Address Change

by digby

I thought this ws a joke when I heard about it, but it isn’t:

Halliburton Co.’s decision to relocate its chief executive and corporate headquarters to Dubai has scratched one of Congress’ most sensitive sore spots — suspicion that U.S. corporations are restructuring their operations to shirk domestic taxes.

Adding to a rush of Democrat calls for hearings, the House is pushing forward a bill whose accompanying report will ask the White House to address no-bid government contracts for contractors who relocate overseas, an apparent reference to plans by the defense contractor and oilfield services company.

But despite the mini-maelstrom created by its Sunday announcement, Halliburton’s is unlikely to see its tax bill shrink by much, say tax experts.

Unlike the well-publicized cases of Stanley Works, Halliburton says it has no plans to change its Delaware-incorporated company to an overseas tax jurisdiction.

Only the address on Halliburton Chairman and Chief Executive Dave Lesar’s business cards will switch, from Houston to Dubai.

Ok then. No big deal, right?

U.S. companies do not have to pay domestic income taxes on earnings of a foreign subsidiary until they decide to bring the money back into this country, a process known as repatriation. Dubai has no corporate income tax, a big advantage compared with the 35% corporations pay on earnings at home.

And U.S. companies typically do not pay U.S. payroll taxes on their overseas workers.

Overseas “workers” like their CEO who has a business card that now says Dubai.

C’mon.