Welcome to the new Houston, TX ... Zug, Switzerland
Where does U.S. oil money go when Obama promises to punish the oil companies for excess profits? Reuters’ Sam Cage knows:
for an oil boom.
Yet a wave of energy companies has in the last few months announced plans to
move to Switzerland -- mainly for its appeal as a low-tax corporate domicile
that looks relatively likely to stay out of reach of Barack Obama's
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.
Swiss cantons are free to set their own tax rates. For example in Zug,
corporate tax is about 16 percent but can fall as low as 9.5 percent for
companies that do most of their business outside Switzerland. That compares
with an average global corporate tax rate of 25.9 percent
Companies say Switzerland's attractiveness as a corporate location goes
beyond tax to include easy and efficient transport, a high quality of life
high and well-trained staff."
How long will it be before oil field equipment provider, the much maligned
Halliburton, figures this out?
Can Exxon/Mobil be far behind?
This is why Obama's tax increases on “big businesses” and the "rich" will not work.
The big and the rich can afford to move out of the country. The rest of us ... hope for a little change.
There are historical parallels here. As Thomas Lifson wrote over 3 years ago in American Thinker:
Many years ago, an oilman in Houston pointed out to me that there was no inherent reason Houston should have emerged as the world capital of the petroleum business. New Orleans was already a major city with centuries of history, proximity to oil deposits, and huge transportation advantages when the Houston Ship Channel was dredged, making the then -- small city of Houston into a major port. The discovery of the Humble oil field certainly helped Houston rise as an oil center, but the industry could just as easily have centered itself in New Orleans.
When I pressed my oilman informant for the reason Houston prevailed, he gave me a look of pity for my naïveté, and said, 'Corruption.' Anyone making a fortune in New Orleans based on access to any kind of public resources would find himself coping with all sorts of hands extended for palm greasing. Permits, taxes, fees, and outright bribes would be a never-ending nightmare. Houston, in contrast, was interested in growth, jobs, prosperity, and extending a welcoming hand to newcomers. New Orleans might be a great place to spend a pleasant weekend, but Houston is the place to build a business.
For the present day oil industry, the Obama administration, with the federal equivalent of permits, taxes, fees, and outright bribes could also be a never-ending nightmare.
Goodbye Houston. Hello Zug.