Coca-cola critizes the States’ Tax Policy

             Financial Times reports on Sept 26 that the CEO of Coca-Cola, Muhtar Kent criticizes the States’ tax rule. He argues that the US’s tax burden creates uncertainties in business and may put itself into a disadvantageous condition in competing with other countries such as China, Russia or Japan. Indeed, while companies in other countries have control over the money they earned abroad, American companies face tax burden.

Kent’s speech causes controversies in US. However, it shows the US’s potential problem caused by the tax policy. Government usually intervenes to re-allocate the resources. However, some businesses may lose confidence in local market due to the large tax burden. Therefore enterprises may transfer from concentrating their businesses locally to operating oversea to seek for development opportunities. In another word, the US will be losing resources in this way and the growth of domestic industries will slow down.

It also reveals that the economy development of some foreign countries is rapid, and it is necessary for the US and Canada to reform its policies regarding to this. The government can provide incentives to attract more domestic and foreign investors and take advantage of this opportunity to accelerate the recovery from crisis and development.