Over the last few months, stories of abuse have captured national headlines, highlighting the decisive effect it has on its victims. Abuse is never right and is certainly a crime. In that light, please also understand that what I am about to say should not be taken in any way that might diminish or exacerbate the pain of those who have been involved in abusive relationships. That is not the intent of this piece.
That being said, I would like to draw some behavioral response parallels and position another relatively hot topic in a comparison that you may not have considered to date, corporate inversion.
Corporations in the United States are widely criticized for a “lack of patriotism” by acquiring foreign companies to move headquarters abroad, which in turn lessens tax burdens. Critics of these corporations argue a lack of loyalty to the U.S. economy, while others see acquisitions as an economically positive decision.
I suggest, however, we scrutinize these relationships from a different angle.
Dwell for a minute on the predictable behaviors of abuse. These typically include: name calling, humiliation, controlling tendencies, threats, accusations, criticism, jealousy, anger, punishment, superiority, and manipulation, among countless others.
Abusive relationships can take many forms, yet these core behaviors are prevalent. Comparatively, when the U.S. government shames corporations as they flee the country, we see similar traits; the U.S. becomes abusive, leaving corporations as the undeserving victim of bureaucratic relationships.
The U.S. government has publically shamed and humiliated companies for inversion, diminishing and damaging brand value. For example, Burger King and Walgreen’s have both suffered the undeniable damage from public degradation, even though their actions are both legal and fiscally sensible.
These controlling tendencies by governmental agencies indubitably stem from the growing threat of financial loss.
Stereotypically, abusers prefer to have their victims in a weaker state by limiting their financial freedoms. In corporate taxation, as we all have learned, the U.S. is one of the most aggressive in rates demanded. To illustrate, according to an OECD chart comparing international corporate tax rates, the U.S. soars above worldwide averages.
This significant demand is abusive. Moreover, Treasury Secretary Jack Lew recently released new rules making it more difficult for corporations to escape the manipulation, coercing corporations to stay with threats of financial repercussions.
Recent headlines highlight the ongoing battles:
In a world where markets are increasingly international and intertwined, while major economies are weakening, it only makes fiscal sense for corporations to protect revenue from oppressive tax rates.
If the U.S. Government is an aggressor and a corporation is a victim, should not the corporations flee for self-protection?
When you treat corporations appropriately, and in a “healthy” manner (i.e. reasonable tax rates), then inversion is not a concern. Retaining corporate headquarters stateside protects the government’s tax base, while lending a hand to patriotism and potential investments lending to economic growth here at home.
Thus posing the question: if inversion is unpatriotic, is corporate abuse patriotic?
November elections are right around the corner, bringing the topic to the forefront of every campaign. Every American must examine this issue. Your vote will ultimately determine whether organizations remain here in the U.S. without fear of threats, force, or punishment, or whether they flee to greater prospects abroad.
As patriots, let us keep our companies “Safe in America.”