Stanley's Steaming [IBD Editorial on Stanley Tools leaving the USA]

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 Stanley’s will vote again), but Blumenthal’s statement reveals his true aims. The suit is a warning to Stanley and all other Connecticut companies: Pay up, or we’ll make life miserable for you.

This fuss is an ugly reminder of the war on business constantly waged by government. Today, it’s Microsoft getting steamrollered because it held a hefty piece of the market. Or it’s Big Oil, which faces price controls in Hawaii - which has the highest state gasoline taxes in the nation.

Tomorrow it’s Stanley, which will be denied the basic right to leave unless it’s willing to finish a drawn-out-fight. What’s surprising is that more people haven’t fled Connecticut’s 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.

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Do you know if resident aliens are subject to US income tax if they are out of the country and earn money?

No, sorry, I don't. My wife is German and has a number like a social security number because we have a joint US mutual fund account and if I want to file as married she has to list her income, although she pays taxes on it here. I pay taxes to the UK on what I make here because I am a legal resident.But I still have to file in the US- although I don't think I would necessarily have to pay (except for those pesky mutual funds). We've been thinking about just divesting ourselves of any States' side assets simply to avoid the accounting costs. You have to renounce your citizenship before you aren't required to file a tax return. In this manner, the USA is really oppressive. I haven't used any public service in the States in over ten years but I have to put out my good money to file my return (even if I don't pay a dime in tax).

As far as the resident alien thing- it seems like if they aren't physically in the US they can't actually be resident, even if they have that legal status. I don't see how you could require it- what would be the logical basis for it? They're not a citizen and they aren't physically in the country. At any rate, what the IRS doens't know won't hurt them.

Please guys, there is another side to this. And both sides are sinister.

We have a corporate class of managers in America who see themselves as belonging to no nation at all, but rather "Citizens of the World". In general, most companies with managers of this type have no qualms about selling "dual use" technologies to Communist China that could be used very effectively against us in weaponry of the future (I don't think Stanley Works is one of them...somehow I don't see the commies taking us out with hand tools).

Everything is the bottom line to them, and mainly it's their personal bottom line. Their stock options. Their salary. Their golden parachutes. Fuck America.

I have a dream of a golden past, which probably never existed...

1) Of politicians who tread lightly on citizenry because they believed in limited government.

2) Of red-blooded American company managers who wanted the best products in the world to be made by American hands in America, and made it so.

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See, you guys don't get it. Whether we blame the politicians or the corporate bigwigs we are on a sinking ship. Everyone in power appears to be in it for themselves.

Thank God that Americans like Johnny Mike Spann still exist, or Todd Beamer. Too bad they're dead and can't lead companies or run for office...though they'd probably stay away from that cesspool anyway.

(Sigh)

More and more manufacturing businesses are becoming service industries that farm most or a large part of the high value added work overseas.

I have a neighbor who works for CooperTools [Crescent wrenches, Channel-Locks, etc.]. They are being forced to little-by-little move production overseas. They really want to stay here, but won't stay in business if they do.

I understand what you are saying, but I think the manufacturing situation in the US has become far more serious than just a matter of executive perks. It' now a matter of survival for these companies.

Just out of curiousity, have you ever read Atlas Shrugged? Short sample:

For centuries, the battle of morality was fought between those who claimed that your life belongs to God and those who claimed that it belongs to your neighbors - between those who preached that the good is self-sacrifice for the sake of ghosts in heaven and those who preached that the good is self-sacrifice for the sake of incompetents on the earth. And no one came to say that your life belongs to you and that the good is to live it.

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