Treasury Secretary Jack Lew said that president Obama will soon take executive action to prevent corporate tax inversion. Inversion is when US corporations by foreign corporations and then relocate the headquarters of the combined Corporation to country outside the US, in order to lower their overhead and increase their international competitors. Why do they have to do that?
According to the liberal left, it is because they’re greedy bastards, that deserve to be punished and forced to pay their fair share, if not more. But let’s remember there used to be in this country a phenomenon of corporations moving into the country, corporations who wanted to do business here, who wanted to come from other countries to here, to do business in America. British companies, French companies, Swiss companies, Spanish construction companies, French pharmaceutical companies all flocked to our shores. You can go through the list of hundreds of companies that have flocked to the United States in previous decades to do business here, because it was where they had opportunity, where they could make money. You had (at one time) minimum government interference minimum government taxation.
Now that the corporate tax rate in United States is higher than any other industrialized country in the world by far at 35% with the next highest at 29% and the Irish at 12 ½% not very much interest investment United States anymore. Foreign companies coming to the US has dried up, American companies fleeing the country has increased. It’s only a trickle right now, but it will become a river until we correct the underlying problem. The tax rate is too damn high.
If our progressive president is going to take unilateral, that means that he’s going to try to force companies to stay here. He will say if you want to leave and avoid your fair share of the cost of socializing this country, we will have a new tax rate, new regulation designed just for you. To me that sounds like discrimination- but we all know that liberals do not do that, correct.
He is considering forcing 60-day waiting period which would allow him to invoke special executive action against that particular company. It would also allow him to invoke some obscure provisions of The National Labor Relations Act of 1935 (49 Stat. 449) 29 U.S.C. § 151–169 (also known as the Wagner Act) to force a union vote within that 60 day period. In other words, the government intends to make life miserable for your company, if you even think about moving from this a giant workers paradise formerly called United States of America.
Let’s restate that: “unilateral action to prevent.” When this left-leaning government says “ prevent” that usually means they are going to apply political, legal and social force to the situation. The proper American (not socialistic) solution to the problem is to reduce the corporate tax rate to about 20% and watch the billions of dollars flow back into the country, watch job creation go crazy, watch the whole thing turnaround because America corporations will gladly stay here and compete internationally, rather than go international in order to compete here.
Ready for some facts- provided by a branch of the government itself (bet you somebody gets demoted). From the Federal Reserve Bank of New York is a new study out 9/8/14. The study based on the Feds August 2014, Empire State manufacturing survey and e-business leaders survey of service firms says that the affordable care act is affecting businesses. What a revelation! Millions of conservatives (including myself) have been telling this exact same story since it was passed that Christmas Eve.
Nearly 4 in 10 manufacturing firms said ObamaCare is increased their per worker health benefit costs a little this year, 34.9% say a lot. 20% of service firms say a lot, 38.4% say a little. Companies are responding to these increased costs in a number of ways that negatively impact their workers: 60% of manufacturing firms and 54% of service companies say they are making modifications to their health plan and 73% manufacturing firms are increasing employee contributions, as is 69% of service firms. 84% of manufacturing companies say the modifications include raising deductibles, 78% say they’re increasing the co-pay. Service firms: 76% raising deductibles, 80% raising co-pay. 21% of manufacturing firms say they are reducing the number of workers employed, 19% are raising the proportion of part-time workers, 19% are increasing outsourcing, 36% are raising prices.
This is the price of ObamaCare. The price is that your chances of employment have gone down, your pay is not going to go up, you may go on part-time or be outsourced and above everything else you’re going to pay more for your health insurance under that employers plan. That of course means we go to the store and pay more for virtually everything including.
That folks in a nutshell is what hope and change was all about.
I’ve written about the falsity of tax inversion before. You can catch up at: