Quote:
Originally Posted by wdmso
Why are companies moving overseas? Because it's CHEAPER. If we lower the cost of doing business here, there's less incentive to move jobs overseas.
thats wishful thinking and not based on Historical business trends below is the biggest reason why the head leaves and the body stays in the US ... but they need lower taxes its comical
http://americansfortaxfairness.org/t...ax-inversions/
Inversions largely occur on paper. Corporations typically do not move their executives or operations overseas.
Corporations that invert continue to enjoy the benefits of operating here — they just dodge a lot of taxes.
A dozen U.S. firms are currently considering doing a corporate inversion.
Walgreens could dodge up to $4 billion in U.S. taxes over five years if it inverts. One-quarter of its sales are from Medicare and Medicaid.
Medtronic plans to move its corporate address to Ireland, a tax haven, to avoid paying U.S. taxes on $20.5 billion in offshore profits.
U.S. corporations already dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
U.S. corporations hold $2.1 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here. An inversion can let firms dodge paying taxes on those profits.
Big corporations say that the 35% U.S. corporate income tax rate is too high. But many companies pay much less because of loopholes in our tax code — many pay at a rate of less than 20%.
26 corporations paid no U.S. income taxes from 2008 to 2012, including General Electric, Boeing and Verizon. 111 companies paid no income taxes in at least one of those five years. |
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.