Skip to comments.Stanley's Steaming [IBD Editorial on Stanley Tools leaving the USA]
Posted on 05/14/2002 4:11:07 PM PDT by snopercod
Revenue: Weary of high taxes, a famous old-line company wants to leave the U.S. Public officials reaction reveals an all-too-common mind-set in the halls of power.
Stanley Works, the New Britain, Conn., toolmaker, announced in February that it had plans to reincorporate offshore. The move would save the company $30 million a year in taxes. Last week, shareholders approved a paperwork relocation to business-friendly Bermuda.
The possibility has energized the political class. They see a cash cow about to jump the fence.
"Stanley Works has no right to abandon their obligations as a corporate citizen of this country," mumbled Rep. James Maloney, D-Conn. Abandon their obligations? What, to be taxed at punitive rates so that Maloney and his colleagues can hand out costly favors to their voters?
Particularly irksome is the scolding by Rep. Richard Neal, D-Mass, who blustered that "during this time of war" Stanley has "chosen profit over patriotism and turned their back on the United States."
Elected officials are, sadly, the blindest among us. Are the companies that seek greater economic freedom turning their backs on the U.S.? Or is the lawmakers, who demand hefty tribute for the right to do business in an ostensibly free country? There is something grossly unpatriotic about holding a private company hostage to the insatiable appetite of the state.
Conneticut Attorney General Richard Blumenthal revealed that he holds a similarly distorted notion of patriotism when he declared that Congress "should close the federal tax loophole that is motivating Stanley Works to abandon America and Connecticut."
Particularly galling is that to these politicians the company is to blame, not the high taxes imposed by those selfsame politicians.
Note that Blumenthal talks of abandonment, as did Maloney. The dangerous assumption is that Stanley owes society. Yet last time we checked, the consent of the governed was still required here.
While Congress considers legislation that would stop companies from moving overseas, Blumenthal is using his office to do something about it. He filed suit last week against Stanley, alleging that the information given to shareholders concerning the vote intentionally confused them.
We believe in informed shareholders (and Stanleys will vote again), but Blumenthals statement reveals his true aims. The suit is a warning to Stanley and all other Connecticut companies: Pay up, or well make life miserable for you.
This fuss is an ugly reminder of the war on business constantly waged by government. Today, its Microsoft getting steamrollered because it held a hefty piece of the market. Or its Big Oil, which faces price controls in Hawaii - which has the highest state gasoline taxes in the nation.
Tomorrow its Stanley, which will be denied the basic right to leave unless its willing to finish a drawn-out-fight. Whats surprising is that more people havent fled Connecticuts tax burden, Indeed, the Tax Foundation points out that May 14 is Tax Freedom Day for NutmegStaters - the latest in the nation. Those "lucky" citizens now can start working for themselves, not government.
Its their politicians whove abandoned them - and freedom.
I beg to differ. Forcing companies to serve the government was considered very patriotic in Hiter's Germany, Mussolini's Italy, Mao's China, and Kruschev's Soviet Union.
LOL! Straight out of "Atlas Shrugged".
Politicians are real evil dudes...and stoopid.
Connecticut is #1 in taxes, but the People's Republic of Washington is #2, and we are going to be #1 soon. Despite losing Boeing to Chicago, the demise of the dotcom's and having the worst unemployment in the USA; Washington has plans for additional gas taxes (10 cents a gallon increase), additional transportation taxes, and increasing taxes on electricity, natural gas, and property. Woo-hoo, we are going to drive every company out of Washington; then are going to cry about how unfair it is for these companies to leave. Personally, I'm hoping to relocate this summer. Please God, get me back to Texas and sanity.
Watch, you'll end up in Austin. LOL
What is particularly ironic is that the State of Connecticut would have fallen all over itself in an attempt to lavish the company with tax breaks and special exemptions if Stanley had threatened to move to Alabama instead of Bermuda.
I certainly don't know all the ins and outs of this business, but it occurred to me several years ago that Bill Gates might decide to relocate offshore. Don't think that it would be a big problem with the technology that we have nowadays. Want software? Just download it off the internet for a price.
Stanley rep: "Do we, the management and stockholders, have the freedom to persue our interests as we deem fit?"
Corporate income taxes? Annual corporation fees? Anybody?
The question must be asked, do people and companies belong to the government of the United States? Do we exist for their benefit That is what the politicians seem to think.
A tool maker is dependent on heavy capital investment and this is just the type of business that can't stay in business very long in the once great USA. The only way a manufacturing business can profit is from taking government contracts or corporate welfare. More and more manufacturing businesses are becoming service industries that farm most or a large part of the high value added work overseas. The liberals have destroyed the major economic engine of the US with taxes and the lower middle class and poor are the ones that really get the shaft. America can't compete.