Individual taxpayers who think rates are too high can’t just stay in the USA and send their payments to another country, one where they have relatives, that offers lower rates. But corporations can and, increasingly, they do.
In the past decade, almost 50 companies — including Fruit of the Loom, Tyco International and Ingersoll Rand — have moved their taxable business addresses to places such as Bermuda, the Cayman Islands and various European countries with rates lower than the top U.S. corporate tax rate of 35% (39.1% if you include average state taxes).
On one hand, who can blame them? The U.S. rate is the highest in the developed world, and it’s legal to keep the company headquarters and most of the business in the USA but move the corporate address abroad by jumping through some regulatory hoops.
A survey of 300+ CEOs conducted in early May shows declining confidence in business conditions, even as economy reopens in many parts of the country and around the world. But there could be a silver lining.