Government Response to Tax Inversions

Twofold response.  

More adventures in la la land.

http://www.reuters.com/article/2014/07/22/us-congress-tax-inversions-idUSKBN0FR1RA20140722

First …

Remember TAX INVERSIONS from a couple days ago? The practice of buying a foreign company and moving your tax base to that country? So far this year, nine TAX INVERSIONS have taken place, and the government is beginning to notice. The logical response would be … “whew, we’d better cut taxes” … but that isn’t the response coming from the political class. The response is more along the lines of … “immediate action is needed … we have to put a stop to this … double up your fists, get your guns, we’re gonna bust some heads.”

The fact that taxes are so high they’re driving business away, doesn’t even enter their mind. Neither does it enter their mind that the ONLY way to solve that is to CUT TAXES. If we have the most expensive taxes in the world, everyone will leave eventually. Outlawing TAX INVERSIONS will not solve the problem. Google, Apple, Amazon, Caterpillar, etc. found other ways to do the same thing. There is always another way. Once a company starts looking for ways to save taxes, they will find ways. If that’s illegal, they’ll leave. Stopping TAX INVERSIONS will not stop the flood of companies abandoning the United States. You can only do that with a tax cut.

Second …

Orin Hatch’s response to TAX INVERSIONS is to REFORM TAXES.

This is another danger sign.
Here are some basic definitions to help you understand government speak about taxes.
CUT TAXES – means to CUT TAXES.
TAX HIKE – means to HIKE TAXES.
TAX REFORM – this is tricky … to the person hearing the phrase, it means CUT TAXES … but to the person saying it, it means INCREASE TAXES.
TAX REFORM is just a tricky way of saying TAX INCREASE.

As I said on my earlier post … will the last person out please turn off the lights?