Sam Adams may not be American for long
Special to The Union
U.S. corporate taxes are the highest in the world, according to Wikipedia.
It is said money flees to friendly shores — meaning companies set up shop where it best benefits them and the tax they pay is definitely considered either a benefit or hindrance.
Corporations look to maximize profits and the less taxes they pay the more profits they keep.
Although the U.S. sports many benefits for corporate locations, the highest tax rate in the world certainly doesn’t help new businesses to start here nor existing businesses to stay.
A handful of U.S. companies including pharmaceuticals giant Mylan and medical device maker Medtronics have already fled U.S. shores using the strategy called tax inversion.
Wikipedia defines tax inversion or “corporate inversion” as the relocation of a corporation’s legal domicile to a lower-taxation, or corporate haven — usually while retaining its material operations in its higher-tax country of origin.
The latest company to start discussing the possibility of it relocating is Sam Adams brewery, the Boston Beer Company.
Ironic, isn’t it?
The company with its most popular beer named after a hero of the Revolution considers leaving for the same reasons the revolution started: onerous taxation by its central government.
Although Boston Beer Company is not moving yet, its chairman Jim Koch told a Senate Subcommittee “because of our broken corporate tax structure, I can honestly predict that I will likely be the last American owner of Boston Beer.”(Bloomberg News)
With familiar cat calls of “paying their fair share” and “corporations are not people,” many believe corporations don’t pay enough in taxes, blaming higher prices on the companies themselves.
Others argue high prices are to blame on Federal Reserve money printing programs like Quantitative Easing (QE) and low interest rates — which by definition cause inflation by increasing the money supply in world of scarcity.
No matter what the belief, the fact remains companies are relocating offshore to avoid the highest corporate taxes on the planet.
With talk of even higher taxes by the left side of the political aisle, the U.S. may lose even more companies and the jobs they offer as company CEOs look to greener pastures.
This article expresses the opinions of Marc Cuniberti. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at MKB Financial Services 164 Maple St #1, Auburn, CA 95603 (530) 823-2792. Their website is MKBFINANCIAL.COM. MKB Financial Services and Cambridge are not affiliated.
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