May 09,2002

Stanley Works Vote to Move Overseas to Avoid Taxes

Today shareholders of tool maker Stanley Works approved relocating the company’s legalresidence to Bermuda, a move that will allow it to avoid some of its U.S. tax obligation. Sen. ChuckGrassley, ranking member of the Committee on Finance, is the co-sponsor with committee chairmanSen. Max Baucus of legislation to rein in so-called corporate expatriation. The senators introducedthe Reversing the Expatriation of Profits Offshore (REPO) Act (S. 2119) on April 11. The bill ispending in the Finance Committee. Grassley made the following comment on today’s StanleyWorks vote.

“A tax partner at Ernst and Young predicted that patriotism would take a back seat to profitsafter the emotion surrounding the events of September 11 began to fade. It looks like she was right.Here’s a company pulling up stakes when the clean-up at Ground Zero is barely done. That’s toobad.

“In March, Senator Baucus and I warned Stanley Tools and other companies considering thismove to reconsider. We promised to fight corporate expatriation, and we introduced legislation tostop it. Now Stanley Works is setting up a showdown with Congress.”

“Company officials might say that our international tax rules are flawed, and they’re right.Congress needs to fix those rules so companies can compete better in the global marketplace. Butthe solution isn’t to pull up stakes and set up a filing cabinet someplace that doesn’t charge taxes.The solution is to stay here and pay your share and work with Congress to fix what’s unfair aboutthe tax system.”