Economists Stephen Moore & Arthur Laffer: “Inversions vividly illustrate the amazing dysfunctions of the U.S. corporate tax code. The corporate tax raises $250 billion per year, or 1.5% of GDP, which is one of the lowest tax revenues in the world. And, the U.S. has the highest corporate tax rate in the world. … An inversion occurs when an American company merges with a smaller company in a lower-tax jurisdiction such as Ireland. The deal is structured so the smaller company acquires the larger American company. Operations and management often remain in the U.S., but the legal headquarters is changed to the lower-tax jurisdiction. By inverting, the company is no longer legally U.S.-based and thus is not required to pay U.S. taxes on profits earned abroad. … The administration’s response is simple: Blame everyone else for the dysfunctional tax code and then outlaw inversions retroactively. … [T]he Obama proposal is pure demagoguery and would encourage multinational companies to avoid the U.S. altogether, meaning even fewer U.S. jobs. The Obama plan is like seeing a raging fire in a building and locking all the doors shut so no one can get out.”
Posted on: Mon, 11 Aug 2014 16:59:24 +0000
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