{"id":1229,"date":"2009-05-06T13:04:09","date_gmt":"2009-05-06T21:04:09","guid":{"rendered":"http:\/\/hodakvalue.com\/blog\/?p=1229"},"modified":"2009-05-09T19:47:10","modified_gmt":"2009-05-10T03:47:10","slug":"i-think-that-it-would-be-surprising-to-find-microsoft-or-whoever-looking-to-relocate-their-headquarters-out-of-the-united-states","status":"publish","type":"post","link":"http:\/\/hodakvalue.com\/blog\/i-think-that-it-would-be-surprising-to-find-microsoft-or-whoever-looking-to-relocate-their-headquarters-out-of-the-united-states\/","title":{"rendered":"“I think that it would be surprising to find Microsoft or whoever looking to relocate their headquarters out of the United States”"},"content":{"rendered":"

That quote is in reference to Obama’s proposal<\/a> to enhance the U.S.’s global taxing power over corporations incorporated here.<\/p>\n

Here’s how it works now.\u00a0 P&G and Unilever can set up a soap plant in Ireland and sell soap in India.\u00a0 Unilever pays the Irish tax rate of 12.5% on its profits.\u00a0 P&G pays the same, but retains an additional<\/em> 22.5% tax liability with the United States.\u00a0 P&G will have to cough up that cash as soon as it brings it back to the U.S.\u00a0 Lo and behold, they see an opportunity to build a warehouse in Ukraine, or a call center in Bangalore.\u00a0 They use their foreign profits to do this, paying a net tax that is exactly the same as Unilever’s for all these activities.<\/p>\n

Obama says he wants that tax money now.\u00a0 As soon as P&G makes it.\u00a0 On money that never reaches the U.S.\u00a0\u00a0 In Obama’s rose world, P&G is “shirking its responsibility” to the American people by shielding their profits from among the highest corporate taxes on Earth.\u00a0 Obama’s does not consider that the American government is shirking its responsibility to American companies by charging them among the highest rates on
\nEarth for the use of the house brand.<\/p>\n

There’s actually a funny part to this story:\u00a0 Obama believes that this change in policy will encourage more jobs in the U.S.\u00a0 That’s right, by taking more of P&G’s foreign profits away from them, they will build that warehouse in Utah or that call center in Buffalo.<\/p>\n

Only the U.S. has the arrogance to levy taxes on a global basis.\u00a0 This arrogance is born of the liberal hubris that these companies have nowhere else to go (“they wouldn’t dare reincorporate in Bermuda”), or that contemplating it constitutes a sort of treason.\u00a0 It is born of the conviction that a extra few billion in the hands of Congress is better for Americans than having it in the hands of American companies.\u00a0 They really believe that.<\/p>\n

The really funny thing is that Obama believes the people telling him that he will actually see all those taxes rolling in.\u00a0 If history is any guide, some of those companies will, in fact, reincorporate in Bermuda<\/a>, or Ireland, or Holland.\u00a0 It doesn’t cost much for even a fairly large, global company, certainly less than 20+ percent of their foreign profits per year.\u00a0 The ones that don’t re-incorporate outside of the U.S. will, instead, spin off their international divisions<\/a> to their shareholders.\u00a0 Others will use any of dozens of other loopholes, presumably more expensive measures than they must use today, to keep from getting raped by Congress.\u00a0 Under no circumstances do I believe that Unilever or Arcelor or Nestle or any of the other challengers to our major businesses will reincorporate in Delaware and move their headquarters to New York.\u00a0 The few businesses that suck it up for whatever reason will simply have to adapt to becoming uncompetitive in a hungry world, resulting in less profits here to tax.<\/p>\n

And we will not see a significant increase in tax revenue from our multinationals.<\/p>\n","protected":false},"excerpt":{"rendered":"

That quote is in reference to Obama’s proposal to enhance the U.S.’s global taxing power over corporations incorporated here. Here’s how it works now.\u00a0 P&G and Unilever can set up a soap plant in Ireland and sell soap in India.\u00a0 Unilever pays the Irish tax rate of 12.5% on its profits.\u00a0 P&G pays the same, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,10],"tags":[],"class_list":["post-1229","post","type-post","status-publish","format-standard","hentry","category-collectivist-instinct","category-invisible-trade-offs"],"_links":{"self":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/comments?post=1229"}],"version-history":[{"count":8,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1229\/revisions"}],"predecessor-version":[{"id":1249,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1229\/revisions\/1249"}],"wp:attachment":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/media?parent=1229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/categories?post=1229"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/tags?post=1229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}