The Corporate Tax Dodge Continues - NYT Editorial

Johnson Controls, an industrial and auto parts supplier headquartered in Milwaukee, announced this week that is was selling itself to Tyco International, a maker of fire safety products based in Ireland. The deal will let Johnson Controls pass itself off as Irish and, in the process, cut its taxes in the United States by at least $150 million a year.

Johnson Controls is not the first American company to avoid taxes by merging with a smaller company in a low-tax nation, and it won’t be the last. Nor is it the biggest. That distinction goes to Pfizer, which is in the process of becoming Irish, having merged last year with a smaller company based in Dublin.

Johnson Controls is, however, the latest and quite possibly the most brazen tax dodger. The company would not exist as it is today but for American taxpayers, who paid $80 billion in 2008 to bail out the auto industry. Johnson Controls’s president personally begged Congress for the bailout, which came on top of huge tax breaks that the company has received over the years, including at least $149 million from Michigan alone from 1992 to 2009, according to The Times.