bureaucracybusters

BENEDICT ARNOLD, CAPITALIST HERO: PART THREE (OF FOUR)

In Bureaucracy, History, Law, Politics, Social commentary on December 9, 2016 at 12:22 am

The British offered Revolutionary War General Benedict Arnold £20,000 for betraying West Point to the Crown.

Benedict Arnold

But Arnold was a piker compared to companies that are raking in literally billions of untaxed dollars by betraying the United States in its time of economic trial.

To avoid paying their legitimate share of taxes, they move their headquarters overseas to countries with reduced tax rates. In tax parlance, this is called an “inversion.”

For almost 20 years, tax-avoiding corporations fled to Caribbean countries such as Bermuda and the Cayman Islands. But in 2004, Congress ruled that American companies could relocate overseas if foreign shareholders owned 20% of their stock.

According to statistics compiled by the Congressional Research Service (CRS) in 2014:

“Forty-seven U.S. corporations have reincorporated overseas through corporate inversions in the last 10 years, far more than during the previous 20 years combined.

“In total, 75 U.S. corporations have inverted since 1994 – with one other inversion occurring in 1983. What’s more, there are a dozen prospective inversion deals involving U.S. corporations looking to reincorporate overseas, according to CRS

“The new data underscores the significant increase in the number of U.S. corporations that have or are seeking to lower their U.S. taxes by reincorporating overseas.

“It also adds urgency to a legislative solution. Ways and Means Committee Ranking Member Sander Levin in May introduced legislation that would tighten rules to limit inversions.

“The Joint Committee on Taxation estimates that the legislation would save $19.5 billion over 10 years. Companion legislation was introduced in the Senate by Sen. Carl Levin.

“‘Barely a week seems to pass without news that another corporation plans to move its address overseas simply to avoid paying its fair share of U.S. taxes,’” said Ranking Member Levin.

“These corporate inversions are costing the U.S. billions of dollars and undermining vital domestic interests.

“‘We can and should address this problem immediately through legislation to tighten rules to limit the ability of corporations to simply change their address and ship U.S. tax dollars overseas.’”

Among those companies that have chosen to betray their country in its time of economic need:

INVERSION YEAR COMPANY NAME TYPE COUNTRY OF INCORPORATION REVENUE
1983 McDermott International Engineering Panama $2.7 billion
1994 Helen of Troy Consumer Products Bermuda $1.3 billion (FY 2014)
1996 Triton Energy Oil and Gas Cayman Islands Acq by Hess in ’01
1996 Chicago Bridge & Iron (CBI) Engineering Netherlands $11.1 billion
1997 Tyco International Diversified Manufacturer Bermuda $10.6 billion
1997 Santa Fe International Oil and Gas Cayman Islands Acq by Transocean in ’07
1998 Fruit of the Loom Apparel Manufacturer Cayman Islands private company
1998 Gold Reserve Mining Bermuda N/A
1998 Playstar Corp. Toys Antigua Acq by Premier Mobile in ’06
1999 Transocean Offshore Drilling Cayman Islands $9.4 billion
1999 White Mountain Insurance Insurance Bermuda $2.3 billion
1999 Xoma Corp. Biotech Bermuda $35.5 million
1999 PXRE Group Insurance Bermuda Acq by Argonaut Group in ’07
1999 Trenwick Group Insurance Bermuda Acq by LaSalle Re Holdings in ’00
2000 Applied Power Engineering Bermuda Now called Actuant $494 million
2000 Everest Reinsurance Insurance Bermuda $5.6 billion
2000 Seagate Technology Data Storage Cayman Islands $14.4 billion
2000 R&B Falcon Drilling Cayman Islands Acq by Transocean in ’00
2001 Global Santa Fe Corp. Offshore Drilling Cayman Islands Acq by Transocean in ’07
2001 Foster Wheeler Engineering Bermuda $559 million
2001 Accenture Consulting Bermuda $28.6 billion (FY 2013)
2001 Global Marine Engineering Cayman Islands Acq by Bridgehouse Capital in ’04
2002 Noble Corp. Offshore Drilling Cayman Islands $4.2 billion
2002 Cooper Industries Electrical Products Bermuda Acq by Eaton in ’12
2002 Nabor Industries Oil and Gas Bermuda $1.6 billion
2002 Weatherford International Oil and Gas Bermuda $15.2 billion
2002 Ingersoll-Rand Industrial Manufacturer Bermuda $12.3 billion
2002 PricewaterhouseCoopers Consulting Consulting Bermuda N/A
2002 Herbalife International Nutrition Cayman Islands $4.8 billion (sales)
2005 Luna Gold Corp Mining Canada $85.3 million
2007 Lincoln Gold Group Mining N/A  
2007 Western Goldfields Mining N/A Acq by New Gold in ’09
2007 Star Maritime Acquisition Grp Shipping N/A Now Star Bulk $69 million
2007 Argonaut Group Insurance Bermuda $1.4 billion
2007 Fluid Media Networks Music Distribution    
2008 Tyco Electronics Industrial Manufacturer Switzerland Now TE Connectivity $3.4 billion (FY ’13)
2008 Foster Wheeler Engineering Bermuda $3.3 billion
2008 Covidien Healthcare Ireland $10.2 billion
2008 Patch International Inc Oil and Gas Canada  
2008 Arcade Acquisition Group Financial    
2008 Energy Infrastructure Acquisition Group Energy    
2008 Ascend Acquisition Group Electronics N/A Acq by Kitara Media in ’13
2008 ENSCO International Oil and Gas United Kingdom $4.9 billion
2009 Tim Hortons Inc Restaurant Chain Canada $3.2 billion
2009 Hungarian Telephone & Cable Corp. Telecommunications Denmark $219 million
2009 Alpha Security Group Security N/A  
2009 Alyst Acquisition Group Financial N/A Acq by China Networks Media in ’09
2009 2020 ChinaCap Acquirco Financial N/A Acq by Exceed Co. in ’09
2009 Ideation Acquisition Grp Private Equity N/A Acq by SearchMedia in ’09
2009 InterAmerican Acquisition Grp Business Management N/A Acq by Sing Kung Ltd in ’09
2009 Vantage Energy Services Offshore Drilling Cayman Islands $732 million
2009 Plastinum Polymer Tech Corp. Industrial Manufacturer    
2010 Valient Biovail Pharmaceuticals Canada $5.7 billion
2010 Pride International Offshore Drilling United Kindom Acq by Ensco in ’11
2010 Global Indemnity Insurance Ireland $319 billion
2011 Alkermes, Inc. Biopharmaceutical Ireland $575 million
2011 TE Connectivity Industrial Manufacturer Switzerland $13.3 billion
2011 Pentair Water Filtration Switzerland $7.5 billion
2012 Rowan Companies Oil Well Drilling United Kindom $1.5 billion
2012 AON Insurance United Kindom $11.8 billion
2012 Tronox Inc Chemical Australia $1.9 billion
2012 Jazz Pharmaceuticals / Azur Pharma Pharmaceuticals Ireland $872 million
2012 D.E. Master Blenders Coffee Netherlands $3.5 billion
2012 Stratasys Printer Manufacturer Israel $486.7 million
2012 Eaton/Cooper Power Management Ireland $22 billion
2012 Endo Health Solutions Pharmaceuticals Ireland $2.6 billion
2013 Liberty Global PLC Cable Company United Kindom $17.3 billion
2013 Actavis / Warner Chilcott Pharmaceuticals Ireland $8.7 billion
2013 Perrigo/Elan Pharmaceuticals Ireland $3.5 billion (FY 2013)
2013 Cadence Pharmaceuticals Pharmaceuticals Ireland $110 million
2014 Mallinckrodt Pharmaceuticals Pharmaceuticals Ireland $2.2 billion
2014 Chiquita Brands Produce Ireland $3 billion
2014 Medtronic Pharmaceuticals Ireland $16.5 billion

SOURCE: Source: Ways and Means Committee Democrats. GRAPHIC: Danielle Douglas – The Washington Post. Published Aug. 6, 2014.

The most popular countries for these “inversions” are:

  • The Cayman Islands
  • Bermuda
  • Canada
  • United Kingdom
  • Ireland
  • Switzerland
  • Netherlands

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