Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.
"Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate," Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. "As a result, the redomestication will improve our ability to maintain a competitive worldwide effective corporate tax rate."
Dear Mr. President,
This phenomenon is called "safe-haven capital flight" and is a perfectly predictable and utterly rational corporate response to increased taxes on capital. Please note that tax-exporting capital flight can and does occur not just on the imposition of new taxes, but on the future expectations of same.
I would beg to note that capital flight also involves human capital.
It's not too late to stop or reverse the trend. But it's getting there.
Sincerely,
A Recovering Economist
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