T. Brough, Ph.D., It's the Tax Code,
Stupid: American companies are fleeing a corporate tax code that is too high and anti-business.
August 7, 2002, The News-Press (Fort Myers, FL), Dixie Sunshine: Corporations voting against taxes
August 6, 2002, The New York Times, By David Cay Johnston with Jonathan D. Glater, Effort to Curb Tax Havens Could Be Costly for Consultant
August 2, 2002, Forbes.com, by Dan Ackman, Stanley Works Stays Home
August 2, 2002 Tax-News.com, by Mike Godfrey, Stanley Works Backs Off Bermuda Move
August 1, 2002, The New York Times, By Carl Hulse, Senate Moves Against Tax-Haven Companies
August 1, 2002, Boston Globe, By Susan Milligan, Senate takes aim at offshore tax havens; Firms would lose defense contracts
July 31, 2002, Tax-News.com, by Mike Godfrey, Bill Thomas Fights To Modernize Government's Tax Models
Jul 31, 2002, The Associated Press, By Curt Anderson, Democrats Gaining Traction in Election-Year Effort to Halt Corporate Relocations to Bermuda
July 30, 2002, USA Today , By William M. Welch, Offshore tax shelters under fire
Jul. 30, 2002, Philadelphia Inquirer, Federal Law Blamed for Tax Havens
July 29, 2002, The Mercury News, By Elaine Walker, `Bermuda tax loophole' under scrutiny
July 30, 2002, Washington Post, By Juliet Eilperin and Jonathan Weisman, Congress Targets Tax Havens: House Vote Shows Perception of Corporate Abuse
July 27, 2002, Associated Press, By Curt Anderson, Democrats win in campaign-season effort vs. offshore corporations
July 18, 2002, Mondaq, by Mr Ross Webber, Bermuda: Bermuda, Still the Offshore Domicile of Choice
July 12, 2002, Tax-News.com, by Mike Godfrey, House Tax Leviathan Splats Tax Dodgers
July 11, 2002, Tax-News.com, by Leroy Baker, House Panel Votes To Punish Companies Which Move Offshore
July 11, 2002, Associated Press, By Curt Anderson, House Bill Would Curb Tax Shelters
July 11, 2002, Dow Jones Newswires, By: Rob Wells, House Bill Would Crack Down on Tax Shelters
July 1, 2002, Business Week, By William C. Symonds, The Tax Games Tyco Played
July 1, 2002, The Miami Herald, By Elaine Walker, Proposed U.S. legislation may close Bermuda loophole
July 2002, National Bureau of Economic Research, By Mihir A. Desai & James R. Hines Jr.,
Expectations and Expatriations: Tracing the Causes and Consequences of Corporate Inversions
June 26, 2002, Associated Press, By Curt Anderson, Tax havens get a careful look: Lawmakers urged to go slow on ban of reincorporations
June 19, 2002, Tax-News.com, by Mike Godfrey, Nabors Shareholders Approve Offshore Move
June 18, 2002, Reuters , U.S. Senate panel backs anti-tax avoidance bill
June 18, 2002, Associated Press, by Eileen Alt Powell, Complex U.S. tax code 'an abomination,' Treasury secretary says
June 17, 2002, BizOffshore, OffshoreOn.com: Investors Fail in Attempt to Oppose Nabors' Reincorporation
June 17, 2002, Tax-News.com, by Mike Godfrey, Wrangling Over Nabors' Corporate Inversion Nears An End
June 10, 2002, National Center for Policy Analysis, by Bruce Bartlett, Corporate Earnings Confusion
June 4, 2002, Reuters, Nabors says Bermuda move brings long-term benefits
June 9, 2002, The Washington Post, Editorial: Inversion Subversion
June 7, 2002, Tax-News.com, by Mike Godfrey, US Treasury Makes 'Inversion' Proposals To Congress
June 6, 2002, The Royal Gazette, US hearing today on offshore moves
June 13. 2002, The Royal Gazette, by Lilla Zuill, US tax hearing wins praise
May 29, 2002, Tax-News.com, by Mike Godfrey, International Consultancy Firms Slammed For 'Unpatriotic' Tax Moves
May 28. 2002, The Royal Gazette, By Magnus Henagulph, Patriot tax gets religion
May 29, 2002, Tax-News.com, Cato Institute Corrects NY Times On 'Patriotism' And Taxes
May 27 2002, The Financial Times, By Amity Shlaes, Let US corporations off the tax leash: Stanley Works's decision to move to Bermuda demonstrates the need for reform
May 24, 2002, Financial Times, By Edward Alden, International Economy: US tax plans to hit foreign companies
May 24, 2002, Financial Times, By Edward Alden, International Economy: Legal pressures set stage for tax overhaul
May 23, 2002, The Royal Gazette, By Lilla Zuill, US Treasury tax report 'fell short'
May 21, 2002, The Houston Chronicle, by Jim Barlow, Islands a tropical haven from grind of U.S. tax code
May 20, 2002, Tax-News.com, by Mike Godfrey, US Patriot Tax Bill Falls At First Hurdle
May 20, 2002, The New York Times, By David Cay Johnston, Officers May Gain More Than Investor in Move to Bermuda
May 17, 2002, Tax-News.com, by Mike Godfrey, New York Times Continues Bermuda Smear Campaign
May 16, 2002, The New York Times, Vote on Tax Bill Blocked in House
May 1, 2002, The Royal Gazette, By Lilla Zuill, It is an unpatriotic act': Leading US Democratic Party leader Richard Gephardt attacks company 'tax dodging'
May 2002, LawOffshore Newsletter, Draft Bill would Reverse Benefits of Offshore Re-incorporation
April 25, 2002, Tax-News.com, Strong Lobby Mounted Against Corporate Tax Legislation
April 25, 2002, The Royal Gazette, By Lilla Zuill, Millions sign up against planned US 'patriot tax'
April 19. 2002, The Royal Gazette, By Lilla Zuill, Free market guru stokes Patriot Tax controversy
April 17, 2002, TheDeal.com, by Robert Willens, The Bermuda angle
April 16. 2002, The Royal Gazette, by Magnus Henagulph, Premier moves to stem US anti-tax drive
April 12. 2002, The Royal Gazette, By Mairi Mallon, US Senate intensifies drive to stop 'immoral' tax dodgers
April 12, 2002, Tax-News.com, by Mike Godfrey, US Senate Gets Tough On Tax Avoidance
April 11, 2002, Financial Times, GLOBAL INVESTING: Uncle Sam upsets the tax shelter game
April 1, 2002, Sarasota Herald-Tribune: Letter to the Editors, by Earle Wallick, U.S. tax code creates need for corporate shells in Bermuda
March 27. 2002, The Royal Gazette, By Lilla Zuill, 'Bad, bad tax policy' threat looms
March 22, 2002, New York Times, By David Cay Johnston, Senators Assail Corporate Use of Bermuda as Tax Shelter
March 21, 2002, Tax-News.com, by Mike Godfrey, Offshore Tax Legislation Likely To Be Passed In US
March 13, 2002, Tax-News.com , US Congress Threatens Emigre Companies
Op-ed and Commentary
March 2005, The Sovereign Individual, By Andrew F. Quinlan, The Outlook for "Tax Competition" A Flat Tax for the U.S.A.?
March 4, 2004, The Washington Times, By Daniel J. Mitchell, Damaging charges?
March 1, 2004, The Union Leader, Editorial -- Kerry's traitors: Takes money from 'Benedict Arnolds'
February 28, 2004, The Washington Times, Editorial: Kerry's donors
May 9, 2003, The Wall Street Journal, REVIEW & OUTLOOK: Sorry, Stanley
July 2002, National Bureau of Economic Research, By Mihir A. Desai & James R. Hines Jr., Expectations and Expatriations: Tracing the Causes and Consequences of Corporate Inversions
March 7, 2003, National Review Online, by Joel Mowbray, Corporate Flight: House Republicans try to preempt Dems on "inversion" issue.
Article by Eric Engen and Kevin A. Hassett, "Does the U.S. Corporate Tax Have a Future?", from Tax Analysts: Tax Notes 1972-2002: 30 years in review, Page 15-27; http://www.tax.org/Federal/TN30ANNIV.pdf
August 16, 2002, Dallas Business Journal, by William Hoffman, Analyst: corporate tax reform needed in U.S.
August 12, 2002, National Center For Policy Analysis, Preventing Corporate Inversions Isn't Congress's Business
August 8, 2002, Business Week Online, By Diane Brady, COMMENTARY: The Hidden Perils of Offshore Tax Havens
August 7, 2002, Citizens for a Sound Economy, By: Wayne T. Brough, Ph.D., It's the Tax Code,
Stupid: American companies are fleeing a corporate tax code that is too high and anti-business.
August 3, 2002, Financial Times, LEX COLUMN: Corporate inversions
July 26, 2002, The Washington Times, by Daniel J. Mitchell, Tax bill with a competitive edge
July 2002, Cato Institute Tax and Budget Bulletin, by Veronique de Rugy, Runaway Corporations: Political Band-Aids vs. Long-Term Solutions
Congressman Ron Paul on Corporate Inversion
June 2002, Treasury and Risk Management, by Dan Mitchell, The Perfect Jurisdiction
May 24 2002, Financial Times, by Amity Shlaes, A beautiful exception: Why close a tax
loophole that underpins America's status as a magnet for foreign capital?
May 21 2002, Hartford Courant, by John S. Barry, Stanley's Patriotic Move to Bermuda
May 8, 2002, The Washington Times, by Dan Mitchell, Bad tax policy: You can run . . .
May 2, 2002, The Washington Times, by Richard W. Rahn, Tax patriots . . . and scoundrels
April 18, 2002, National Review Online, By Veronique de Rugy, Bermuda Straight: Government greed is causing corporate flight.
April 19, 2002, The Deal.com, by Veronique de Rugy, There's nothing unpatriotic about expatriation
De Rugy's Comments on Corporate Relocation: CNN and NPR
- We have to understand the big picture and the reason why all these firms are moving out of the U.S. The U.S. government taxes income on a worldwide basis. It puts U.S.
firms on a very uncompetitive position compared to other firms around the world. [Source: May 9, 2002; CNN's Lou Dobbs Moneyline, quote by Veronique de Rugy, Cato Institute]
- A U.S. firm operating outside the U.S., for example, in Europe, not only pays the European taxes, but also pays the U.S. taxes, which puts the U.S. firm in a very
uncompetitive situation compared to a European firm. [Source: May 8, 2002; National Public Radio's All Things Considered, quote by Veronique de Rugy, Cato Institute]
Denis Kleinfeld: When Multi-Nationals Vote On Taxes
First appeared in the April 2002 issue of the Offshore Investment Magazine
Companies like individuals, can either pay tax or do something to avoid tax. They can, if the situation demands, move out from under the tax system. Multi-national companies, whether
public or private, are showing just what they think of their home country tax systems. They are not paying but expatriating. It is what is known as voting with your feet.
As almost everyone in the world knows, Americans are typically very provincial. Likely, well over 90% of Americans do not even have passports. Basically, their attitude is that America is
the best place to be and why would anyone want to go anywhere else? But the fact is that even American companies, of all sizes and shapes, are moving offshore.
It is clear that there is a confusing political war going on over the tax system of the United States of America. The same arguments being raised in support of or against the current tax
system are applicable to the other OECD countries. On the one side are the proponents who say that the tax system as it currently exists has got to go. As one presidential candidate said,
"Put a stake through its heart". On the other side, there are those who feel wealth redistribution and campaign contributions are all important so that the current system must be
kept in place and even expanded. In my view, mere political and special interest ideologies are rarely supported by the economics of reality. [Link to full article below:]
De Rugy: Setting the New York Times Straight
To no ones great surprise, The New York Times chose not to print Veronique de Rugy's letter to the editor to Paul Krugman's column on corporate inversion. The following is Veronique's
complete letter with a link to Mr. Krugman's column:
May 14, 2002
Paul Krugman (May 14) writes that when U.S. firms, such as Stanley Works, re-incorporate in
lower-tax countries they are engaging in unpatriotic tax evasion. Actually, it appears that the company is engaged in legal tax avoidance, something which wastes too much time for too
many companies. The root cause is a tax code that has become so complex that it essentially demands that firms hire expensive tax lawyers simply to avoid paying more than their fair share.
Mr. Krugman is misinformed with regard to the competitiveness of the U.S. corporate tax rate.
According to a new KPMG survey, the U.S. corporate income tax rate (federal plus state) is the fourth highest in the 30-country Organization for Economic Cooperation and Development. The
U.S. rate of 40 percent is higher than Germany (38.4 percent), France (34.3 percent), and Britain (30 percent), the three competitor countries cited by Mr. Krugman.
That suggests that the simplest way to reduce tax avoidance would be to reduce the U.S.
corporate tax rate. Many tax experts have also pointed out that the "worldwide" system of U.S. taxation is uncompetitive and, for example, is thought to be a reason why Daimler-Chrysler
established its headquarters in Germany, not in Detroit.
Mr. Krugman should take his nationalistic blinders off and think about what recent corporate
actions are telling us about our tax system. If politicians what to be patriotic, they should work to enact a low-rate and vastly simpler business tax system that would be the envy of the world.
Veronique de Rugy
Fiscal policy analyst
May 14, 2002, The New York Times, by Paul Krugman, The Great Evasion