American companies have been moving their production overseas to save money for years. But a disturbing new trend is seeing many American corporations move their headquarters to other nations in order to avoid having to pay taxes to Uncle Sam.
The Stanley tool company will soon be moving its corporate headquarters to Bermuda. Unlike in the United States, companies based in Bermuda do not have to pay taxes on overseas profits. Moreover, if a company sets up residence in a second sunny offshore tax haven, it can essentially avoid paying any taxes on the profits it makes in the United States as well.
There is nothing illegal about what these companies are doing, and they would argue that they are simply trying to stay competitive. But others feel that if corporations are reaping the benefits of doing business in America, they should have to pay their share of the taxes, even if they technically move their headquarters to some Caribbean Island. Moreover, if companies stop providing tax revenue, inevitably more of the tax burden will fall on ordinary Americans.
This hour, American companies move overseas to avoid taxes. Is it an outrage or a sound business decision?
David Cay Johnston, Reporter for the New York Times
Peter Baumbusch, partner at Gibson, Dunn & Crutcher
Grover Norquist, President of Americans for Tax Reform
This program aired on May 16, 2002.