Obama Mulls Ways To Force “Economic Patriotism” On Companies Looking To Bail On US Tax Rates
Obviously, he’s looking for positive ways to get companies to stay, right?
(NY Times) The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills, seeking to stanch a recent wave of so-called corporate inversions, Treasury Secretary Jacob J. Lew said on Tuesday.
Treasury Department officials are rushing to assemble an array of options that would essentially wipe out the economic incentive for the deals, Mr. Lew said. No final decision has been made.
“The question is, Can we do enough that it will materially change the economics of inversions so that companies will make different decisions?” Mr. Lew said in an interview. “The things we are looking at look to me like they could very materially change the economics of inversions.”
The action comes in the face of a recent increase in United States companies reaching deals to reorganize overseas, creating an explosive political issue that Mr. Obama has called a lack of “economic patriotism.”
Companies reorganize in nations that are tax friendly. They do this for two reasons. First is the 35% US tax rate, one of the highest in the developed world. Second, they want to avoid double taxation, where they are taxed on earnings in other countries. More and more companies are looking to do this
It would be the latest move by the Obama administration to use its authority to act where Congress will not. A provision in the president’s budget would have effectively banned inversions, and Democratic lawmakers have introduced legislation to halt or suspend them. Still, while some Republicans say they want to address the issue, there has been little bipartisan agreement on how to do so.
Would that be the budget that the Democrat Congress refused to even vote on? You can see the strong arm of Progressive fascism, where, instead of enacting positive ways to incent corporations to stay, they will be restricted. Obama has also been running around the country slamming companies for considering and actually going through with inversions. Because vinegar has always been the best method in catching flies, ya know!
The best way to stop them is to lower the tax rate, make it competitive with the other developed nations.
At least Obama isn’t considering “loyalty oaths” for companies. Yet.
Just like the American people, Obama has no respect for the Constitution or for separation of powers, and he is going to do anything that he thinks will be popular, safe in the knowledge that nobody will do anything about it.
This is one of Obama’s craziest ideas, and that’s saying something. Taxation without representation, I remind the reader, was thought to be a legitimate reason to overthrow the government in revolutionary times.
One has to wonder, if corporate inversions are so bad (and they can harm American taxpayers and shareholders), has Obama even attempted to talk to Congress? Has he offered concrete legislative plans? Has he said “let’s meet and discuss”? Based on his history, the answer to all are “probably not”. He barely talks to people in his own party.