• Taxes as a Competitive Advantage in the Global Economy

Building an ownership society in a tax competitive world.
Like many fellow citizens of this great country, I listened to the President’s Inaugural Address on January 20th. It was interesting, but it just flowed over me with nothing really sticking out in my mind until I heard the words, “building an ownership society.” As my life pressed forward, those words stuck with me as great sounding but with nothing to connect them to anything until I read Glenn R. Simpson’s article, “As Europe Cuts Corporate Tax, Pressure Rises on U.S. to Follow” in the January 28th edition of the Wall Street Journal online. Those words came back to mind and I promptly went on line to find that section of the Presidents speech and offer it below:

“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
Mid-month we sent out a special edition of “Taking Aim” to announce the changes made to the Cannon Advantage website. If you have not yet had a chance to experience the Momentum Model Diagnostic, we encourage you to give it a try. If you have a number of people from your organization participate, we can schedule a time to provide you with more information about your organization based upon the combined input from your participants.

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
If any of you are planning on attending the IFMA Management Summit at the Gaylord Palms Resort in Orlando on March 11th, please plan on attending Bob’s presentation on “How to Make the Right Choice…at the Right Time.” Decision-making has always been a risky business, but in today’s environment of speed, information overload, uncertainty and change, it is more challenging than ever. This session will present the Taking Aim method, a step-by-step process that bypasses the pitfalls of old decision-making methods and facilitates better decisions faster, with accountability, organizational alignment behind the decision and greater likelihood of successful implementation.

• Building Brands Mayonnaise Make-Overs
How do you reinvent a common product and turn it into something new and exciting? Many food companys are enlisting the help of designers for ideas. Take a look around the next time you¹re in the grocery store. Have you seen the current television ads for the new, rectangular, wide-mouth mayonnaise jars? Hellman¹s is also now available in kid-friendly squeeze bottles. Major brands of all types are looking for innovative ways to add convenience to products you already know. Folgers did it with their new AromaSeal canister. 

Think about it. Would your brand benefit from a packaging make-over?

If you have a subject that you would like to see covered in future issues of “Taking Aim,” please send me an email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .