10 Big U.S. Businesses That Have Moved Their HQ Abroad to Pay Less Taxes
focus.com
focus.com
Going Galt anyone? Related article: http://finance.yahoo.com/banking-budgeting/article/107123/Mi...
There should be a guide or services for smaller companies and Startups to incorporate in tax shelters so they too can enjoy the tax benefits and thus level the playing field with the big boys. Are there such resources around?
There is nothing preventing you from moving to a country with more favorable tax laws, especially with a business based around the Internet. If your sentence was meant to reference money, well that's something every company goes through in the early stages. At that stage the best you can hope for is to turn a profit and get to the point where barriers to entry kick into effect.
As an example, consider that no matter what interpretation of any tax law you get from an IRS employee, it will not hold up in court - if an IRS agent tells you to do A, then the IRS decides later to disallow A and that you should have done B, they will hit you up with taxes and penalties and you have no recourse.
UNLESS, you pay money for an IRS administrative ruling; then, you can use that response in tax court. The key is that the cost for such rulings are $50K. Each.
See: http://www.irs.gov/newsroom/article/0,,id=151979,00.html
/sarcasm
It will all come tumbling down eventually.
Some might argue that education, welfare, etc are beneficial to a corporation, but in reality they're not. They are to benefit the community -- the individuals receiving the output of those services. Of course a company requires educated people and if there aren't any available then they will have to develop schools to train their employees (something that has been done in the past).
My point is, when everyone stops paying taxes, there won't be any educated people anymore. Each company will have to get into the business of training people, making the cost higher than not paying taxes.
Classic tragedy of the commons.
Not to mention that in the UK it's been shown that private and State education actually cost about the same per student... If the government just got out of the way, everyone could afford a good education for their kids.
To what extent will a government go to protect your investment/property? Are you big enough where the potential for loss is an acceptable risk? If so and your business is very liquid and global then I see no problem in having an HQ elsewhere. What do you care where their HQ is? Most likely, their investors are still collecting profits in the US. The saved money from taxes drives up equity, reinvestment, research and development. Am I crazy for not caring where a business is centered? I guess I don't watch enough Lou Dobbs.
My guess is that it is better for a business to be under a common-law jurisdiction. The legal system in most of the world is of a type called civil law, as contrasted to common law, but common law tends to protect property better because property is more central to its conceptual framework. Nick Szabo argues convincingly for the superiority of common law over civil law on his blog, http://unenumerated.blogspot.com.
One of Dubai's economic zones uses common law. (They hired a retired English judge to run the legal system in the zone.) added. Bermuda and the Cayman Islands use common law, too.