Archive for the ‘International Tax’ Category

Could The U.S. Fix Taxation of Multinational Corporations With A Sales-Based Formula?

Corporate inversions have been the topic of the summer for tax wonks (beats jellyfish and beach traffic, I suppose), but the issue is a classic bit of Washington misdirection. Instead of focusing on the real disease—an increasingly dysfunctional corporate income tax—we are obsessing over a symptom—firms such as Burger King engaging in self-help reform by […]

Is Treasury About to Curb Tax Inversions on Its Own?

The Treasury Department put out the word that Secretary Jack Lew is considering regulatory curbs on corporate tax inversions, a step that may be intended to increase pressure on Congress to act once it returns from its summer recess in September. The matter of how much authority Treasury has to limit inversions has generated its […]

Can Obama slow corporate inversions? Yes he can.

Politicians can debate whether corporate tax inversions are “unpatriotic” or simply a legitimate technique to reduce taxes–and commentators can argue over whether anything should be done to stop them. Experts also disagree about whether President Obama and his Treasury Secretary have the legal authority to write new rules to discourage inversions. In my view, on this last […]

Are Tax Inversions Really Unpatriotic?

President Obama and many congressional Democrats argue that U.S.-based multinational firms are being unpatriotic by moving their corporate addresses overseas in order to reduce their taxes. Obama even implied they are “corporate deserters.” These are powerful, emotionally-charged allegations. But are they fair? Is it unpatriotic to maximize tax savings? After all, companies and individuals do […]

The Bring Jobs Home Act Won’t

The Bring Jobs Home Act is a classic message bill. Its Democratic sponsors have no interest in making it law, they merely see it as a way to boost the party’s Senate candidates in part by forcing Republicans to vote against something that sounds like a good idea. After all, who could be against bringing […]

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 inversions—where U.S. based multinationals merge with foreign firms to lower their tax bill– the more firms race to complete the deals while they can. The more deals, the more pressure on Congress to ban them. […]

The Tax-Shopping Backstory of the Medtronic-Covidien Inversion

How can a company headquartered in Minneapolis merge with a competitor run out of Mansfield, Massachusetts in order to pay taxes in Ireland?  It’s just another day in corporate inversion-land, where an opportunity to cut taxes is once again driving key business decisions. This time, the buyer is Minnesota-based medical device maker Medtronic Inc. Its […]

Did Multinationals Use a Foreign Earnings Tax Holiday To Burnish Their Financials Rather Than Reduce Taxes?

We’ve known for years that the 2004 repatriation tax holiday did little to boost domestic investment or create U.S. jobs, as promised by its backers. Now we are learning that many multinational corporations were not even interested in using the temporary holiday to cut their taxes. Instead, according to a new study, it may have been little more […]

Tax Chauvinism: Who Cares Where a Firm is Incorporated?

Following the recent offer by U.S drugmaker Pfizer to acquire British pharmaceutical firm AstraZeneca, congressional Democrats are proposing new limits on the ability of U.S.-based firms to establish foreign residence as a way to cut their U.S. corporate tax bill. Even before this latest flap, the Obama Administration proposed curbs on this practice, known as an […]

Are Multinationals Getting Tired of Waiting for Corporate Tax Reform?

Is it possible that U.S.-based multinationals are getting tired of waiting for Congress to enact corporate tax reform? Seeking cash for domestic acquisitions, some of the nation’s best-known firms are starting to bring back their foreign earnings. Some are finding ways to avoid paying tax at all on that income. Others are so anxious to […]