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US Corporations Retaliate Against Obama's Anti Business Policies

Clueless?"As savvy investors and entrepreneurs search for ways to minimize the impact of the U.S. tax system, with its relatively high rates and global reach, they are increasingly incorporating overseas, tax experts say.

Some private-equity firms have relocated U.S. companies or divisions to tax-haven countries. U.S. multinational companies have spun off foreign subsidiaries in tax havens. U.S. start-ups are even beginning life offshore."

- The Wall Street Journal
June 24, 2011

The consequences of Obama's anti-business policies are coming "home to roost" as American corporations are beginning to incorporate outside of the United States.

Lower-Tax Shores Draw U.S. Firms

Yesterday, I wrote about 8 specific anti-business actions that Obama has taken since becoming president. Following that story, a reader in Southern California suggested that I look into the story of Freescale Semiconductor and I discover yet another corner of the economy that Obama is destroying.

It turns out that Freescale is a long standing American corporation that went private in 2006 when a group of investors bought up all their stock. After a few years of restructuring and streamlining, Freestyle recently "went public" again.

Except this time they didn't do it as an American corporation, they did it as company that is headquartered in Bermuda, a tax haven.

On Friday, the Wall Street Journal wrote about this startling trend:

"It's certainly a growing trend, and managers and firms are getting smart about it," said Mihir Desai, a Harvard business professor. Mr. Desai calculated that in 2008, there were three U.S. initial public offerings of stock by tax-haven-incorporated companies for every 10 U.S.-incorporated IPOs. There has been no similar uptick in European markets."

Three out of ten, that's 30% of new businesses in America deciding to "take their ball and go away!" That means no corporate income taxes for treasury and no high paid corporate American jobs.

The WSJ also reported:

U.S. IPOs by companies incorporated in two tax havens—the Cayman Islands and Bermuda—have grown steadily in recent years, according to research firm Dealogic, from about 1% of the total a decade ago to 26% in 2010 and more than 21% so far this year. Most of those IPO companies are headquartered in Asia, but a substantial minority—18—have been U.S.-based. Other U.S. companies that already were publicly traded have moved to lower-tax countries through reincorporations.

As other countries have reduced corporate taxes, the U.S. has one of the world's highest top rates, at 35%, although effective rates everywhere can be substantially lower depending on tax breaks and other incentives. The U.S. also is one of the few developed countries that still seek to tax their companies' global earnings; most countries tax only profit earned inside their borders.

"If you're going to take a privatized company public, why wouldn't you say, 'What are the pluses and minuses of being incorporated in the U.S. versus somewhere else?' " said Willard Taylor, a tax lawyer with Sullivan & Cromwell LLP. "Very often, depending on what the business is, you'll conclude there are no pluses to being in the U.S."

All of this proves once again that Obama's never ending anti-business class warfare rhetoric is destroying the US economy. Perhaps worse is that he's lying to the American public when he says we can solve our deficit by raising taxes on corporations and the wealthy. To do so will simply chase them (and their capital) offshore and then they'll all be paying zero income taxes.

Just like Freescale!

Dave

July 7 BBGL Team
A	Scott Webster
	Jeff Baker
B	Jim Craig
	Mike Hiller
C	Ron Dias
	Jerry Baker
D	Ray Drouin
	Bill Snyder

Standby Alternates
	Dave Horne
	Larry Oliveira,
	Dave Rivenburg
	John O'Conner,