Stanley Tools puts the screws to American workers
Stanley Tools puts the screws to American workers
Date: Sunday, May 12, 2002 4:31 PM
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Another American icon has just decided that US workers are too expensive
you know, the guys that make those BIG SCREWDRIVERS!
Vermont's Bernie Sanders is trying to fight the sucking sound, but as
you
will see in my next newsletter, the tornado might just sweep him away.
Here
are 3 articles, the last being my favorite because I like his style.
http://bernie.house.gov/documents/articles/20020318173422.asp
Published on 3/13/2002 in the AP Online
US Scrutinizes Bermuda Tax Shelters
by Curt Anderson
Well-known U.S. companies like Stanley tools and Ingersoll-Rand are
sharply
lowering their tax burdens by setting up shop in Bermuda. Congress and
the
Bush administration are raising questions.
Creating a shell corporate entity in Bermuda, which imposes no direct
taxation, is legal but could be costing the U.S. treasury tens of
millions
of dollars, critics say. Several members of Congress have introduced
legislation to prevent U.S. corporations from using the essentially
paper
transaction to escape taxation.
"It's simply outrageous that there's this corporate rush to put up a
shingle
in Bermuda and still put a USA stamp on their products," said Rep.
Richard
Neal, D-Mass.
The Treasury Department is rushing to complete a study of the issue that
will focus in part on whether U.S. corporate tax laws are driving
companies
to take drastic steps to stay competitive. Treasury Secretary Paul
O'Neill
is an ardent critic of the tax system, which is under attack from
pro-business groups because it taxes U.S. companies for income earned
worldwide unlike European countries.
"When major companies are moving their operations overseas, it's our
responsibility to take a look at it," said Mark Weinberger, assistant
treasury secretary for tax policy. "In relatively short order, we're
going
to be able to come back and see if there are any flaws in the law."
The Stanley Works, a toolmaker based for decades in New Britain, Conn.,
hopes to complete its new Bermuda incorporation by mid-2002. Under such
a
"corporate inversion," as the deals are known, stock for the U.S.
company
will be exchanged for shares in the new one.
Aside from this transaction, the new Stanley Works Ltd. in Bermuda won't
be
doing any actual work.
"While we will be incorporated in Bermuda, at this point, there are no
plans
to move any business operations there," says a Q&A about the move on
Stanley's Internet site.
The move will lower Stanley's effective tax rate from 32 percent to as
low
as 23 percent, saving about $30 million a year in U.S. taxes, according
to a
company statement. While Stanley will continue to pay about $80 million
a
year to the federal government from its U.S. operations, the statement
makes
clear that tax savings is a chief reason for the move to Bermuda.
"Today, the company pays an excessive amount of tax relative to our
foreign
competitors," the statement says. "If the company is not competitive,
there
are no taxes and no jobs."
Tyco International Ltd. and Ingersoll-Rand Co., both diversified
industrial
companies, are other high-profile names that now call Bermuda home. Paul
Dickard, an Ingersoll-Rand spokesman, said lowering the U.S. tax burden
will
"facilitate the movement of our global capital."
"The international provisions of the U.S. tax laws put U.S. corporations
at
a disadvantage," he said. "We believe it's a sound business decision."
At Tyco, executive vice president Brad McGee said the company's Bermuda
address was the result of a 1997 merger with ADT Ltd., a British firm
based
there, and not a paper transaction aimed at reducing taxes.
"We're not a U.S. company," he said. "It is not a shingle."
On Capitol Hill, the Bermuda trend is gaining notice just as the demise
of
Enron Corp. has focused attention on corporate ethics and use of
offshore
tax shelters. Also incorporated in Bermuda is Global Crossing, the fiber
optic builder that has also filed for bankruptcy amid questions about
its
accounting practices, as well as the Accenture consulting firm that was
spun
off from the Arthur Andersen accounting company - which advised Enron.
Neal, a member of the tax-writing House Ways and Means Committee, has
introduced a bill with 25 co-sponsors, including two Republicans, that
would
require companies to continue paying U.S. taxes if they reincorporate in
a
foreign country and its stock remains substantially in the hands of its
former shareholders. A similar approach is being pushed by Rep. Scott
McInnis, R-Colo., also a member of the Ways and Means panel.
"This bill sends a strong message to U.S. corporations that their
actions
will no longer be tolerated," McInnis said.
Senior members of the Senate Finance Committee are also working on
legislating addressing the Bermuda exodus. Sen. Charles Grassley of
Iowa,
the panel's ranking Republican, said he intends to introduce a
bipartisan
bill "to make it very difficult to do that and to discourage it."
Critics of this approach say the politicians are attempting to preserve
an
outmoded, anticompetitive U.S. tax system that should be fundamentally
changed. Veronique de Rugy of the Cato Institute, a libertarian think
tank,
said the United States should move toward a territorial tax system to
stem
the tide of Bermuda relocations.
"The correct response is to fix the internal revenue code," she said.
http://www.orlandosentinel.com/business/nationworld/orl-bizstanley10051002ma
y10.story?coll=orl-business-headlines
Stanley Works OKs Bermuda tax move
By Masha Herbst
Associated Press
May 10, 2002
NEW BRITAIN, Conn. -- Share- holders at Stanley Works, a century-old
Connecticut institution known for its black-and-yellow woodworking
tools,
voted Thursday to reincorporate in Bermuda to reduce its tax burden.
But the change -- which Stanley spokesman Gerard Gould said would take
effect at the end of business today -- may face challenges in court and
in
Congress. U.S. Rep. James Maloney compared the vote to the actions of
Connecticut-born traitor Benedict Arnold.
The change won't affect employment, the company said, but would reduce
Stanley's tax rate to 24 percent from a current 32 percent. Gould said
Stanley would save $30 million in annual taxes.
Stanley said 67.2 percent of all shares favored the change, slightly
more
than the two-thirds majority needed. Some 12 million shares were not
voted;
about 1 million shares formally abstained.
Maloney, D-Conn., is a sponsor of legislation that would curtail the use
of
offshore tax havens. He said Stanley was betraying Connecticut and the
United States.
"Connecticut hasn't seen such a shameful day since Benedict Arnold
sailed
away," Maloney said, referring to the American Revolution general who
conspired with the British to betray the colonial stronghold at West
Point,
N.Y., and later fled to England.
Maloney said he was not surprised that the Stanley plan passed.
"The large, institutional shareholders see that they might get a
financial
advantage over the course of the next 20, 30 or 40 years," Maloney said.
"This hurts the small shareholders, but of course they hold small
numbers of
shares."
The state of Connecticut owns 16,600 shares of Stanley Works in its
retirement and trust funds.
State Treasurer Denise Nappier said she was concerned that unlike
Connecticut law, Bermuda does not require shareholder approval for a
corporation to sell its assets.
Stanley has said it would not sell its assets without a vote, Nappier
said.
"I would observe that it was similarly inconceivable, a few short months
ago, that a company that prided itself on its Main Street image in
Connecticut's Hardware City would propose reincorporating a foreign
land,"
she said.
About 30 protesters marched outside the shareholder meeting, holding
banners
that said "Bless the U.S.A." and handing out American flags.
Copyright © 2002, Orlando Sentinel
http://www.americanpolitics.com/20020225Zepp.html
Why don't they...
... end the corporate shakedown of America?
Bermuda Shorts as Stanley Chisels
by Bryan Zepp Jamieson
Feb. 25, 2002 -- Mt. Shasta (APJP) -- While the government has been
distracting the masses with frenzied flag-waving and cries of "praise
the
lord!" the shafting of America has been continuing apace.
The NY Times, still in the process of rediscovering itself and finding
that
it's not supposed to act as a cheerleader for the administration, ran an
article this past Monday (2/18/02) that related that the latest hot
"megatrend" among the big corporations is to file papers of
incorporation in
Bermuda and other overseas havens, and save a fortune in taxes. Among
other
examples cited in the piece (written by David Cay Johnson) are the
following:
Stanley Works Saves $30 million a year in taxes
Ingersoll-Rand Saves $40 million a year in taxes (estimated)
Tyco Saves $400 million a year in taxes
And it costs $1,000 to file the papers, and you have to pay an annual
fee of
$750. Pretty good racket. Bermuda, which is inconvenienced to the amount
of
space needed to put a mail box, gets some income, while America, which
has
to deal with the emissions and pollutants, the demands for a docile
labor
force and security to keep them that way, gets shafted.
It's not enough that these cheap, greedy bastards get a far more
profitable
ride then they would get if they moved their factory anywhere else;
they've
decided that they are going to stiff America for the relative pittance
expected from them.
Johnson went to Mark A. Weinberger, who is chief of tax policy in the
Treasury Department, and asked him what his take on it was. He replied,
"We
may need to rethink some of our international tax rules that were
written 30
years ago when our economy was very different and that now may be
impeding
the ability of U.S. companies to compete internationally."
Don't look surprised. Weinberger is a lackey in a whore administration
that
owes its very existence to a putsch staged against the United States by
the
corporations. It would be cruel to think that poor little lickspittle
could
do anything other than parrot the party line. Of course he's going to
insist
that corporations shouldn't have to pay taxes. As Leona Helmsley said,
"Taxes are for the little people." The role of Americans, in the eyes of
this administration, is to faithfully serve the corporations in any way
possible, and make sure that their existence is as easy as can be. Just
because we support them doesn't mean they should do anything for us!
Of course, it's a little hard to "compete internationally" when the
"competition" is offshore tax havens who get several tens of thousands
of
dollars for nothing more than some paperwork saying that such-and-such a
corporation is officially headquartered there.
Bermuda isn't alone in this racket, and companies have been doing this
since
the Reagan era. They set up their factories and offices in America, grow
here, nurtured by America, protected and assisted. They depend on
America's
stable currency and stable culture, and a government willing to protect
their interests and enact laws that keep the workforce as powerless as
possible. In most cases, they get wealthy selling their goods and
services
primarily to Americans. American education provides them with a good
work
force, and American highways and roads make commerce easy and
inexpensive.
They can even thank the clean air and clean water laws, in the case of
heavy
industry, for forcing them to become more efficient than they might
otherwise have been, because it's a fact that clean industry is
efficient
industry. (Industry likes to whine about pollution controls, but a 1997
joint DoE/industry study revealed that since its implementation, the
Clean
Air/Clean Water Act had SAVED industry some $5 trillion, directly in
greater
efficiency, and indirectly in less employee absence due to illness and
injury, right down to how being "green" was a great marketing point.)
Companies in America already get incredible breaks. Enron paid no taxes
at
all in four of the five most criminal years of its benighted existence,
and
the Putsch "stimulus package" proposed to dump a cool quarter billion in
tax
"rebates" into their hot little hands. Just a little reward from a
grateful
President for taking the time and trouble to shaft the American people,
is
all. What's a quarter billion among oil buddies, especially when it's
our
money to begin with?
That's not enough for these over-privileged and pampered thieves,
though.
Not content with the greatest profits in history, they want a free ride,
as
well.
It's time this stopped, and I think I know just the way to do it.
The dirty little secret that corporations don't like to talk about is
the
plain and simple fact that for all their assurances that only they can
provide jobs and goods, they need the people of the United States far
more
than the people of the United States need them.
Obviously, they need customers. If people don't buy their crap, all the
tax
breaks and politician-buying in the world won't help them. Start
watching
for lists of outfits that have set up mailboxes in places like Bermuda
and
the Cayman Islands for the express purpose of gouging the American
people.
They also need the protection of our laws. The Supreme Court, in a truly
idiotic decision back in the 1920s, said that for legal purposes,
corporations were human beings and thus subject to the same
constitutional
guarantees as actual carbon-based life forms. As far as the American
public
was concerned, the fairness of the decision was about as fair as putting
a
rabbit in a cage with a Bengal tiger, and in order to ensure a fair
fight,
mandating that both were limited to using only their teeth and claws.
It wouldn't require a constitutional amendment to change that; just an
act
of Congress. And if we have fair and honest elections this fall, we
might
get the House back. Just simply pass a law stating that any foreign
based
corporation doing business here who isn't actually importing to America
may
not avail itself of our civil courts. If Stanley Tools wants legal
redress,
they'll have to go through the Bermuda courts.
Further, delete the liability limitations for the executives of such
companies. The board of directors of Tyco want our good roads and
schools
and clean air, but they don't want to pay for it. Fine. Since Tyco
couldn't
be sued in civil court under my plan, the individuals on the board of
directors would be, and have to appear as individuals and not under the
cloak of LLC laws.
As mentioned, I would exempt companies that actually do something
overseas
besides evade taxes. Actual foreign companies that import goods, and
American companies with legitimate, compelling reasons to be overseas,
such
as oil companies.
But companies using mailboxes to evade taxes would not be entitled to
the
protections and services that they refuse to pay for. Good luck
collecting
on those bounced checks in the Cayman Island courts, guys!
Of course, the custard-heads on the right will say that such a law,
forcing
companies to pay for the society that supports them, will force many to
actually leave the country and set up shop elsewhere.
The ones that were going to already have. Nike needs sweatshops so they
can
make a profit on their overpriced sneakers, pay for those lush ads, and
keep
the stockholders happy at the same time. Eventually, they'll implode in
their own way.
But big corporations are greedy, self-absorbed, unpatriotic bastards,
and
the ones threatening to leave basically know they can't because they
would
lose all the privileges of living here that they don't want to pay for.
So
they resort to bluster and empty threats, and hope, once again, that
they
can cow Congress into extending their free ride.
But they are bleeding the country dry. They are the reason we are
supposedly
the richest country on earth, but have inadequate health care for 15% of
our
population, hunger among our school kids, under-staffed and under-funded
schools, decaying infrastructure, declining public transportation, and a
horrendous national diet.
Give them a choice. Either they can pay their way like everyone else, or
they can get the hell out for real. But one thing is certain: America
cannot
afford to continue to be sucked dry by these vicious parasites.
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