Friday, January 28, 2011

A Real-Life Example of U.S. Tax Policy Driving Jobs Offshore

An executive in the health care industry sends in the following.  First, there is this article on how Swiss medical technology is "gobbling" up world market share

Swiss medtech (is) one of the fastest growing industrial sectors in the country, with an average growth rate of 6%–8% per year for each of the past 15 years. From 2006 and 2008, for example, it grew between 25% and 30%.

Now the executive commentary:

The artical absolutely minimizes the real reason why Swiss Medtech is growing - it is a tax shelter for US medical companies.  Major medical companies in the U.S. put up useless boards with useless people in Switzerland, with useless "decision-making" in order to meet the requirements for Swiss MedTech and answer US IRS rules sufficiently.

From Chinese parts manufactured and shipped back to the states to now setting up 20 and 30-senior level "leaders" in Switzerland to appear to make decisions for a US company, all for the savings of US taxes.

Just another rant on how our US tax system is inefficient, does not create value-added jobs, and ultimately wastes money.

1 comment:

The Arthurian said...

Hey DM,
If Swiss medtech has been growing at 25-30%, and the real reason for it is the US tax system, then I'd say the tax code is remarkably efficient.

Too bad.