Medtronic Inc. is moving abroad to escape America’s high tax rates. As one of the world’s largest medical device companies, Medtronic recently acquired Covidien for $42.9 billion in a move that will relocate headquarters from Minneapolis to Ireland.
Why? Consider the facts:
Medtronic’s corporate tax rate will drop from America’s 35 percent rate to Ireland’s 12.5 percent rate.
The highest statutory U.S. corporate income tax rate is 39.1 percent, higher than any other member country of the Organization for Economic Cooperation and Development (OECD).
Corporations headquartered in the 33 other industrialized countries (not including the U.S.) that make up the OECD, however, face an average rate of 25 percent.
Between 2000 and 2011, the U.S. experienced a net loss of 46 Fortune Global 500 company headquarters, according to a report by Ernst and Young.
Foreign profits held overseas by U.S. corporations to avoid taxes at home nearly doubled from 2008 to 2013 to top $2.1 trillion
Businesses constantly seek ways to increase revenue and decrease costs. That's what successful and profitable businesses do. Taxes have now become the biggest cost that many companies can do something about. It's that simple!
We have been living in a global economy for decades, buoyed by advances in information, communications and transportation technology.
Companies such as Medtronic operate to satisfy customers, stockholders and employees. They do not operate to satisfy the expectations of liberals, government bureaucrats or the mainstream media.
In a globally competitive world, this exodus of U.S. companies will continue until the Congress of the United States of America shows some courage and completely replaces the tax code. Merely reforming the existing code or promising to lower tax rates, as some politicians have done for decades, is not the solution.
Liberals really don't care that businesses are leaving this country for more business-friendly nations. They believe we have an endless supply of businesses that will endure indefinitely the burdensome tax, spending and regulatory policies imposed by our federal government. World history teaches us differently, which liberals ignore or deny.
Liberals can't even bring themselves to agree to a no-brainier decision to suspend U.S. taxes on the estimated $2.1 trillion in profits held overseas! It would cost our treasury nothing, and billions of dollars might be redeployed here at home.
Liberals and some conservatives also do not want to surrender control of our hard earned money back to us. Replacing the tax code with either the Fair Tax or 9-9-9 would do just that, and supercharge our stagnant economy.
When President Obama told a businessman during a speech that "you didn't build that", he insulted every business person, entrepreneur and investor in this country. It showed that the president does not understand sweat equity and risks.
Well, Medtronic and other businesses have decided to go to countries who do understand sweat equity, risks and profits – and that "they did build that"!
