Corporations Leave US For Low-Tax Switzerland

A wave of energy companies have announced plans to move to Switzerland.
The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.

Yet a wave of energy companies has in the last few months announced plans to move to Switzerland mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama’s tax-seeking administration.

In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes’ drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two.

Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.Read More

Good job Obama, the liberals should be proud of your work on forcing companies out of the Country!

LINKS:

(1) Head of Procter & Gamble blasts Obama tax proposal would cost American jobs & Higher Prices for consumers

(2) Obama’s border talk: I call bull

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13 comments on “Corporations Leave US For Low-Tax Switzerland

  1. Sorry, you said Obama is “forcing” companies to leave the country? The corporate tax rate in the U.S. is far from punitive; in fact, it’s still ridiculously low compared to any industrialized democracy, and lower than any place on earth except these deliberately created tax havens. If a corporation makes a move like this, it’s a signal that they have no investment of any kind in any community. Keep an eye on them; they’ll evade any law they can if they believe it will be profitable.

    Please reconsider your opposition to any tax hike of any kind. Where should government revenue come from? Should we tax whoever puts up the least resistance? Or should there be a more rational standard?

    We can’t get rid of taxes. So imagine a system where everyone felt they were getting their money’s worth from government, and no one felt burdened by their share of taxes — or had trouble paying them, or had to worry about whether they had paid the right amount. On top of that, everyone could easily find out how the government was spending and saving its money.

    That’s the ideal I think we should aim for. You know, open government. Accountability to the people.

  2. You were off on comparing The United States Capital Gain Tax with other countries!
    Canada, Japan, Mexico, Germany, Taiwan among Countries With Lower Long-Term
    Individual Rates.

    Reuters: “A low capital gains tax rate has an important role to play in fostering
    economic growth and playing on a competitive global economic field,” said ACCF Senior Vice President and Chief Economist Margo Thorning. “The U.S. falls far
    short when compared to many other countries and stands to be at even greater
    international disadvantage if capital gains tax rates are increased once the
    current 15% rate expires in 2010.”
    Many today believe that the ’78 cut in capital gains tax rates
    not only helped make Silicon Valley the center of technological breakthroughs
    but has also had a strong, positive, and lasting impact on overall investment,
    economic growth and job creation in the U.S. Read More

    Most Americans know that if you raise taxes on companies that those companies will raise prices on their products to save the lost. Same with unions raising wages, it cause the prices in stores to go higher and yes the poor and the middle class bare the cost!

  3. GTP is correct. The total tax burden is typically higher in other big economies, but the Yurps and the Japs treat corporate income more sensibly than we do. And sensible treatment of corporate income means, as a rule, higher wages, more employment, and lower prices. The stockholders aren’t the only ones with a stake in the corporation’s success.

    Where’s the money supposed to come from? Cut spending. Even the Obama, with his horseshit budget figures, claims to be cutting spending. He’s not, of course, but spending cuts are what most people prefer to tax hikes. There simply is no way to check the growth of monster government if we keep feeding it.

  4. I was discussing corporate taxes in general, which I understood to be the topic of your post.

    I know it’s dogma that raising taxes always means corporations will raise prices, and like any increase in the cost of doing business, it does give them an incentive to do that. But in even a semi-competitive environment, there’s nothing automatic about passing costs along to the consumer. If you pass it along and your competitor doesn’t, then you lose.

    Let’s look at your recommendations: Cut taxes and cut spending. Corporations will then pass their bounty along in the form of higher wages and employment.

    In practice, though, we see them locating plants in cheap labor markets overseas and awarding benefits to executives, not workers (whose real income has been in decline since the 1970s). And this is exactly what we should expect them to do. They have no obligation to anyone but their own shareholders, right?

    It’s fine to say we can’t tax and spend our way to a solution. But we can’t un-tax and un-spend our way to prosperity either. Political doctrine only gets you so far.

  5. How about first off…Obama quit spending trillions that we don’t have and stop printing fake money! If he had not of been spending our tax money useless then he would have no need to raise taxes but could cut taxes instead! Now why drive companies out of the country by raising Capital Gain Tax? Thats what has happen to many of cities around the US, they charged so much tax on businesses that alot of them are building outside city limits! Cut or do away with Capital Gain taxes and get more jobs for the American people in return!

  6. A few points re alarob’s post.

    The taxes are passed on to one stakeholder or another. It’s not ideology, it’s just accounting. Executive compensation is a small fraction of total costs across all corporations. If you think top-level plutocrats can absorb the whole corporate tax bill, you’re way off.

    We’ve debunked the real-wages-in-decline-since-the-70’s myth already on this blog. We can do it again if need be. Only in certain sectors, accounting for a smaller and smaller fraction of total employment as time goes on, have real wages declined, and, even for them, most of the decline happened years ago.

    As for locating plants overseas, capital follows low costs. If US firms were suddenly to move overseas manufacturing ops back home, they would still be undersold by whomever continuned to take advantage of the lower costs. A couple ways around this are 1) protective tariffs, effectively a subsidy to labor unions and a known recipe for lowering national income (see Great Depression), and 2) reducing other costs to domestic operations … like taxes.

    There’s nothing wrong with following correct doctrine, but, so far, doctrine hasn’t entered into the discussion at all, that I can see. It’s been pretty straighforward economic reasoning, with some of us following the reasoning and others preferring not to.

  7. A crash course. Corporate income is taxed before it is distributed to shareholders. The distribution, in the form of dividends, is then taxable, again, to the shareholders. Moreover, any anticipated increase in a corporation’s profits is reflected in higher share prices, whether or not higher dividends are expected immediately. This increase in share price is a capital gain and is also taxable to the shareholders. Wanna make some jobs? Make it more profitable to invest in the firms that create the jobs. And don’t forget, it’s not Scrooge McDuck who owns all the shares. Directly or indirectly, via banks, mutual funds, pension funds, and on and on, it’s millions of people who own Corporate America.

  8. The problem is the new tax haven savings are never passed on to consumers. So now after a large corp moves away they leave the tax burden of our country to those who do not move away.

    Thanks a lot large Corp who have moved away. I am happy to have made you what you are today to see you turn your back on me and my country.

  9. Who are you kidding? All the companies you site are Bermuda based companies moving to Switzerland. These companies left the US years before Obama was President!

    Goodtimepolitics: It wasn’t I that said, it was in the News! And so maybe you should read this:
    Obama Wants $190 Billion Tax Increase on Companies

    Your products will sky rocket if this passes! Which congress isn’t to happy with I have been reading!

  10. Heaven forbid that corporations should ever see an increase in their taxes. That would be the thin edge of the wedge that would destroy our civilization.

    You’ve convinced me that taxes should always be passed down the line to people who lack the influence to soak someone else. My state of Alabama is showing everyone else how it’s done: First you tax the income of every worker who makes as little as $12,000 in a year. (If they work in Birmingham, they also pay a tax to the county — unless they make six figures, in which case they’re tax-exempt.) Then you tax every penny they spend, even on groceries. Spending on services that the poor can’t afford (dry cleaning, lawyers, accountants) is tax-exempt. Just as it should be!

    In Alabama we are zealous about this. As a consequence, when the economy weakens, state revenue promptly takes a dive, because it is pegged closely to cash-register transactions and paychecks, rather than stable assets like land. But it all works out, because then the state is simply unable to provide more than token relief to people who lose jobs and health insurance. We can pretend to care when we really don’t give a damn what happens to poor people. So those who can’t afford to leave the state will either sponge off middle-class relatives or turn to theft or violent crime. There’s no law like the law of the jungle!

    Taxes are for little people. If you’re paying taxes, it means either you’re not rich enough to matter, or you’re rich and stupid — too stupid to figure out who to hire to shift that tax burden where it belongs. This is an ancient principle that keeps democracy in check: Peasants pay taxes. Castles are exempt. Corporations are modern-day castles. Deal with it.

  11. alarob. Since corporate taxes end up being paid by the various stakeholders — investors, employees, consumers, other firms with their own stakeholders — why should corporations be taxed at all? You’re right that our present tax burden is too high, but taxing corporations instead of individuals doesn’t lighten it. Corporate taxes are paid by individuals.

  12. Corporate taxes drives American companies out of the country and thats why Obama is trying to force the ones already outside the United States into paying taxes…which is proof that taxes are running off our companies and American jobs. But he still wants to charge the companies we have left higher Corporate taxes, crazy huh! America has the highest Corporate taxes. So if anyone wants less jobs in American then support Obama and his polices of spend more, tax more! Less jobs we have in America the less tax payers we have, so the workers that we still have end up paying higher taxes along with the companies that are still here! Yes I can see why companies want to leave America and you can not blame them!

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