Is it unpatriotic for an American corporation to lower it’s federal income tax expense by moving to a more business literate and friendly nation? That’s what some are saying, including President Obama. This demonstrates either;
• Economic ignorance, Or
• Cynical manipulation by greedy politicians of the economically ignorant
I suggest the opposite of Unpatriotism is true – Most “inversions” are moral, just and needed. Those who oppose them are advocating a corporation behave in an immoral and irresponsible way. Shocking? Hardly.
A corporation exists to make money for it’s shareholders, like Retirement Funds for the large companies, by providing it’s customers with a good service or product at a good price. If a corporation pays taxes that are not required, that cost of the extra taxes is either absorbed by the shareholders who make less, the employees who make less, or the public who must be charged more to pay for the higher-than-required taxes. Or it may reduce it’s costs by reducing quality or cutting employees (the biggest expense of most businesses). Whatever happens to meet the demand of higher taxes robs someone else in the economic ecosystem unnecessarily.
If you have a choice (legally) as a corporate leader to either benefit your shareholders or consumers or government, your moral obligation is to benefit the shareholders first. Consumers come a close second assuming it will benefit the shareholders more in the long run. Government is a very distant third. I’m speaking of moral obligation. If you take away long term profits from shareholders to give them to the government, you have violated a sacred trust and should be fired.
Let’s make it more personal. If ABC Company willingly pays higher taxes than it needs to, Grandma, who depends on their Pension or 401K income to survive, will have less to live on.
Households, not hedge funds, own approximately 80% of the stock market companies. That includes retirement, mutual funds, stocks owned by consumers and insurance.
It is immoral, therefore, to take money away from Grandma to give to a bureaucrat in the form of taxes, especially when Government is legendary for waste, fraud and corruption.
The Best Future happens for the citizens of the US when our government has a simple, business friendly tax policy that keeps jobs and revenue in the US. It couldn’t be more clear.