Corporate Headquarters

Huge companies and corporations have always been an object bringing either a lot of money to the investors or a lot of headache. This is the most interesting way of investing the money. Unfortunately, the profit must be shared with the government in the form of taxes. Recently, a high percentage of the U.S. corporations have moved their legal addresses abroad to undercut the taxes costs. With moving their headquarters to Bermuda, Europe or Middle East they also moved the money flow of their organisations to these territories. The main issue that raised the question in this essay is an ethical side of the companies’ responsibility. What is more profitable: paying taxes to the government or dividends to the shareholders?

High percentage of tax bills that needs to be paid within a country is mostly pushing the big companies to undercut these expenditures. They are looking for solutions to this question abroad, where the tax percentage is much lower. For example Eaton, a company with 101 year old tradition moved to Ireland in 2009 where the tax rate is 12,5 %, while the U.S. tax bill is 35%. Didn’t they make a considerable retrenchment? If a company can save up to $100 million annually it does not take long to act accordingly. Consequently, money that should have gone to a national treasury flows abroad, although the production is still established in the country. Companies cannot avoid paying certain amount of their profit to the shareholders,, so their attempts to save up are quite clear. But does the duty to pay out percentage out of profit to the investors overcome the obligations to pay taxes to the country? There is only one answer to this question – business is business. When it comes to getting more profit, CEO of the companies do not take into consideration any kind of a duty. Decisions related to money are taken with no obligations. This is when the strict rules of business apply, without any regrets or liabilities involved.

The ethical point of this topic is the idea of national trade development and investment in the U.S. treasury. Large corporations are one of the biggest investors in the country to ensure the stability of the State. When all of them move out from the U.S.A., the country will start losing huge amounts of money. This can lead to a crisis within the country which will be quite difficult to overcome. Therefore, undercutting tax bills would be a reasonable decision for the U.S. government to keep the corporations’ yield within the country.