June 6, 2009 by torqdog
Maybe the title should really read “Hey Prez…… your Chickens are leaving the Country”. It didn’t take long for Pres. Obama and his “tax and spend” Ilk to over-reach and threaten corporations with higher taxes. And it didn’t take long for reaction to start pouring in. Microsoft announced this week that if Obama goes through with plans to raise corporate taxes in this country, (we’re already one of the highest in the World) they may respond by moving ops overseas. Geez, that sounds like something the conservatives were warning everyone about during the campaign. You raise taxes and people simply vote with their feet. New Yorkers are experiencing this kind of financially inspired exodus with the likes of Rush Limbaugh and Donald Trump, recent migrants to more fertile soil. Say what you will about those two but money is green and there will now be less of it in New York for the morons in Albany to play with.
So now we may be witnessing the beginning of a similar exodus from this country with Microsoft being the first prominent example. Remember, corporations DON’T pay taxes…… they just pass the charges along in their pricing. Consumers again are the ones paying the bill whether corporate tax rates go up or down. It’s simply economics 101 that some of you must have skipped in school. ;-)
“June 3 (Bloomberg) — Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.
“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.
U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.
Microsoft reported an overall effective tax rate of 26 percent for 2008 in its last annual report. “Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates,” the report said.
Barry Bosworth, an economist in Washington at the Brookings Institution research center, said many software companies such as Microsoft have exploited tax and trade rules in the U.S. and other countries to achieve a low overall tax rate.”