The New York Times yesterday joined the attack on Bermuda as a tax-cutting magnet for international business.

In an editorial the paper slammed an “alarming exodus of greedy companies'' reincorporating in Bermuda.

The editorial - from a paper with a daily circulation of more than 1 million - was titled: “The Bermuda Tax Triangle” and was the lead column in the Times' editorial and letters page on Monday.

The editorial focused on manufacturing giant Stanley Works which secured shareholder approval last Thursday to reincorporate to the Island.

The results of that vote, however, are now being contested and a re-vote at an unspecified date is planned.

The editorial read: “Stanley Works ought to change its name to Stanley Flees.

“The maker of distinctive black-and-yellow tools that for 159 years has made its home in New Britain, Connecticut is planning to reincorporate in Bermuda in order to stiff Uncle Sam.

“Stanley is only the latest in an alarming exodus of greedy companies, but the prospect of the venerable firm taking off for a tax haven caused one local congressman (Rep. James Maloney) to note that Benedict Arnold, too, left Connecticut and sailed off to Bermuda.”

The Times piece pointed out that although Stanley was within the limits of the law in moving to Bermuda, it said: “Fleeing to Bermuda is not a constructive way of participating in the national dialogue.”

The editorial allowed that a revamp of the American tax code could be looked at: “Like a number of insurance firms and other industrial companies that have gone before it, Stanley says its move would be a way to remain competitive in a global economy.

“The United States, unlike many countries, taxes its companies' overseas profits.

“By setting itself up as an offshore entity, Stanley would shield from the Internal Revenue Service its profits made elsewhere, for an estimated annual savings of $30 million.”

It continued: “Whether the tax code's treatment of overseas earnings should be revised to level the playing field between American companies and foreign competitors is worth debating.”

The Times also pointed out that Stanley could theoretically take steps towards lowering its taxation on US-source income, after incorporation to Bermuda

“More insidiously, Stanley would also be in a position to avoid paying taxes on profits made within the United States.

“This becomes possible under a popular tax-avoidance scheme being peddled by major accounting and law firms that involves - in addition to reincorporating in Bermuda - establishing corporate residence in a second sunny offshore jurisdiction, Barbados.

“Under the terms of a favourable tax treaty, corporate profits earned in the United States can be shipped there and essentially laundered into deductible expenses.”

The editorial concluded: “Congress must look at ways of closing these loopholes.

“Even in the best of times, it is outrageous for companies to engage in offshore shenanigans to avoid paying their fair share of taxes.

“Doing so after the Enron scandal, in dire fiscal times and when the nation is at war is unconscionable. What was John Trani, Stanley's chief executive thinking?” it said.

Meanwhile, one of the legislators behind proposals of legislation to penalise US companies that move offshore, Sen. Charles Grassley - who, along with Senator Max Baucus introduced a bill “Reversing the Expatriation of Profits Offshore” (REPO) last month - said according to news reports yesterday: “In March, Sen. Baucus and I warned Stanley Tools and other companies considering this move to reconsider. We promised to fight corporate expatriation, and we introduced legislation to stop it. Now Stanley Works is setting up a showdown with Congress,” he said.

The furore was also the subject of an editorial in US News & World Report written by Randall Stross last week. The piece ran as a tongue-in-cheek Q&A on companies that try and evade paying taxes on all income, titled: “Oh, for haven's sake!”

It ran with questions such as “What's that bad smell?” and queried how many Bermuda employees Tyco International - another Bermuda-based company to come under fire for its place of incorporation - had. Its answer was two, but a call by The Royal Gazette to Tyco's spokesperson Maryann Kane revealed that the report got it wrong, apparently. The Tyco office in Bermuda employs “approximately 30 staff”.