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| Volume 4, Issue 3 - March, 2005 • Taxes as a Competitive Advantage in the Global Economy Building an ownership society in a tax competitive world. “In America's ideal of freedom, citizens find the dignity and security of economic independence, instead of laboring on the edge of subsistence. This is the broader definition of liberty that motivated the Homestead Act, the Social Security Act, and the G.I. Bill of Rights. And now we will extend this vision by reforming great institutions to serve the needs of our time. To give every American a stake in the promise and future of our country, we will bring the highest standards to our schools, and build an ownership society. We will widen the ownership of homes and businesses, retirement savings and health insurance - preparing our people for the challenges of life in a free society. By making every citizen an agent of his or her own destiny, we will give our fellow Americans greater freedom from want and fear, and make our society more prosperous and just and equal.” I love the sound of the words, “ownership society,” but having recently written about how overhead burdens in this country are driving businesses overseas, I didn’t understand how this could happen until I read the Journal article and now my hope is soaring. Simpson begins the Journal article with, “European countries have been steadily slashing corporate-tax rates as they vie for foreign investment, potentially adding to pressure on the U.S. for similar cuts as it weighs a tax overhaul.” Examples of what is happening in Europe can be seen in the following table:
The article points out that while many large U.S. businesses use loopholes and shelters to pay far less than the national rate suggested, even the effective rate is still as much as 10% above Europe’s average. The result is that Europe is addressing the overhead issue via tax reductions to woo U.S. companies to expand in Europe rather than at home. This potentially moves jobs and revenue offshore. We truly are in a global economy and must compete in that global economy not only for customers and revenue, but now governments are competing for business and jobs in their countries. It’s a beautiful thing. The last major rate reduction in the U.S. corporate rate came in 1986. Since then deductions and shelters have proliferated and businesses have become more adept at creating profits offshore rather than at home to avoid the high tax rates. For example, in 1999 U.S. Companies reported $13.3 billion in profits in Ireland. With the tax reduction in Ireland, profits in that country have jumped to $26.8 billion in 2002. Europe is becoming much more business friendly and if the U.S. wants to increase jobs and tax revenues, they are going to have to become much more competitive from a tax standpoint. The words “ownership society,” the journal article and my article, “The Overhead is Killing US”all merged together in my mind to paint a very different picture of a potential future for the U.S. and the World. If governments are awakening to the idea that businesses create profits and jobs (without which there are no tax revenues), then maybe there is hope that the world is changing and the resulting competition by governments will make the possibility of an “Ownership Society” a very real possibility. • Momentum Model Debuts on Website Do not worry about the privacy of your contact information as we keep that information confidential and will not add anyone to our newsletter mailings unless the box is checked yes on the diagnostic. We encourage you to invite others to participate in the diagnostic and of course we welcome your thoughts and suggestions about this new tool. • IFMA Management Summit • Building Brands Mayonnaise Make-Overs
If you have a subject that you would like to see covered in future issues of “Taking Aim,” please send me an email at aim@CannonAdvantage.com.
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Robert E. Cannon "Best Practice" Sales Force
Development Change Management Customer Service Assessment for ISO Requirements Smart Thoughts from Smart People – "Good humor is a tonic for mind and body. It is the best antidote for anxiety and depression. It is a business asset. It attracts and keeps friends. It lightens human burdens. It is the direct route to serenity and contentment." Grenville Kleiser
"Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude." Thomas Jefferson
"One should take good care not to grow too wise for so great a pleasure of life as laughter." Joseph Addison
"It is our attitude at the beginning of a difficult task which, more than anything else, will affect its successful outcome." William James
Taking Aim © 2005 Bob Cannon, The Cannon Advantage Newsletter. All Rights Reserved. The Cannon Advantage visual branding by Zarney Creative. For contact information, click “Resources.” |
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