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Friday, December 19, 2008

Obama Pushing Companies To Switzerland

Obama's one achievement in congress (sort of, because it didn't pass) was to close the tax loophole for American companies relocating their HQs to the Cayman Islands and Bermuda. Obama has consistently said that he will pass this legislation.

As a result, with this threat overhanging many American companies, we now have several large American firms relocating to Switzerland - Tyco, Weatherford, Foster Wheeler, Transocean, and now today, Noble (all in the last two weeks). Some of these companies are also considering moving their people in their HQ to Switzerland as well.

I have some advice for Obama. Instead of penalizing companies for moving their HQ outside the US, why not reward companies for staying in, and/or relocating TO THE US? If Obama were to reward in the form of a corporate tax cut (say from 35% to 25%), I can guarantee more companies would relocate to the US and more others would decide to stay.

Will one of his advisors please teach the man a little Econ 101?