Heritage Economist: It's Not Just Taxes Driving US Firms Away

Wednesday, 03 Sep 2014 07:45 PM

By Sean Piccoli

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The way to keep U.S. companies in America is not to kill off a tax provision that lets them re-incorporate abroad, but to fix the entire tax code, top to bottom, and create a less hostile business environment overall, Heritage Foundation Chief Economist Stephen Moore told Newsmax TV on Wednesday.

"This isn't just about taxes," Moore told "MidPoint" host Ed Berliner in a discussion of the so-called "inversion" deals that have seen large companies renounce their U.S. corporate citizenship and merge with firms based in countries boasting lower tax rates.

"America just isn't competitive these days with respect to policy: the regulations, the banking laws, a lot of talk of raising the minimum wage here," said Moore.

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"All of these are anti-business and make America an unattractive place to do business in," he said.

The result, said Moore, is companies "leaving the United States in droves."

"We've seen dozens of them in the last few years, and major American companies have been talking about this or actually moving — companies like Pfizer, one of our most important medical companies. Companies like Walgreen's. Now Burger King.

"I mean, my goodness, what needs to be the wake up call — when McDonald's leaves the United States?"

Moore said that President Barack Obama's desire to close the inversion loophole is tantamount to building a corporate "Berlin Wall" around U.S. companies "so they can't leave," and doesn't address the core problems: the world's highest corporate tax rate and an unfriendly business climate.

"A lot of the CEOs feel like they have a fidiciary duty to their shareholders to move out," said Moore, "and I want a tax system that incentivizes them to come here and create jobs in America."

"Unless we fix this," he said, "you're going to see more and more iconic American companies leave the United States."

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