Fiscally conservative ‘Blue Dog’ Dem­ocrats in the House of Representatives are significant in number; when combined with Republican members, they create the possibility for a different majority. So, all that is proposed may not be enacted. But more money will need to come from somewhere, so many business leaders are planning accordingly, focusing on two issues:

As the US approaches becoming one of the world’s highest corporate tax locations, transfer pricing and its regulation is attracting increased attention. Already the subject of much demagoguery, accounting for transfer pricing has a big impact on the financial results of US-based companies operating abroad as well as international companies with significant operations in the US.

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With federally imposed costs and taxes rising, the marginal impact of state and local taxation becomes increasingly significant in business-location choices. This year’s economic situation has amplified the fragile fiscal condition of many locations,

but it has also revealed where the financial fundamentals are stronger. In the US, the worst states may well get worse. They are turning to political allies in Washington for fiscal assistance and to level the playing field, especially regarding unionisation.

Many business leaders are wary about speaking out too loudly; their companies have much at stake as the government impacts upon their top and bottom lines. Wall Street seldom looks to change the course of events; rather, investment bankers just seek to profit from them. In the media, there are some who make an argument for business-friendly policies, but the US has few politicians who are both willing and able to sharpen this debate. At a time for truth-telling, tellers are scarce.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world’s leading companies and served in the public sector as director of White House operations.

E-mail: daniel.malachuk@gmail.com