U.S. Firms Move Abroad to Cut Taxes

More big U.S. companies are reincorporating abroad despite a 2004 federal law that sought to curb the practice. One big reason: Taxes.

Companies cite various reasons for moving, including expanding their operations and their geographic reach. But tax bills remain a primary concern. A few cite worries that U.S. taxes will rise in the future, especially if Washington revamps the tax code next year to shrink the federal budget deficit.

“We want to be closer to where our clients are,” says David Prosperi, a spokesman for risk manager Aon AON +0.21% plc, which relocated to the U.K. in April.

Aon has told analysts it expects to reduce its tax rate, which averaged 28% over the past five years, by five percentage points over time, which could boost profits by about $100 million annually.

Since 2009, at least 10 U.S. public companies have moved their incorporation address abroad or announced plans to do so, including six in the last year or so, according to a Wall Street Journal analysis of company filings and statements. That’s up from just a handful from 2004 through 2008.

The companies that have moved recently include manufacturer Eaton Corp., ETN -1.02% oil firms Ensco International Inc. ESV -2.46% and Rowan Cos., RDC +0.33% as well as a spinoff of Sara Lee Corp. called D.E. Master Blenders 1753.

Eaton, a 101-year-old Cleveland-based maker of components and electrical equipment, announced in May that it would acquire Cooper Industries PLC, another electrical-equipment maker that had moved to Bermuda in 2002 and then to Ireland in 2009. It plans to maintain factories, offices and other operations in the U.S. while moving its place of incorporation—for now—to the office of an Irish law firm in downtown Dublin.

Read more here.

13-Year-Old and Family Behind MI Hot Dog Stand Now Homeless — And Gov’t Regs Continue to Strain Income

Through burdensome regulations and fees, authorities in Holland, Mich., have made it nearly impossible for 13-year-old entrepreneur Nathan Duszynski to operate a hot dog stand, TheBlaze’s Erica Ritz reported last month. And now there’s been another twist: His family, with its only hope of reliable income on the brink, has now been forced to move into a homeless shelter.

(By the way, the whole reason Nathan started his business was to raise cash for his disabled parents.)

When Nathan’s story first broke earlier this month, he found sympathy among many of Holland’s residents. In fact, one local businessman even bought the stand from Nathan, allowing him to operate it at no cost.

But then things got tougher for Nathan’s family — and Holland authorities aren’t helping anything.

The 13-year-old businessman and his mother are currently living in the Holland Rescue Mission and, right now, the hot dog stand is their only source of reliable income.

“We don’t have the money to move out,” Lynette Johnson told MLive.com, “It’s embarrassing, but it’s the truth.”

Luckily, ever since the kindhearted businessman bought the stand and let the young entrepreneur operate it for free, Nathan has been busy booking private events in West Michigan — one step closer to getting out of the shelter and one step closer to economic independence.

But do you really think it’s going to be that easy? Guess again.

“We’re trying to keep [the business] going for Nate, but it’s costing more money at this point when he’s not set up every day,” said Lynette.

Read more here.

Joey Vento DID Build Geno’s Steaks

Long hours and hard work helped Joey Vento build a landmark restaurant in Philadelphia from the ground up, but that work ethic may have also sent him to an early grave.

That’s why Eileen Vento’s blood boiled when she heard President Obama declare last week that small business owners like her husband owed others for their success.

“That is ridiculous. My husband had $6 in his pocket when he started.” Vento said to FoxNews.com about Joey Vento, who opened Geno’s Steaks in 1966 in the neighborhood of South Philly.

“He worked hard his whole life to build the place up. We made a lot of money. Unfortunately, he didn’t get to enjoy it,” she added.

Vento worked at the shop right up until a heart attack killed him last August at age 71. His widow believes 45 years of toil to build a prosperous life for his family took a toll on him. She bristled at the comment Obama made during a campaign stop in Roanoke, Va., last Friday when he said business owners owed some of their success to help along the way, noting that government often provides the infrastructure needed for success.

“If you got a business, you didn’t build that. Somebody else made that happen,” Obama said. “If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive.”

The comments created a backlash among small business owners and others across the country who feel that entrepreneurship is the backbone of the American economy. Vento’s sister-in-law said Joey Vento owed his success to his own hard work and the loyal customers he cultivated.

“He went there at 3 or 4 in the morning and stayed until 11 every night. He did it seven days a week,” said Diana Vergagini. “And when he wasn’t there he’d call in at every shift change asking, ‘How did we do? What’s the bread count? What’s the steak count?’”

Vento gained national notoriety in 2006 when he posted a sign at the order window that read, “This is America: When ordering please ‘speak English.’”

Read more here.

Small Businesses, Big Sacrifices

[Dan Bongino is running for US Senator from Maryland. Promoted from the diaries by streiff.]

I awoke this morning at 5am to the sound of my six month old daughter Amelia crying. When I entered her dark room I saw my wife, struggling to stay awake, holding Amelia in one arm as she was attempting to work on her barely lit computer screen with her other arm. My wife Paula is an entrepreneur and a business owner, she also happens to be a first generation immigrant, who suffered through much chasing her American dream–all of her hard work culminating in her pledging allegiance to our flag as part of her citizenship ceremony, still one of the proudest days of our lives.

I am writing of this incident because it succinctly describes a scenario repeating itself all over America today. Small business owners are making incredible sacrifices in the struggle to keep their businesses afloat. This is the reason the President’s “you didn’t build that” comment has infuriated Americans across the political spectrum. The simple fact is that my wife did build “that.” She built her business, through countless hours of hard work and a commitment to a quality work product. I marvel daily at the countless hours she spends at her home office designing and repairing small business websites. She is the very epitome of the American dream, collectively enhanced but most importantly, self-made and personally driven.

The President’s statements are equally infuriating because he is attempting to create a fissure between Americans where there isn’t one. No Republican I am aware of is running for office on a platform of no taxes, no roads, no teachers and no military. I cite these examples because the President chose to mention the use of roads, the work of good teachers and the development of the backbone of the modern internet, through a military research initiative, as examples of how government should be the primary recipient of accolades for individual success. This is absurd and displays a backward logic which is hard to justify. It is the very success of people, such as my wife, willing to put their names behind a business endeavor, with no guarantee of success, that finance the government’s spending and projects the President speaks of. It is my wife’s–along with millions of others struggling for a better tomorrow–sweat, toil and willingness to take a risk that has made America exceptional amongst nations, not its roads.

The economy is clearly struggling, Americans are hurting and they are scared. Scared, that for the first time, yesterday may have been the best it was ever going to be. This has never been a part of our national psyche. The President’s statements will haunt him in this election as they echo all over our vast country. As my wife and I struggle through this wretched recovery, I feel the pain of Americans hoping and praying that there is a better tomorrow and I ask the President to stop creating division by asking who built what, and to focus on getting our growing legion of unemployed Americans, just asking for a chance to build anything, back to work.

Read more here.

Company Policy: ‘We Are Not Hiring Until Obama Is Gone’

A recent report claims that a Georgia business owner has been posting “controversial” signs on his company’s trucks.

What do they say?

“New Company Policy: We are not hiring until Obama is gone.”

“Can’t afford it,” explained the employer, Bill Looman, Tuesday evening in a recent 11Alive report. “I’ve got people that I want to hire now, but I just can’t afford it. And I don‘t foresee that I’ll be able to afford it unless some things change in D.C.”

Looman‘s says he put the signs on his company’s trucks and posted pictures of them to his personal Facebook page six months ago. When he originally did that, he said that he received mostly positive reaction from people, “about 20-to-one positive.”

However, one of those pictures went viral on Monday and the reaction was enormous.

In fact, the reaction was so huge that Looman had to disconnect his phones because of the non-stop calls, and he‘s had to temporarily shut down his company’s website “because of all the traffic crashing the system,” 11Alive reports.

Read more here.

Government Investigates Rancher

The Montana Department of Employment, Division of Labor Standards claimed a small rancher was not paying proper wages to his help and sent an agent out to investigate him.
GOV’T AGENT: “I need a list of your employees and how much you pay them.”

RANCHER: ”Well, there’s my hired hand who’s been with me for 3 years. I pay him $200 a week plus free room and board.
Then there’s the mentally challenged guy. He works about 18 hours every day and does about 90% of all the work around here.

He makes about $10 per week, pays his own room and board, and I buy him a bottle of bourbon every Saturday night so he can cope with life.

He also sleeps with my wife occasionally.”
GOV’T AGENT: “That’s the guy I want to talk to – the mentally challenged one.”

RANCHER: “That would be me.”

Government is the biggest job killer

President Obama says government will have to build the nation out of the economic trough.

“We’re the country that built the intercontinental railroad,” Obama says. “So how can we now sit back and let China build the best railroads?”

Ironic that he mentions the Chinese. Progressives used to complain that to build the railroad, bosses abused Chinese workers — called them “coolies” and treated them badly. Now this is big success?

I guess Obama doesn’t know that the Transcontinental Railroad was a Solyndra-like Big Government scandal. The railroad didn’t make economic sense at the time, so the government subsidized construction and gave the companies huge quantities of the best land on the continent.

As we should expect, without market discipline — profit and loss — contractors ripped off the taxpayers. After all, if you get paid by the amount of track you lay, you’ll lay more track than necessary.

Credit Mobilier, the first rail construction company, made enormous profits by overcharging for its work. To keep the subsidies flowing, it made big contributions to congressmen.

Where have we heard that recently?

The transcontinental railroad lost tons of money. The government never covered its costs, and most rail lines that used the tracks went bankrupt or continued to be subsidized by taxpayers.

The Union Pacific and Northern Pacific — all those rail lines we learned about in history class — milked the taxpayer and then went broke.

One line worked. The Great Northern never went bankrupt. It was the railroad that got no subsidies.

We need infrastructure, but the beauty of leaving most of these things to the private sector — without subsidies, bailouts and other privileges — is that they would have to be justified by the profit-and-loss test.

In a truly free market, when private companies make bad choices, investors lose their own money. This tends to make them careful.

Read more here.

The American Jobs Act: Why It Will Not Create Jobs

President Obama, last night, outlined his latest greatest proposal for creating jobs: The American Jobs Act. It’s a combination of some good things (tax reductions) and some bad things (tax increases). It’s his grand plan to finally focus on jobs (after 3 years with unemployment over 9%). All of the past stimulus weren’t enough so we are going to try it again with more stimulus money.

What’s that definition of insanity? Doing something over and over and expecting a different result. I expect the result after this stimulus to be the same. Why? Because government doesn’t create jobs.

I’m going to explain how a small business grows in simplest of terms regarding hiring. Since there does seem to be agreement that 70% of the jobs in the United States are created by small businesses then it seems relevant to review how those jobs are created by the small business owner.

You are a small business person. You had an idea. You took a risk. You worked on your idea, you sold your idea, and you managed to make a profit from your sales. The key word here is PROFIT. You have to profit from your enterprise so that you have money to put back into your enterprise. Once you have made enough profit, you can hire additional people. That is how small businesses expand. They make a profit and then invest those profits in expansion by hiring people. Without profits they cannot expand. Without expanding they’re not hiring.

So, President Obama says he is going to extend the payroll tax holiday. That’s great news for the small business owner. But in the next sentence he says he’s going to eliminate those corporate tax loop holes. Huh? If I’m a small business owner I’m listening very carefully to that and here’s what I’m hearing: He’s going to raise my taxes. What does that do? It reduces my profit. What happens when my profits are reduced? I cannot expand and I cannot hire.

Mr. President, wake up and smell the coffee. You have demonized those horrible people that make a profit to the point where they don’t trust you. Nothing would make the small businessman happier than to expand and hire again. But it requires money – profit! And as long as you keep telling them you’re going to reach into their pockets and take it, they will not be hiring.

The American Jobs Act, even if passed, will not create jobs.