As regular readers know, I've, written numerous times about corporate tax dodgers who take their business profits to offshore tax havens. Almost all of these companies have no stores or manufacturing centers in the country where they relocate.
Wal-Mart, for example, has no stores in Luxembourg but it somehow made $1.3 billion in profits there in 2013. For their part, Caterpillar has no factories in Switzerland but has parked more than 85 percent of their profits in the tiny nation to avoid $2.4 billion in taxes here in the U.S.
Productivity or job creation is not the goal of relocating. The goal is simply to hide or shield profits made in the U.S. from the tax man (it's referred to as "tax inversion").
In effect, what we have are companies that benefited from the tax subsidies, legal protections, and opportunities that exist in the United States as they built their businesses up, but who don't want to pay it forward for the next guy. They prefer to put the tax burden of maintaining the nation on people like you and me, while complaining that we need to do something about our national debt.
It's akin to the college roommate who eats, drinks and has a great time with you at the bar, but then ducks out before the bill comes.
These corporations, for lack of a better term, are tax runaways. Bloomberg Business has a nice, and short, overview of America's "tax runaways" here. They point out that these "U.S. companies are effectively renouncing their U.S. citizenship by adopting a legal address abroad."
As we continue to fight over budgets and how to pay our national debt we need to have a conversation about corporate tax dodgers. Here's one way to get the conversation started. Last year Senate Democrats introduced legislation that would prohibit U.S. corporations who relocate abroad from securing U.S. government contracts.
Here's the primary problem with the legislation. Republicans don't support it and, if this case is an indication of what's to come, the Obama Administration might not enforce it.