It's been incredible watching your ignorance in this thread but I feel bad for you now so I'm going to explain the error in your position because you genuinely seem upset others don't "get" the point you think you're making. In the hope that you are actually opening to understanding why you're being dismissed, let me walk you through the mechanics of what you're missing. Permit me some liberty to oversimplify a bit but I'm dealing with a word limit.
Think about a big giant American company. We'll pick Johnson & Johnson. It's located in New Brunswick, New Jersey. You can see its huge headquarters on the side of the road as you drive up Route 1.
This big, giant, American business with its name on the side of a bunch of big, giant buildings has 126,500 employees. It generates $71+ billion in sales. It sells everything from baby powder to mouth wash, prescription drugs to heart stints. Right?
That's what you see when you think of Johnson & Johnson, correct?
That isn't Johnson & Johnson.
Johnson & Johnson - the thing that is traded on the New York Stock Exchange and files reports with the Securities and Exchange Commission - is a holding company. It doesn't actually do anything in terms of manufacturing or selling. It is a legal shell that owns stock in other, stand-alone businesses. Those other stand-alone businesses actually do stuff. Each of those companies has its own Board of Directors, it's own CEO, it's own regulators, it's own everything. They are separate, legally distinct, absolutely independent businesses. The numbers you see for Johnson & Johnson are the tallied up totals for all of those other businesses using a special set of accounting rules known as GAAP that dictate how to handle equity stakes in other enterprises.
What stocks are held in the Johnson & Johnson vault? Here is the complete list of controlled subsidiaries in Adobe PDF.
Let's pick a company. How about McNeil AB?
McNeil AB is a Swedish manufacturer of pharmaceuticals. It operates in Sweden. It sells in Sweden. It is run by Swedish employees. The only tie it has to the United States is that the stock certificates show that a company called Johnson & Johnson owns the shares. McNeil AB operates like any other Swedish company, and when its profit is calculated at the end of the year, it pays the Swedish government the taxes it is owed on its earnings.
When Johnson & Johnson files its annual report, because it owns so much of McNeil AB's stock, it has to consolidate those profits on its own income statement. It will show that it had $x in sales and $x in profit, even if McNeil AB never paid a single penny of that out as a dividend and the American business never saw any of the cash because, economically, they own it.
Unlike every other advanced country in the world, the United States tells Johnson & Johnson, "Even though McNeil AB is a Swedish company, located in Sweden, selling to Swedish citizens, staffed with Swedish workers, and paying taxes to the Swedish government because it uses their military, infrastructure, and resources, we want part of that money. If you attempt to bring any of it back to the United States, and you paid a lower tax rate than we would have charged you, you have to give us the differential."
So, of course, Johnson & Johnson never brings any of that money back to the United States. Even though, as the stockholder that controls McNeil AB, it could call a shareholder meeting and vote to pay out a dividend, its share of McNeil's profits are just recorded on Johnson & Johnson's financial statements even though it never actually touches any of that money.
Now, the Obama administration is proposing a tax of up to 19% on all past retained profits Johnson & Johnson holds in McNeil AB.
What everyone is saying is, Johnson & Johnson will simply jettison McNeil AB. It has no ties to the United States except a piece of paper. It's all overseas. It will setup a business in London called something like "Johnson & Johnson, PLC" and issue shares on the London stock exchange. It will then transfer its shares of McNeil AB to Johnson & Johnson, PLC. Then, it will spin-off shares of Johnson & Johnson, PLC to the stockholders of the existing American based Johnson & Johnson, Inc.
Now, the American based Johnson & Johnson has no ties to McNeil AB, can't claim any of those taxes for itself, and has lost economic influence it could have wielded through the business sector, which is one of the ways we've exercised tremendous global power over the past 100+ years.
You're thinking of things like Starbucks creating an accounting trick to show it didn't make any money in the United Kingdom when, in fact, it did. They are not the same thing. The unintended consequences of trying to go after that problem, in this way, will result in all non-American based assets being wrapped up and siphoned off in stand-alone businesses that trade on the Toronto or London Stock Exchanges (those two would fare best for various reasons were such a mass exodus to happen).
More than half of the profits our corporate giants generate now come from outside of the United States. This is not your grandfather's economy. You think they can't just pick up and move, the point is they don't have to pick up and move, they are already located overseas. We're talking about physical plants that are overseas. We're talking about employees who are overseas. None of it is here except the stock certificate. It's a piece of paper. That paper can change very rapidly.