And if you go out of your way to make yourself less competitive, expect to lose.
If that sounds like simple common sense, that's because it is.
But it's also exactly what the US has been doing for years?enacting tax policies that sabotage its global economic competitiveness.
It's like trying to get in shape for a marathon by going on an all-McDonald's diet. (Speaking of McDonalds, check out this funny video spoof of what their commercials should really look like.)
Here are two major reasons why the US is lagging in the global economic marathon:
The US has the highest effective corporate income tax rate in the developed world (see chart below).
Unlike most other countries, which only tax domestic profits, the US taxes the earnings of foreign subsidiaries of US companies when the money is transferred back to the US. This has had the effect of US corporations keeping over $1.9 trillion in retained earnings offshore to avoid the crippling US corporate income tax.
These "worst in the developed world" tax policies are clearly hurting the global competitiveness of American companies.
Being deemed a "US Person" for tax purposes is like trying to swim with a lifejacket made of lead.
It should come as no surprise that an increasing number of productive people and companies are seeking to shed this burden so they can keep their heads above water.
At this point, it's more than just a trickle?it's an established trend in motion.
And I don't see anything that would reverse it. On the contrary, given the political dynamics?ramped-up spending on welfare and warfare policies, as well as an "eat the rich" mood?taxes have nowhere to go but north. And that means the exodus will continue.