Why Stanley Works is no loss to Bermuda
|Cathy Duffy |
Insurance Issues by Cathy Duffy
Some are reacting to the Stanley Works decision to remain in the US as if it was really bad news for Bermuda.
The decision may do more good for Bermuda than bad. With Stanley Works making the decision to stay in Connecticut, the pressure will finally be off Bermuda. Now we can go about doing what we do best - providing an infrastructure that does not strangle business.
The US politicians who fought for this Patriot Tax issue can now move on to something else. Stanley Works to the politicians was more about ...view middle of the document...
Bermuda does not lose because the only reason Stanley Works wanted to reincorporate here was for tax reasons. Without a physical presence, the only people who would have benefited would have been the lawyers drafting the paper work and keeping the books for the company. Stanley Works would have been a true post office box as is so regularly written up in newspapers around the world.
What most Americans are not seeing are the deals that are being done under the table which will ultimately lose more taxes for the US economy than if Stanley Works would have reincorporated in Bermuda. The July 17, 2002 New York Times edition ran an article by David Cay Johnston called, "Bill Closing Bermuda Loophole Also includes Tax breaks". Cay says, "The bill would also create two permanent tax breaks that combined are worth $60.8 billion, nearly ten times the size of the so-called Bermuda loophole. These new loopholes tilt incentives in favour of American multinationals investing overseas rather than at home, critics and even some supporters of the bill said. Many speculate that the new bill will encourage companies to "move production and services overseas, costing Americans their jobs."
Speaking to average Americans about Stanley Works, I learned they were under the impression that Stanley Works was going to move its manufacturing operations out of Connecticut to Bermuda. They did not realise that it was merely a case of setting up a post office box to save taxes so Stanley Works could remain competitive globally. What will happen when Stanley Works starts moving more of its production to say Taiwan or China where it can operate more efficiently and Stanley begins to hire the local people there because it is much cheaper to do so? What jobs will people in Connecticut have then? What picture of Stanley...