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The Cost Of Doing Business


Lawsuits cost the US $136 billion a year, driving up prices for consumers and businesses alike.

As any business knows, it costs money to make money. But some countries make it easier to do business than others.

The World Bank, along with the International Finance Corporation, set out to discover which nations were most business friendly. After considering an array of complex factors like corporate income and payroll taxes, local entrepreneurial laws, and government intervention, the report concluded that Singapore-for the second year in a row-was the best place in the world to do business, followed by New Zealand. The United States landed in third place.

One reason for America's third place finish is the unofficial "litigation tax" many companies face. Lawsuits cost the US $136 billion a year, driving up prices for consumers and businesses alike. According to an article in the Rutgers Law Review, there has been a steady 12% annual increase in spending for legal services in the United States. To combat frivolous lawsuits, companies such as Home Depot (HD) and Trump Entertainment Resorts (TRMP) provide warning labels for everything from avoiding spinning airplane propellers to blow-drying hair while sleeping.

But there's one place that causes over 40,000 accidents a year-join Hoofy and Boo as they warn against an all too common slip up for American business.
No positions in stocks mentioned.

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