The US companies move their headquarters to Europe. A new wave of relocations was caused by an opportunity to curb taxes paid at home. The US corporate tax rate is 35%, the highest in the developed world. Thus, in OECD countries an average corporate income tax is 25%. So more and more US-based companies are looking to pack their bags. Of course, the US government is not enthusiastic about such decisions and tries to introduce additional administrative barriers to block these initiatives. Michael Spence, a Nobel laureate in economics, also believes that such actions make the situation worse. According to him, it would be more sensible to draft a bill that would eliminate the US companies’ temptation to move abroad. In other words, providing firms with favorable conditions in the US will exclude the need to introduce administrative bans. Moreover, lower taxes would accelerate employment and production growth and would provide an increase in revenues. As the result of the US government’s actions, the American business has about $2 trillion in revenues abroad, which have never been taxed by the United States.
