“Tax Inversions“ are a popular strategy for American companies to save money by moving their tax domiciles abroad.General Electric, for example, recently sells its entire appliance division to a foreign company, Electrolux of Sweden, for $3.3 billion. (Sommer, 2014) By doing this, General Electric not only promotes its products to the other countries in the world but also automatically increases its profit with paying less tax.
In the name of promotion and development, General Electric seemingly benefits itself without violating law and rules. But if more and more companies in the United States utilize such strategy to reduce the cost, the government tax revenue in the domestic will decrease. Thus in some degree, “Tax inversions” violate interest of the whole country. Business as a whole, connects each group of stakeholders and requires each group to be responsible. Law is not the only standard to determine whether a company can implement a strategy. Besides law, there must be other standards such as a company’s social responsibility to evaluate the implementation of the strategy.
Picture from: https://www.ralstonreports.com/blog/poll-two-most-popular-things-nevada-are-margin-tax-and-gov-sunny
Reference: Sommer, J.(2014 September 13). Jeers and Cheers Over Tax Inversions. Retrieved from http://www.nytimes.com/2014/09/14/your-money/jeers-and-cheers-over-tax-inversions.html?ref=international