The Associated Press published “US cracks down on companies moving overseas”. In that article, they reported that,
“ The Obama administration cracked down Monday on certain overseas corporate mergers and acquisitions, aiming to curb American companies from shifting their ownership abroad to shirk paying U.S. taxes.
“New regulations from the Treasury Department will make these co-called corporate inversions less lucrative by barring creative techniques that companies use to lower their tax bill. Additionally, the U.S. will make it harder for companies to move overseas in the first place by tightening the ownership requirements they must meet.
“This action will significantly diminish the ability of inverted companies to escape U.S. taxation,” Treasury Secretary Jacob Lew said. He added that for some companies considering inversions, the new measures would mean inverting would “no longer make economic sense.”
So, after 20 years of enacting NAFTA, GATT and other global free trade treaties to allow, encourage and even force US corporations to relocate their industrial factories and jobs overseas, the government is now reversing course.
Originally, government didn’t mind that global free trade would diminish America’s industrial base, cost American jobs, and lower the American people’s standard of living. After all, it’s not as if the government has any responsibility for the prosperity of average Americans.
Global free trade would cut labor costs and thereby increase the profit margins for multi-national corporations. Higher corporate profits should result in higher tax revenues for government (or at least more generous political campaign contributions (bribes) for Congress).
But now, there’s been a dramatic and unforeseen complication: allowing US corporations to emigrate to foreign countries hasn’t merely reduced the jobs, wages and standard of living for the great unwashed—it’s even cutting into government revenues!
Who’d’ve thunk it, hmm?!
What economist could possibly have had brains enough to predict that if we signed NAFTA, GATT and other global free trade treaties and thereby virtually forced American industries to relocate to Mexico, China or Bangladesh, we’d not only destroy the American people’s standard of living but also reduce government revenue?
Written by: ALFRED ADASK – continue reading at ADASK’S LAW