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Why Corporate Inversions Are All the Rage
Senate Finance Committee Chairman Ronwyden (D., Ore.) recently called the American tax code a "rotting mess of a carcass." The phrase captures how repugnant the current tax system has become -- and perhaps most repugnant is the U.S. tax treatment of corporate income, especially from foreign sources.
For the story, go here.
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Corporate Artful Dodgers -Tax Avoidance du Jour: Inversion
In recent decisions, the conservative majority on the Supreme Court has made clear its view that corporations are people,with all the attendant rights. They are entitled to free speech,which in their case means spending lots of money to bend the political process to their ends. They are entitled to religious beliefs, including those that mean denying benefits to theirworkers. Up next, the right to bear arms?
There is, however, one big difference between corporate persons and the likes of you and me: On current trends,we're heading toward aworld inwhich only the human people pay taxes.
For the article, go here.
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Mr. Secretary, Take the Tax Juice Out of Corporate Expatriations
Stephen E. Shay describes the principal tax benefits companies seek from expatriating and outlines regulatory actions that can be takenwithout legislative action to materially reduce the tax incentive to expatriate.
For the viewpoint, go here. (subscription required)
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News Analysis: What's Really Driving Inversions? Walgreens Revisited
In news analysis, Mindy Herzfeld discusses the proposed inversion transaction involvingwalgreens and exploreswhy corporation expatriations are becoming more difficult to accomplish.
For the article, go here. (subscription required)
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Economic Analysis: The Many Ways to Limit Earnings Stripping
In economic analysis, Martin A. Sullivan discusses past proposals to limit earnings stripping and how they are relevant to the debate over corporate inversions and base erosion.
For the article, go here. (subscription required)
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News Analysis: Dual Consolidated Loss Rules and BEPS
In news analysis, Lee A. Sheppard discusses how the U.S. dual consolidated loss rules relate to the OECD's base erosion and profit-shifting action plan's recommendations on hybrid payments.
For the article, go here. (subscription required)
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INSIGHT-Irish, Dutch, UK law firms in tax inversion beauty contest in U.S.
A series of European law firms are aggressively pitching low corporate taxes in their countries to prospective U.S. clients, seeking to tap into the tax inversion frenzy that has seized Corporate America in recent months.
At least eight European law firms are pitching their services to major U.S. law firms andwall Street banks, hoping that U.S. companies considering an inversion choose Ireland, Britain or the Netherlands for their new tax domicile, according to peoplewith knowledge of the matter.
For the story, go here.
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UPDATE 2-Obama rails against corporate maneuver to evade U.S. taxes
U.S. President Barack Obama on Thursday hammered U.S. companies that avoid federal taxes by shifting their tax domiciles overseas in deals known as "inversions" and called on Congress to pass a bill to curb the practice.
During remarks to a rowdy crowd at the Los Angeles Technical College, Obama promotedwhat he called "economic patriotism" and made clear he believed the companies thatwere engaging in such practiceswere not being patriotic. The presidentwas in California on a three-day fund-raising swing for Democrats.
For the story, go here.
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Obama Urges Quick Action to Stop 'Inversions'
President Barack Obama threw himself into the politically charged effort to block U.S. firms from reincorporating overseas for tax reasons, calling the relocations "wrong" and urging Congress to stop them through quick-fix legislation.
Such corporate relocations, known as inversions, could become awild card inwashington in the comingweeks, particularly if more big companies announce plans to move before the midterm elections in November.
For the story, go here.
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OECD's Hickman Outlines Debate On Risk Under Action 9 of BEPS Plan
The new head of the Organization for Economic Cooperation and Development's transfer pricing unit addressed the "direction of travel" of Actions 9 and 10 of the international base erosion and profit shifting project.
Andrew Hickman,who joined the OECD on May 5, said one of the issuesworking Party No. 6 delegates are trying to make sense of iswhether tax authorities should accept the cards that the taxpayer has dealt them and play that hand accordingly, orwhether tax authorities should demand a reshuffle of the deck and start from a different point.
For the story, go here. (subscription required)
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Stack: U.S. Defending Assets, Functions, Risks as BEPS Considers Special Measures
As the Organization for Economic Cooperation and Development's action plan on base erosion and profit shifting considers "special measures," a U.S. Treasury official said the U.S.wouldwork hard in 2015 to ensure that the current arm's-length standard is clearly articulated and that profits are attributable to the place of economic activities.
Robert Stack, deputy assistant secretary for international tax affairs, said July 24 that the place of economic activities is "where the assets, functions and risks of the multinational are located."
Stack said the U.S. must further ensure that any "special measures" agreed to at the OECD are firmly anchored in these principles, "and that legal and contractual relationships are ignored in determining intercompany prices only in unusual circumstances."
For the story, go here. (subscription required)
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Obama Says Tax Law Needs to Stop Corporate Deserts
President Barack Obama attacked companies that use cross-border mergers to escape U.S. taxes, accusing them of being "corporate deserterswho renounce their citizenship to shield profits."
In remarks at a technical college in Los Angeles today, the president called for a new "economic patriotism" from companies. He also decried those that use corporate inversions to benefit economically by being in the U.S.while adding to the tax burden of middle-income families.
For the story, go here.
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The Key To Avoiding Tax Inversions: Create Tax Reform That Makes U.S. Firms More Competitive
Given a veritable flood over the last year of corporate inversions, lawmakers inwashington D.C. are debating how to respond. The arguments split, often along partisan lines, from overhauling the US corporate tax to punishing companieswho choose to move elsewhere. On July 22, Mihir A. Desai, Miuzho Financial Group Professor of Finance at Harvard Business School, testified before the US Senate Committee on Finance. His message: The answer is not in restricting the ability of firms to locatewhere it makes sense for them to be, but rather to create tax reform that makes U.S. firms more competitive.
For the testimony, go here.
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Every Business Is A Digital Business -- So How Do You Tax Them?
Lynx Professional Grillswas launched in 1996 as a high end barbecue grill manufacturer. The company,which markets itself on sleek designs and industrial grade build-quality, is a classic old line manufacturer: a company thatworkswith steel andwelders to build heavy things that people buy and plunk down in their backyards. But it's also a digital enterprise.
In fact, Lynx's new smart grill,which is voice-activated and connects to your homewi-Fi network to access recipes and cook times and send you a textwhen it's time to flip the burgers, became the darling of this year's Consumer Electronics Show.
As I'vewritten before, the growth of the digital economy is creating some serious challenges for a system of taxation that has been largely rooted in physical supply chain touch points for a hundred years. Given that framework, how do you tax groceries that are ordered directly via your gas grill'swi-Fi connection?
For the story, go here.
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Without tax reform, more companies likely to leave US
Recent cross-border merger and acquisition activity involving U.S.-based companies has garnered considerable attention. Once a cross-border merger or acquisition is being considered, one of the many optimizing decisions that must be made iswhere to locate the legal headquarters of the surviving company.
What sets the recent activity apart is that the U.S.-based companies are choosing to be taxed as foreign rather than U.S.-based companies. This has led to a growing chorus of tax experts, lawmakers and economists calling for reform of our outdated, anti-competitive tax system.
For the blog post, go here.
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Obama Administration Presses for Retroactive Legislation on Tax Inversions
The Obama administration is continuing to make its case for legislation thatwould retroactively strip the tax advantages away from many of the year's biggest mergers and acquisitions.
On Thursday, Mark J. Mazur, the Treasury Department's assistant secretary for tax policy, made the case that any new laws targeting inversions – transactions that allow American companies to reincorporate abroad – should be backdated to May 2014, potentially affecting a number of multibillion-dollar deals.
For the story, go here.
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Corporate Inversion Snapshot
Lawmakers should reduce the corporate tax rate to improve U.S. competitiveness because the current rate is a major reason for inversions, and proposals to restrict foreign ownership of U.S. corporations are "short-sighted," according to a report from Americans for Job Security released on July 21.
For the report, go here.
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Obama to Make Tax Avoidance Campaign Issue
President Barack Obama plans to go on the offensive against companies that use cross-borders mergers to escape U.S. taxes, accusing them of essentially renouncing their citizenship to shield profits.
For the story, go here.
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Making corporate tax dodgers patriotic
Corporate America's latest public relations disaster comes under the banner of "tax inversion." In an inversion, a U.S. company shifts its legal headquarters to a countrywith a lower tax rate. Just lastweek, the U.S. drug maker AbbVie agreed to buy a foreign firm, Shire, in part to reduce its corporate tax rate,which is expected to drop from 22 percent to 13 percent. In most inversions, companies keep their headquarters' physical activities ÔøΩ the people, the buildings ÔøΩ in the United States, aswould AbbVie. Still, the practice has understandably provoked a furious backlash.
For the article, go here.
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No, Corporate Tax Inversions Are Not An Unpatriotic Economic Crisis
Nothing attests to the desperation the Obama administration faces in finding an economic meme to their liking than their claim that the recent uptick in corporate inversions represents a crisis.
For the story, go here.
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Tax inversions: Washington is asking the wrong questions
Aswith many debates inwashington these days, the latest one over corporate tax inversions is centered on thewrong question and leading policy makers to thewrong answer.
For the story, go here.
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Congress Is Split on Taxing of Corporate Inversions
Lawmakerswidely concerned about thewave of companies reincorporating overseas to avoid U.S. taxes split along partisan lines Tuesday overwhether any legislation should take aim at businesses that have already relocated.
It is far from clear that Congresswill take any action in response to thewave of mergers between U.S. and foreign firms, particularly in the pharmaceutical industry. But the increasing use of the practice, known as a corporate inversion, has triggered alarm on Capitol Hill. Democrats have pushed for short-term fixes, but many Republicans are reluctant to take on the issue except as part of a broader tax-system overhaul.
For the story, go here.
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Treasury Official Says Government Will Tax Earnings From IP Moved Offshore
The U.S. governmentwill continue a sharp focus on ensuring companies pay taxes on their overseas earnings if they develop intellectual property in the country and move it offshore, a senior Treasury tax attorney said.
"The U.S.wants to make sure thatwe get to tax properly the income earned from the IP thatwas developed in the U.S.," Douglas Poms, senior counsel for the Treasury Office of International Tax Counsel, said. He said the Internal Revenue Servicewill look at royalties on the IP to determine the tax.
For the story, go here. (subscription required)
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Lawmakers Getting Noisy Over Inversion Bill But Harmony Has Yet to Emerge in Congress (1)
Consensus on Capitol Hill remains fleeting over how to address tax-driven corporate mergers called inversions despite a mounting chorus for some sort of solution. More than a dozen such deals have been completed or announced this year and another 25 could happen before the end of 2014, further eroding the U.S. tax base,warns Senate Finance Committee Chairmanwyden.
For the story, go here. (Subscription required)
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Lawmakers fault inversion craze, but split on solution
Republicans and Democrats are deeply divided overwhat should be done to stop companies from slashing their tax bills by moving their legal addresses outside the United States.
While both parties broadly agree the "inversion" deals threaten to drain the Treasury's coffers andweaken the U.S. tax base, they are finding little common groundwhen it comes to a legislative solution.
For the story, go here.
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Jack Lew's Strange Definition of 'Economic Patriotism'
Treasury Secretary Jack Lew gets one thing right in his letter to Congress on corporate "inversions": the recognition that the "bestway to address this situation is through business tax reform that lowers the corporate tax rate, broadens the tax base, closes loopholes and simplifies the tax system" ("Jack Lew's Flee America Plan," Review & Outlook, July 17). If it's the bestway, and America's business leaders certainly agree it is, thenwhy pursue an ad hoc, punitive alternative as now being proposed by the administration?
For the letter, go here.
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The True Patriotic Response to our Growing Tax Crisis | Commentary
On Tuesday, the Senate Finance Committee is scheduled to hold a hearing thatwill examine a critical issue impacting the long-term health of the U.S. economy – our international tax system. Dubbed "Love it, Leave It or Reform It!" the committee promises to delve into the specific issue of corporate tax inversions,which describes a practicewhereby companies reincorporate in a foreign country.
It is no coincidence that the hearing also takes place on the heels of U.S. Treasury Secretary Jack Lew calling for American companies to pursue so-called "economic patriotism" in their international business practices.
For the article, go here.
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Stop inversions by restoring growth and job creation
As the United States continues its slow recovery from the Great Recession, a growing number of U.S. businesses are moving overseas or looking forways to move overseas in order to take advantage of more competitive tax rates. This trend, known as inversion, and the jobs thatwill certainly follow, pose a grave threat to continued economic growth.
The reason for the migration? America's corporate tax rate. Our combined federal-state corporate rate of 39.1 percent is the highest in theworld and it is accompanied by a tax system that is incredibly complex and has grown into the tens-of-thousands of pages.
For the blog post, go here.
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How Can the U.S. Stop Corporate Tax Flight?
In recent months, several big U.S. companies have reached so-called inversion deals thatwill allow them to reincorporate in countries like Ireland and the Netherlands,where corporate taxes are lower.
Are these deals a sign that corporate taxes should be lowered so American companies can compete on a level playing fieldwith foreign companies, or are they an example of self-serving greed that should be outlawed so companies builtwith American support pay their fair share?
For the debate, go here.
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Present Law And Background Related To Proposals To Reform The Taxation Of Income Of Multinational Enterprises
The Joint Committee on Taxation summarized current law and the background of proposals for reforming multinational company income taxes in a July 21 report (JCX-90-14) prepared in advance of a Senate Finance Committee hearing on the topic.
The JCT report provides an overview of international tax principles in the U.S. tax system, principles of inbound and outbound taxation, and U.S. tax rules regarding inbound and outbound investment. It summarizes concerns regarding promotion of U.S. investment and expansion of home-country firms, and discusses recent actions by the OECD to prevent base erosion and profit shifting and other global activity related to taxing cross-border income.
For the report, go here.
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Tax Inversions Must Be Stopped Now
On Friday the U.S. drug maker AbbVie announced a plan to buy the U.K.-based Shire in a $54 billion deal, fromwhich AbbViewill emerge as a subsidiary of the U.K. firm. It is but the latest example in a flurry of acquisitions known as inversions.
The deals are driven by planning to avoid paying the U.S. tax that applieswhen firms repatriate their low-taxed foreign earnings to the U.S. This has triggered demands -- most recently, from Treasury Secretary Jack Lew -- to close down inversions through the tax code, or to deprive inverted firms of government contracts or other benefits.
Firms that invert argue that the deals are "legal," harmless to U.S. tax-revenue collection, and a necessary response to our anticompetitiveworld-wide corporate tax system. The first point is a red herring and the second demonstrably false, but there is a kernel of truth in the third.
For the op-ed, go here.
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JCT Presents Policy Overhaul Options As Lawmakers Focus on Cross-Border Tax Issues
Much-criticized U.S. tax laws on foreign-derived income are up for discussion during a Senate Finance Committee hearing July 22,with tax-driven mergers known as inversions certain to be part of the debate.
"Critics have had a few broad, sometimes conflicting policy concerns," said a report released ahead of the hearing by the Joint Committee on Taxation, "Present Law and Background Related to Proposals to Reform the Taxation of Income of Multinational Enterprises."
The report (JCX-90-14) summarized several options for overhauling U.S. tax laws on cross-border income. Current rules provideworldwide taxation of all U.S. persons on all income,whether derived domestically or abroad, but allow deferral of U.S. taxation of much foreign business income derived by foreign subsidiaries of U.S. companies.
For the story, go here. (subscription required)
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The Great Tax Inversion Death Spiral
Congress and corporate America are in a dangerous and mutually destructive race: The more lawmakers threaten to ban the practice of inversionsÔøΩwhere U.S. based multinationals mergewith foreign firmsto lower their tax bill– the more firms race to complete the dealswhile they can. The more deals, the more pressure on Congress to ban them.
And as themarket for inversions heats up,the odds lengthen against real reform that could address the fundamental problemwith the U.S. corporate tax system.
For the story, go here.
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Give U.S. multinationals an incentive to not dodge taxes
When is a U.S.-based company not considered a U.S. company by the IRS?when it buys a smaller firm in a foreign country and ÔøΩ presto chango! ÔøΩ deems that company to be its parent, escaping the obligation to pay taxes to the U.S. Treasury on its foreign earnings. This process, called "inversion," is becoming increasingly popular among U.S. multinationals, drawing howls from lawmakers and the Obama administration. But a quick legislative fixwon't last long. That's because the larger problem is a uniquely flawed U.S. tax code that encourages multinationals to engage in all sorts of accounting gimmickry.
For the editorial, go here.
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Are U.S. Corporate Tax Inversions a Necessary Crisis?
Suddenly, the hottest tax arbitrage game is the "tax inversion,"where U.S. companies seek to lower its tax rate by buying a foreign rival. The latest deal came Fridaywhen U.S. drug makerAbbieVieannounced itwould buy Dublin-based Shire. The $54 billion deal followsMylan'smove to buy assets from Abbott Laboratoriesearlier thisweek in a deal thatwill create a new Netherlands-based holding company. In May, U.S. pharmaceutical giant Pfizertried to relocate in the U.K., but a deal to buy AstraZeneca fell through.
One of the best cries of outrage appeared inAllan Sloan'spiece inFortuneearlier this month. The patriotism angle I get, but then again,why blame corporate chiefs for taking advantage of tax games that are perfectly legal, especially in a rapidly globalizing economy?
For the article, go here.
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IRS Taking a Fresh Look at Double Dips in Light of BEPS
European sensibilities are offendedwhen checked entities, disregarded for U.S. tax purposes, deduct outbound payments that are not taken into income by their U.S. parents. So the hybrid discussion draft recently released as part of the OECD base erosion and profit-shifting initiative calls for the checked entity's country of residence to disallow a deduction.
On July 17 the International Tax Institute discussed the OECD BEPS recommendations for treatment of hybrid payments in light of the U.S. dual consolidated loss (DCL) rules. John Merrick, special counsel to the IRS associate chief counsel (international), added his thoughts to the discussion. He is a veteran of the development of the 2007 DCL regulations (T.D. 9315).
For the story, go here. (subscription required)
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UN BEPS Panel Plans October Report, Issues Responses From Brazil, Mexico, Singapore
A subcommittee of the United Nations' Committee of Experts on International Cooperation in Tax Matterswill report on base erosion and profit shifting issues to the committee in October, and has published details from a trio of countries on their experience on BEPS issues so far.
Michael Lennard, chief of the UN's international tax cooperation unit, told Bloomberg BNA July 17 that the UN subcommittee on BEPS issues for developing countrieswill report to the committee at its 10th annual session in Geneva Oct. 27-31.
For the story, go here. (subscription required)
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Merger Rush for Offshore Tax Break Bets on U.S. Stalemate
U.S. companies are racing to complete tax-reducing offshore mergers before a credible threat to stop them emerges from Congress.
AbbVie Inc., maker of the arthritis medicine Humira, announced the largest such inversion deal July 18with a plan to move its tax home to the U.K. in a $55 billion purchase of Shire Plc. It joins seven other companies, including Medtronic Inc.,with pending deals thatwould be unwound, renegotiated or penalized under plans from the Obama administration and Congress to make tax changes retroactive to May.
For the story, go here.
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Ignoring the Facts on Corporate Inversions
'I never let the existence of facts cloud my judgment." This commentwas made to me years ago by a colleague at McKinsey & Company during a debatewhere his factswerewrong, but his opinion firm.
That remark sums up the debate about corporate inversions, deals inwhich companies reincorporate overseas.
The raging debate about these decisions has been absurd, and people expounding on the topic are makingwild claims that inversion is an abuse of the tax code, cheating and unpatriotic. It all makes for emotional and dramatic headlines and debate but ignores the facts.
For the story, go here.
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Tax avoidance and the rise of creative M+A
Over the past two years, 'tax inversion' deals have been leading the global M&A sector out of the doldrumswhile drawing attention to the creative side of accountants and investment bankers.
It's just the latest battlefield in theworld of corporate tax avoidance and provides a note of caution towhatwould otherwise appear to be an M&A boom.
The controversial process involves a company buying a rival firm in another region of theworld, reincorporating in that region and consequently exposing itself to a lower tax rate. It has proven especially popular in the US pharmaceutical sector as American firms seek out the comparatively kind tax regimes of Ireland, the Netherlands and the UK.
For the story, go here.
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How not to improve the corporate tax structure
Thisweek, two more U.S. companies moved to reestablish themselves overseas, allowing them to pursue lower corporate tax rates. Theywill join dozens of otherswho have chased lower tax bills abroadwhile maintaining operations in the United States, benefiting from the U.S. business climate, legal stability and research investmentswithout helping to pay for these advantages. Treasury Secretary Jack Lew pressed Congress on Tuesday to close the avenues in U.S. law that allow companies to evade corporate taxes by moving to foreign countries.
Instead, just lastweek, the House passed a bill thatwould make it more difficult to keep U.S. companies in America.
For the story, go here.
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More on Inversions: Foreign-Owned Companies Pay a Higher Effective Tax Rate than U.S. Companies
One of the common themes in the debate over corporate inversions is that these transactionswill erode the U.S. tax base and cost the Treasury billions of dollars in lost taxes.
What is interesting is that the latest IRS data for 2011 shows that the U.S. subsidiaries of foreign corporations pay a higher effective tax rate than do all active corporations in general. The IRS data for active companieswith more than 50% foreign ownership indicate that in 2011 these companies paid $35.7 billion in income taxes on $130 billion in income subject to tax, for an effective tax rate of 27%. By contrast, the average effective tax rate for all active C-corporationswas 22% in 2011.
Many press stories on the inversion issue give the false impression that by changing their headquarters to another country (the U.K. for example), the "new" companywill stop paying U.S. income taxes. Nothing could be further from the truth. These companieswill continue to pay U.S. income taxes on the profits they make in the U.S.what changes is that their foreign earningswill no longer be subject to the U.S.worldwide tax system.
For the story, go here.
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Democrats Rally Against Tax Deals With Eye on Elections
Washington is buzzing this summer about inversions, and the chatter has nothing to dowith theweather.
Thisweek, Treasury Secretary Jacob J. Lew and Senate Majority Leader Harry Reid became the latest to press for a crackdown against corporate inversions. These arewhen U.S. companies switch their addresses to low-tax nations like Ireland, often through a takeover of a smaller company, reducing their tax billswhile typically keeping their headquarters and listings in the U.S.
White House Press Secretary Josh Earnest said President Barack Obamawill discuss the issue more in comingweeks.
For the story, go here.
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Fix the tax code to stop offshore exodus of US companies
Our nation's corporate tax policy has reached such a point of disrepair that pundits are now invoking taxpayers' patriotism to reverse an exodus overseas by corporate America. Instead, Congress should lower effective tax rates so the U.S. can compete in the global economy and to incentivize companies to stay at home.
In recent years, American corporations have found a new tax-planning strategy: votingwith their feet. Some of the largest U.S. companies are moving offshore like so many retired New Yorkers finding tax shelter in Florida residency.
For the story, go here.
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We Don't Need a Corporate Income Tax
You can think of corporate taxation as a sort of long chess match: The government makes a move. Corporations move in response -- sometimes literally, to another countrywhere the tax burden is less onerous. This upsets the government greatly, and the Barack Obama administration in particular. Treasury Secretary Jack Lew haswritten a letter to Congress, urging it to make it stop by passing rules that make it harder to execute these "inversions."
I've got a better idea:what ifwe made our tax system so attractive to corporations that theywould have no interest in moving themselves abroad?
For the article, go here.
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Corporate Tax: Is It All About Patriotism And Morality?
Well, itwas only a matter of time before the tax and morality debate that has been brewing in Europe invaded the shores of the United States. And there is an unlikely commander helping to establish a beachhead in the attack on U.S. multinationals – then again, maybe not so unlikely.
In a blistering piece in last Sunday'sWashington Post, Allan Sloanassails U.S. multinationals that invert, often by mergingwith a foreign corporation in a low-tax jurisdiction to avoid the high U.S. corporate tax rate. In most cases, the only thing that really happens in an inversion is that the U.S. corporate tax base shrinks.
For the story, go here.
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Obama takes aim at firms that shift profits overseas to avoid taxes
The Obama administration called out corporate America for its growing use of a tactic to avoid paying taxes and urged lawmakers to act quickly to put a halt to the maneuver.
In a sharplyworded letter to key congressional tax codewriters, Treasury Secretary Jacob J. Lew pushed for legislation thatwould make it more difficult for U.S. companies to reorganize as foreign firms in lower-tax nations.
The practice, known as inversion, enables the new company to avoid paying the high U.S. corporate tax rate on its foreign earnings.
For the story, go here.
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Obamas economic patriotism cash grab
It'swiseto be on your guardwhen the Obama Administration trots out a new catch phrase. Today that catch phrase is "economic patriotism,"which has been re-defined to mean "preventing corporations from doing the smart thing and fleeing from the grasping hands of greedy politicians." Obama's not big on securing the southern border againstwaves of illegal immigrants, but he's very keen on building fences to keep peoplein.
For the story, go here.
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OECD approves the 2014 update to the OECD Model Tax Convention
The OECD Council approved yesterday the contents of the 2014 Update to the OECD Model Tax Convention. The Update,whichwas previously approved by the Committee on Fiscal Affairs on 26 June,will be incorporated in a revised version of the Model Tax Convention thatwill be published in the next few months.
For the release, go here.
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Congress at Odds Over How to Curb Inversion Deals
A lot more American firms couldwind up moving overseas for tax purposes beforewashington manages to do anything about the problem, despite new pressure from the Obama administration for congressional action.
The issue has gained prominence inwashington aswell. Treasury Secretary Jacob Lewweighed in on Tuesday evening, urging lawmakers to take action "immediately" to "shut down this abuse of our tax system." The comments came in a letter from Mr. Lew to members of the congressional tax committees. Senate Finance Committee Ronwyden (D., Ore.) quickly issued a statement onwednesday signaling new interest in a near-term solution.
But lawmakers for now remain deeply divided overwashington's response.
For the story, go here.