There Goes the Neighborhood

You live in a neighborhood where every time you step out the door, a group of thugs grabs you and take your money. They leave you a few bucks but they take much of it.  The same thugs dictate where you can go, what you can do, who you can hang out with and how you may spend your life. They are on top of you. Always.  Jamming new rules and demands down your throat.

And then someone from the neighborhood says “I moved to a new neighborhood. There are thugs but they’re not so bad.” And so what do you do? What would you do? Move?  Hmmm?   And so we have “inversions.”

The United States is one of the most heavily-taxed and heavily-regulated countries in the world (if you disagree – try Google).  The corporate tax rate is now the highest in the world.  And we punish and demonize the shrinking number of businesses and individuals who actually pay taxes (think Pareto’s Principle).  We are lurching toward the insidious social system that has wrecked Europe’s economy.   So you tell me — what is corporate America supposed to do?  American businesses are under siege.  Regulatory walls are closing in.  Roofs are collapsing.  The smart move is to get out of town.  So some do.  Moving operating headquarters overseas or at least to states which are conducive to business.   After all – why stay in a neighborhood that hates you?    

There’s a big difference between evading taxes and avoiding taxes.  The ignorant say that corporations (and individuals) are evading taxes.  That’s a lie.  Businesses take advantage of legal exemptions (do you cheat because you take a mortgage deduction?).  And they avoid taxes.  Legally.  If those in Washington were smart, they would revise the punishing tax code and make America competitive with the rest of the world.   But that’s expecting way too much.  Ideology and politics get in the way.  Great. 

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