… and also cut their tax bills substantially.
My Facebook feed is packed with people talking about emigrating to Canada in order to escape the prospect of President Donald Trump.
What about principled corporations? Burger King was criticized by advocates of Bigger Government for skipping out on “hundreds of millions of dollars in U.S. taxes” via a Canadian inversion (Reuters). Now that the specter of Donald Trump is stalking our land, could a corporation become Canadian and be celebrated by fans of a Bigger U.S. Government?
Ernst & Young says that the combine federal and provincial corporate tax rate in British Columbia, for example, is 26 percent (source). A successful Silicon Valley firm, such as Apple or Google, is theoretically subject to 8.84 percent California tax (flat rate says the Tax Foundation) plus roughly 35 percent in federal corporate tax (Wikipedia). Of course, Apple doesn’t actually pay this due to their “Double Irish arrangement” but not all firms can work this angle and, at some point, a Bernie Sanders-like figure might shut down the escape hatches.
Nearly every other country on the planet has lower corporate taxes than the U.S. Should we expect to see corporation emigration in 2016 under the banner of “We are morally opposed to Donald Trump?” This would allow a company to escape U.S. corporate taxes and also occupy the moral high ground in the eyes of all consumers except the minority who are passionate Donald Trump supporters.