Tax inversions | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    We have been hearing a lot about tax inversions lately. According to a NY Times article by Josh Barro published on 8/9/14, tax inversion is "... a tax avoidance maneuver in which an American company is acquired by a smaller foreign competitor, allowing it to move its tax residency abroad while keeping most of its operations in the United States."

    It was only a week or so ago that Walgreens (drug stores) aborted their plan to do a tax inversion maneuver in order to improve their profits (by reducing their income taxes - which would have presumably been for the benefit of their shareholders). And this week it was Burger King who seems to be going ahead with their inversion - also presumably for the benefit of their shareholders..

    Walgreens. I don't suppose the general public will ever know the real story of why Walgreens gave up on the idea. Do you suppose it could have been because the Anointed One suggested that taking advantage of an inversion was not patriotic?? Of could someone from the IRS have called up and promised a series of unending audits if they went through with the inversion (like reportedly happened to the banks that neither needed or wanted the Anointed One's "bailout" several years ago)?? Or, perhaps some other motivation provided by the Anointed One?? We can only wonder if Walgreens will hand over all the money they didn't save to the Anointed One or if they will reduce prices to the advantage of their customers. Those would seem to be the only alternatives available to them. The stock holders will certainly not benefit from the company paying more taxes than they would have after 'inversion". If they reduced prices thereby reducing their margins (read profits) they could at least benefit their customers rather than handing the money over to the Anointed One to waste on the latest handout he or his spear carriers dream up.

    Burger King. Since late 2010 the majority owner of Burger King has been 3G Capital of Brazil, which may help explain why the "unpatriotic" argument didn't seem to register with them. Surely the folks in Brazil aren't any more interested in being patriotic to the benefit of the U.S. than we Americans are interested in being patriotic to the benefit of Brazil. Burger King share holders will likely see improved dividends. More power to them...

    Actually, tax inversions are not really a new phenomena. The following list of inversions was taken from Wikipedia:

    McDermott International to Panama, 1982

    Helen of Troy to Bermuda, 1994

    Tyco International to Bermuda, 1997

    Fruit of the Loom to the Cayman Islands, 1998

    Ingersoll Rand to Bermuda, 2001

    Transocean to Switzerland, 2008

    Ensco plc to the United Kingdom, 2009

    Eaton Corporation to Ireland, 2012

    Actavis to Ireland, 2013

    Liberty Global to the United Kingdom, 2013

    Chiquita to Ireland, 2014 (pending)

    Applied Materials to the Netherlands, 2014 (pending)

    Abbvie to Ireland, 2014 (pending)

    Medtronic to Ireland, 2014 (pending)

    Mylan to the Netherlands, 2014 (pending)

    Burger King to Canada, 2014 (pending)

    There have likely been others. Clearly, it has been going on for a long time. It seems likely to continue until Congress interjects some sensibility into our corporate tax laws. There is certainly no excuse for the U.S. having the highest corporate tax rates on the globe - other than that the Dems believe that the more you tax folks, the more money you collect (which has time after time proven to be a fallacious argument). They don't seem to be able to understand that government revenues have more "moving parts" than simply taxable income and tax rates.

    And while we are talking about "patriotism" and taxes, why do you suppose that so many Corporations are Incorporated in Delaware?? Could it possibly be because over the years Delaware's well established business friendly legal precedents, regulations, etc. favored the corporations and thus have served as a magnet for businesses?? Apparently a lot of folks believe the short answer is "Yes". Reportedly some 60 percent of Fortune 500 firms and 50 percent of the corporations listed on the New York Stock Exchange are incorporated in Delaware. That's a bunch...

    We are left to wonder why the Administration seems to accuse only Corporations of being unpatriotic when they seek to reduce their tax burden - even when they do it legally (not that "legal vs illegal" seems to make much difference to the Anointed One and his Administration).

    According to TrueblueNZ, over several years (actually, more than "several") Warren Buffett (the Anointed One's main "Increase Taxes on the Rich Advocate") has been in a battle with the IRS over about one billion in taxes they claim he owes. That would be the same Warren Buffett who reportedly put up in the neighborhood of $3B in support of the Burger King inversion. Talk about hypocrisy... Do you suppose he was already like that or did he "catch something" from the Anointed One and his administration?? To see the TrueblueNZ article, click here.

    Over the last three years the Anointed One has (legally) not paid taxes on some $ $1,072,206 of income ($1,106,606 actual deductions less allowable standard deduction of $34,400). Why that doesn't draw charges of being "unpatriotic" is certainly a mystery. (Not!!)

    BTW - Did anyone notice if Helle Thorning-Schmidt attended the NATO meeting the first week of Sept.?? Do you suppose there could be more selfies be in the works??

    D'ya Think??