Businesses moving outside U.S. over tax issues
When it comes to the big business, one of the dirty little secrets is that the United States still isn’t a place that is tax-friendly in terms of rates. Despite the increased attention by the media and politicians, companies are still moving oversees more all the time and the size and market of the companies doesn’t seem to matter when it comes to picking up and moving across the pond.
Perhaps even more distressing for people in the U.S. is that there are people who are leaving the country because they are facing tax issues--people who aren’t even tied to massive corporations but are nonetheless attempting to avoid millions of dollars in fees.
Record numbers of expatriates
Watching companies pack up and head across the pond really isn’t anything new. What is becoming a growing trend is for people no one would expect to pick and move, picking up and moving. The Wall Street Journal is reporting that this year is seeing numbers the US hasn’t seen before now.
The people are coming from all over the continental United States and those people are all ranges of age. Most of the people who are leaving the country these days have some rather deep roots in the United States, but that isn’t stopping them from departing. The report says that just over 1,000 people have renounced their citizenship through the first three months of 2014. If that pace continues, it would top 2013’s total of 2,999 renunciations. That nearly 3,000 people who decided they no longer wanted to be recognized as Americans was the most since the Government started disclosing that kind of data.
Not all the departures are spur of the moment. Experts in the industry say that the spark that started this massive exodus is a crackdown by the country on undeclared accounts that are being held by American citizens abroad. Since 2009, the IRS has collected more than $6 billion in taxes. The government has also filed more than 100 criminal indictments and the crackdown has affected 43,000 people.
With those numbers, it’s not surprising people are starting to decide the grass is greener in Europe and other parts across the oceans.
Big business making big moves
The growing number of individuals moving overseas is still eclipsed by the number of big and small businesses setting down roots anywhere but the United States. These companies are moving for roughly the same reasons with a little tweak here and there.
The biggest difference is the sheer dollar number that companies are saving by claiming they are doing business out of other countries. While we’ve all heard of tax havens like Costa Rica for these companies, other countries are starting to step up as places companies are suddenly claiming they have their HQs just so they can qualify for lower tax brackets. The most surprising country on the list of more lucrative companies is the Czech Republic.
One other factor behind these companies making the move across the pond is how much easier it is to pack up operations and head into the wild blue yonder these days. Technology allows a company to have a headquarters outside the US and still do plenty of business inside America whenever it wants. Even a small company equipped with international moving resources and a good relocation checklist can make a big move that is more financially lucrative.
Until the United States is going to change the way they tax a company, the trend of moving outside the country doesn’t appear to be one that is going to be slowing down. The only other alternative is to change the ways the government deals with these firms. There have been suggestions that the country exercise even stricter fines on firms that do this kind of business practice. Of course, taking even more money from these companies might make even more businesses pack up and leave quicker.