Could This Be the End to an American Icon in the U.S.?
Could This Be the End to an American Icon in the U.S.?
Samuel Adams was one of our great Country’s founding fathers and an American statesman. However, despite his political accolades and contributions to the United States, his name might be better known as a brand of beer. That right; if you asked who Sam Adams is, many people would better identify the name with one of the many brands of beers made by east coast brewer the Boston Beer Company. So what would one of our country’s original founders think if he heard that the beer company most famous for his name could possibly be considering making a move to foreign land? While the very thought could cause him to turn over in his grave, that possibility could become a reality at some point in the future, thanks to the country’s antiquated corporate tax system.
The Buyers Are Coming, The Buyers Are Coming
According to Jim Koch, the company’s founder, while he is not planning a move anytime soon, he fears that it will only be a matter of time before the brewing company packs up and heads to foreign soil; most likely via a purchase by a foreign beer maker. In fact, Koch recently told a senate committee that he would probably be the last American owner of the Boston Beer Company. The reason, according to Koch, is his company would be worth a lot more to a foreign owner than it is to someone who lives under the guise of the broken U.S. corporate tax structure. While Koch is still loyal to his country, he also said he receives pitches from potential buyers to purchase his company regularly.
Broken System Not Getting Better
The reason Koch was in front of the senate committee in the first place was because lawmakers wanted to discuss the tax rules that are currently in place that would serve as fuel for companies to consider either moving their headquarters overseas or selling them to a foreign buyer. America is well known for taxing corporations harshly, which puts many companies at a disadvantage. It’s also why so many companies pack up and move, or eventually sell out. The U.S. would like to put a stop to this practice, but until it fixes the corporate tax structure the practice will continue. The reasons are obvious.
The Numbers Don’t Lie
It’s all in the numbers. Take Boston Beer Company for example. The brewing company recently reported its second quarter earnings, which included about $47 million of pretax income. Every dollar of pretax earnings is worth 62 cents to the company. However, if a foreign company or investor owned it, every pretax dollar would be worth 72 cents. That’s a significant difference. So while the company remains on American soil for now, unless lawmakers change the current corporate tax structure in the U.S., then Sam Adams could soon be looking for new territory to call home. That could leave one of America’s revolutionary heroes in a peculiar situation.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
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