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July 21, 2008
America is On Sale
There is a crisis that no one is talking about. It’s not the energy
dependence crisis, the spending crisis in our federal government, the
imaginary-though-fragile economic crisis nor the mainstream media’s
America is being sold off to foreigners at a discount. That’s a crisis.
The latest incident of this dismantling of America was the hostile
takeover of Anheuser-Busch (AB) by the Belgium beer company InBev. Most
corporate merger observers saw this as just another premium payday for
the stockholders of AB. But my memory of what used to be The Pillsbury
Company caused me to see this transaction differently.
The Pillsbury Doughboy logo is still a marketing icon, but The Pillsbury
Company as a public company is non-existent. Gone!
Although I know there is no difference in the actual product, my
preferred brand of gasoline used to be Amoco. That same gas station is
now a BP Amoco station as in British Petroleum. It will soon be just BP.
The foreign buyers of American companies try to mask their intentions
with good press releases and renaming concoctions for public relations
purposes. But the American public has a notoriously short memory about
most things, unless the mainstream media is reminding them of it
The Belgium company has announced that the renamed company will be
Anheuser-Busch InBev. My wild prediction is that over time the people
who prefer Budweiser will be buying their beer from InBev-AB, and the
famous Clydesdale horses will be used for pony rides.
The leading cause of this foreign invasion of U.S. companies is the
differential between the U.S. corporate tax rate and the prevailing
corporate tax rate for the invading foreign company. The U.S. corporate
tax rate is 40 percent versus a 34 percent rate in Belgium, whereas 12
years ago Belgium was also at 40 percent
fact, according to the Cato Institute, the United States is the only
major developed country out of 30 countries to have not lowered
its corporate tax rate in the last 12 years.
The financial attractiveness of U.S. companies is enhanced by our weak
dollar, our increasing national debt and the unlikely prospect that a
Democratic-controlled Congress will even consider lowering the corporate
tax rate, since they have indicated they will raise taxes by doing
absolutely nothing to stop the Bush tax cuts from expiring.
Many foreign buyouts of U.S. companies go virtually unnoticed, because
they may not have a $52 billion price tag like the Anheuser-Busch
acquisition by InBev. On July 16, 2008, the Associated Press published a
story titled “SK Telecom is Reportedly Pursuing Sprint Nextel.”
Telecom is South Korea’s largest mobile-phone service, with a corporate
tax rate in South Korea of 27.5 percent. Coincidence? I don’t think so.
The ideal solution to this foreign invasion of U.S. businesses is to
replace the U.S. tax code with the Fair Tax, as I and millions of other
people have advocated. This would immediately reverse that vast sucking
sound of businesses leaving this country.
Short of this ideal solution would be to lower the U.S. corporate tax
rate, as the presumptive Republican presidential candidate, Sen. John
McCain, has proposed. McCain’s proposal to lower the rate from 40
percent to 30 percent, coupled with making the Bush tax cuts permanent,
would be a lasting boost to our fragile economy.
America is on sale and most Americans don’t see the sign. Foreigners see
it in blinking neon.
© 2008 North Star
Writers Group. May not be republished without permission.
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