Missouri’s legislature has approved nearly $2 billion in tax incentives for Boeing after a House vote today, and the plan awaits Governor Nixon’s (D) signature. We’ve written on this issue extensively, following it from...
- The Tax Policy Blog
- Switzerland Attracting European Offices of U.S. Companies
Switzerland Attracting European Offices of U.S. Companies
Apparently Switzerland is the place to be for lower taxes:
This fall, U.S. fast-food giant McDonald's will move its European headquarters to Geneva from London, joining Kraft Foods, Yahoo!, and Nissan. They've all relocated their main Europe offices to Switzerland in the last two years to take advantage of low corporate taxes.
A highly skilled workforce, leading universities, and strong intellectual-property laws also attract companies. Yet those low taxes are very much part of the lure. "There is a lot of interest from companies looking to shift their taxable profit to countries with lower rates," says Andreas Müller, an international corporate tax partner at KPMG in Zurich. Meanwhile, Britain and Ireland are increasing personal income tax rates for top earners. In the U.S., tax hikes seem inevitable. Switzerland has no such plans, says Stéphane Garelli, professor of competitiveness at IMD Business School in Lausanne.
Part of this sounds like actual tax rates (indeed, the U.S. has higher corporate tax rates than virtually every other industrialized nation), but part of this sounds like uncertainty. Merely suggesting that taxes will be going up seems to be enough to get businesses looking elsewhere for job creation and capital formation.
Taxes are of course just one factor that's considered when locating a business somewhere. But it's one of the factors. To have elaborate public services you need to have an economy, and bad tax policy can hurt efforts to bring about long-term economic growth.
Buy this blogger a cup of coffee!
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.