company s profits, out of their margins. in order to be competitive, they have to bring that tax rate down. it doesn t look like it s going to happen from washington. so the only way they can do that is by acquiring a foreign company or merging because the income they make there will not be taxed at u.s. rates. if you add in state levies to the u.s. corporate rate, it is double that of europe s corporate tax rate. so there really is a huge disadvantage to american businesses. when you talk about tax reform, of course that s a huge mountain to climb, probably won t happen before the mid term elections. do you ever see it happening and is it a must do in. you look at the tax code. you know doing your own taxes how difficult it can be. it s a big headache. a migraine in many cases.
company to consider the strategy. the giant is said to acquire a european chain and move its headquarters from illinois to switzerland potentially saving hundreds of millions of dollars of year. james, what s behind this recent flurry of these tax changes, acquisitions overseas? why now? business has figured out we re not going to have any reform of this insanely high tax rate. we the state levies, it s 40%. on average. which is double the average in europe. so this is a massive tax take from the u.s. government to u.s. companies. along with that we have what s called a worldwide tax system. so we tax earnings twice. what they make in foreign countries gets taxed by the local country and by the u.s. only six countries in the world do it our way. it s a way to drive business out of the u.s.