S&P 500 Company Aon to Flee Taxes by Redomiciling in London

Giant insurance firm Aon has decided to break new ground in corporate redomiciling by moving its headquarters to the United Kingdom from Chicago. As Richard Murphy writes, this is because the City of London is a tax haven, and because the UK does not tax worldwide income like the U.S. does. According to the Financial Times (via Murphy due to paywall):

Aon is to become the first ever US S&P 500 company to become domiciled in the UK after the insurance broker unveiled plans to shift its headquarters from Chicago to London.

 Murphy points out that the company could pay as little as 5.75% in taxes, depending on how it structures its corporate empire. Aon is already well-positioned to take advantage of British tax laws, with subsidiaries in such UK-related tax havens as the Isle of Man, Gibraltar, the Cayman Islands, the British Virgin Islands, Bermuda, and Guernsey.

Unlike Sears, for example, which used the threat of moving to extract up to $275 million in tax breaks from Illinois (and then announced it was shutting 100-120 Sears and Kmart stores nationwide), Aon actually is leaving Chicago, although it is only moving the CEO and about 20 employees while changing its legal place of incorporation.

I hate to sound like a broken record, but it bears repeating: what Aon saves in taxes will be borne by the middle class, either through higher taxes, cuts in government programs, or higher government budget deficits. It's time for the Obama administration to do more about tax haven than just talk about reform; it's past time for action.