Quote:
Originally Posted by detbuch
Inversion does not contradict Jim's reason companies physically move elsewhere. The reason they do so, as Jim stated, IS to lower the cost of production.
Inversion, as you have pointed out, is not about physically moving production to another country in order to lower production costs such as employee wage compensation packages, more attractive regulatory structure, and lower infrastructure costs, etc. Instead, inversion ships the "head" elsewhere to save not on production costs pers se, but in order to save on taxes.
So, yes, as Jim said, corporations physically move in order to save on production costs.
And, yes, corporations invert their "heads" elsewhere to save on taxes.
Ironically, inversion saves the jobs of American workers. The U.S. governments lose corporate tax revenue. But the employees keep their jobs.
But both types of perfectly legal moves depend on lower costs elsewhere. So competitively lowering the costs of production and taxes here would help in reversing both trends.
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"Ironically, inversion saves the jobs of American workers."
Exactly. 5 years ago, my insurance company moved its "headquarters" to Bermuda. We rent a tiny, tiny office, and they have a Board Of Directors meeting there once a year, to prove that it is really the HQ. Even though the office is vacant 51 weeks out of the year.
That saves us a few million each year in taxes. Much of which was used to grow the company, meaning more people have good, white collar jobs, with which they pay mortgages and put their kids through college.