- 2 reads
Sustainability sometimes starts with simply sustaining tax revenue in order to have the resources to thrive. At the Democratic Presidential Town Hall that aired on CNN Wednesday night February 3, 2016, Secretary Hillary Clinton weighed in on how to manage the influence of Wall Street. She said to moderator Anderson Cooper, “I’m not just going after Wall Street though. I think that’s too narrow a target. I think we need to go after a company like Johnson Controls that is trying to avoid paying taxes after all of us bailed it out by pretending to sell itself in a so called inversion in Europe. It’s a perversion. It should be stopped.”
According to the Johnson Controls website (http://www.johnsoncontrols.com) the company is a global technology and industrial leader serving customers in more than 150 countries. Since their invention of the first electric room thermostat in 1885, they have been committed to delivering innovative products that help the world run smoothly, smartly, simply and safely. Their global employees specialize in the following areas:
Building efficiency — with products, services and solutions to increase energy efficiency and lower operating costs for buildings worldwide.
Batteries and energy storage — including advanced batteries for hybrid and electric vehicles, as well as stationary energy storage.
Automotive seats that deliver superior quality and performance
The Wall Street Journal covered the inversion story in its January 25, 2016 article entitled: Johnson Controls, Tyco to Merge in Inversion Deal - Merger will place combined companies’ headquarters in Ireland, Tyco’s home Source: (http://www.wsj.com/articles/johnson-controls-tyco-to-merge-in-inversion-deal-1453724828). WSJ reporters Bob Tita and Dana Mattioli wrote, Johnson Controls Inc. and Tyco International PLC agreed to merge in a $14 billion deal that creates a new giant provider of commercial-building systems and reflects a growing push by some executives and shareholders toward companies that are bigger but more focused.”
According to the Journal Sentinel (Source: http://www.jsonline.com/business/after-getting-taxpayers-help-johnson-controls-packs-its-bags-b99660610z1-367111901.html) “Johnson Controls Inc. was as patriotic as they come back in 2008, when the U.S. auto industry was teetering on bankruptcy and the Glendale-based maker of car parts knew it desperately needed help from U.S. taxpayers.
The company's president at the time, Keith Wandell, didn't hesitate to ask Congress to support the massive government bailout that ultimately rescued two major U.S. automakers, along with uncounted businesses that provide parts and services to them.
‘It saved a whole lot of suppliers that would have gone out of business,' said Steve Roell, then Johnson Controls' chief executive.
And the auto bailout wasn't the only government handout to benefit Johnson Controls in the past decade. In 2010, for example, it received $299 million from the Energy Department to ramp up production of hybrid batteries. The state of Michigan awarded it millions of dollars for the same project.
Yet few seem to see any reciprocal loyalty to the U.S. in the company's latest move: a multibillion-dollar merger with Tyco International that will transfer Johnson Controls' corporate headquarters to Ireland — saving it an estimated $150 million on U.S. taxes, an action known as a tax inversion.”
How do the other Presidential candidates weigh in from the Republican field?
At the corporate level, we asked a CEO of another energy-efficiency company about reducing tax burdens by moving overseas. Charlie Szoradi, the CEO of Independence LED Lighting (http://independenceled.com) said, “We took the opposite approach and moved our LED manufacturing from China to Pennsylvania back in 2010. We’ve doubled our revenue over each of the past three years without any funding from the US Department of Energy, and we’ve paid back our SBA guaranteed loan ahead of schedule. While moving the company overseas would reduce our tax liability and increase net profits, we have no plans to structure a corporate ‘inversion.’ We’re staying right here in America.”
Is this a trigger for legislative change?
Andrew Ross Sorkin from The New York Times wrote, “Until Washington lawmakers reform the tax code, we will continue to see an exodus of American companies from our shores in search of a lower tax rate. By my count, based on a series of conversations with investment bankers, there are probably at least another dozen deals of meaningful size being negotiated in the pipeline. The question is what it will take for Congress to not only take notice, but to pass legislation to thwart this steady corporate migration.” (Source: Source: http://www.nytimes.com/2016/01/26/business/dealbook/a-tidal-wave-of-corporate-migrants-seeking-tax-shelter.html)
