[Ed. – Stop being morons about this, people. Got your attention now? This isn’t a one-dimensional taxation problem. It’s a REGULATION problem, as much if not more. This cannot be fixed solely by revising the tax code, as author Andrew Sorkin suggests. The effects of BOTH regulation and taxation are cumulative. The prohibitive American regulatory environment at both state and federal levels must be addressed. Stop saying “taxes” over and over again as if that’s a magic incantation. If you must, say “regulation” over and over again, to get it into your head. And stop arguing just because you understand taxes better. Not understanding the fell effect of regulation will kill you.]
[Auto parts supplier] Johnson Controls said on Monday it was renouncing its United States corporate citizenship by selling itself to Tyco International, based in Ireland, a deal struck in large part to reduce its tax bill, which it said should drop by about $150 million annually.
Monday’s announcement by Johnson Controls is just the latest effort by corporate America to flee the United States. In the last year, Pfizer said it was leaving for Ireland, as did Medtronic, the medical device maker. Coca-Cola’s largest bottling company, after selling its domestic operations, is heading to Britain. (The company, Coca-Cola Enterprises, insists it isn’t for tax reasons.)
Until Washington lawmakers reform the tax code, we will continue to see an exodus of American companies from our shores in search of a lower tax rate. By my count, based on a series of conversations with investment bankers, there are probably at least another dozen deals of meaningful size being negotiated in the pipeline. The question is what it will take for Congress to not only take notice, but to pass legislation to thwart this steady corporate migration.