If all the "tenants" of this five-story house in the Caymans showed up at the same time, it might get a little crowded — there's 18,857 of them.
That's right, almost 19,000 corporations have listed their official address at Ugland House, an office building on South Church Street, Georgetown, capital of the Cayman Islands. Talk about full occupancy.
Among the corporations who do business from this address are Seagate Technology, world's biggest manufacturers of hard disk drives, and Intel Corp., world's largest chip maker.
But there are countless other companies with addresses here or elsewhere in the Caymans, including about 25 of the 100 largest contractors who do business with the U.S. government, including Altria Group Inc., and Tyco International Ltd., according to a report in Bloomberg News.
What's so great about the Cayman Islands besides the tropical weather? There's no corporate income tax for firms incorporated there.
And Obama wants to strangle this golden goose with new tax reforms designed to raise some $210 billion over the next decade.
The current U.S. corporate tax is 35 percent. Bloomberg says Seagate paid only about five percent in their fiscal year 2008, ending last June.
Multinational businesses are not happy, to say the least, about Obama's proposal to close Cayman Island tax loopholes.
"It's really hitting most Fortune 100 companies that depend to a great deal on growth of foreign markets for growing their total earnings," said Drew Lyon, a tax adviser to Fortune 500 companies with Pricewaterhouse Coopers in Washington, D.C.
Investor extraordinaire Wilbur Ross sees great risk in President Obama’s plan to raise $210 billion by increasing taxes on U.S. companies’ income held overseas.
The chief executive of WL Ross & Co. doesn’t have a problem with the administration cracking down on individuals who hide money abroad to avoid taxes.
“There was a big scandal involving some of the large banks aiding and abetting American citizens to evade their U.S. taxes through a variety of offshore things,” Ross explains to CNBC.
“The part that’s more complicated is about the corporations,” he says.
“It almost sounded as though he was intending to be punitive on corporations that had extensive overseas operations.”
There, Ross is concerned.
“To the degree that’s true, I think it would be a huge mistake, because one of the reasons that many of the U.S. corporations are prospering is in fact their participation in the more rapidly growing markets overseas,” he says.
“I think that’s a very dangerous slope.”
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