We have previously written about how the United States ought look to Switzerland for guidance on its corporate tax policy. However, with the release of President Obama's FY2011 budget yesterday, and its total and utter failure to address the endemic problems with the U.S. tax code,  a Wall Street Journal story today is particularly timely on how tax competition provides benefits to all:

The cantons of Lucerne and Obwalden have also cut tax rates. In 2006, Obwalden, south of Zug, undercut Zug to introduce the lowest corporate rate in Switzerland, 12.7%. Obwalden built an industrial park last year, increased its marketing budget and improved the highway to the Zurich airport. It has attracted 450 small companies for each of the past three years, netting 2,000 new jobs.

 

Switzerland's cantons are offering low tax rates to tempt multinationals to establish regional headquarters or other operations in their jurisdictions. In doing so, other states are trying to take business away from Zug, the canton that has mastered the game of attracting business to such a degree that it is beginning to run out of space.

Since the 1960s, Zug has set the pace in persuading multinationals to set up shop, drawing names such as Johnson & Johnson, Burger King Holdings Inc. and Siemens AG. As Zug now runs short on housing and office space, cantons nearby are getting in on the act. "Zug made an extremely good decision years ago to have a competitive tax code," says Georges Meyer, a tax partner at PricewaterhouseCoopers in Zurich. "Now you see a trend of neighboring cantons trying to attract business too."

Not only do they have sound Tax Policy... they have a beneficial policies as it relates to Health Care and Foreign Affairs. One of the few Eurpoean countries that the US should look to when trying to find good examples of how to run things.
>> Grant, PA Tuesday, February 2, 2010 2:31 PM Report Comment