Treasury Secretary Jack Lew has urged Congress to pass legislation that would stop inversions, which are used by some multinationals to avoid U.S. taxes by incorporating in other countries. He warned in a speech that many more U.S. companies are planning this strategy, even as the pace of inversions has slowed in recent weeks. Lew also said he would decide in the near term what regulatory actions the Obama administration can take on its own. The preference, though, is for Congress to pass a law, he said.
This is an exercise in ignorance for the administration. In the first place it will be easy to get around. Just have the American company acquired by a foreign company you have already taken control of, or subsequently will take control of. The Brazilian trio used this technique when they sold Burger King to a Canadian company they already had control over. They first used it a few years ago when they sold their Brazilian beer company to a Swiss beer company that they subsequently took control over.
In the second place, the only way to effectively counter the Abandon America movement that has individual Americans giving up their citizenship and American companies inverting into foreign companies is to cut taxes. High taxes is the problem. But the administration thinks it’s all powerful, imprisoning people and businesses that want to leave and forcing them to pay draconian taxes to fuel their socialist machine. This is beginning to look like the Jews fleeing Nazi Germany before the “Great Eradication Solution” began.
They will never cut taxes. Cutting taxes is more foreign to the average Congressman or Senator than the new foreign corporate owners of inverted companies.
C’est la vie
Live and learn.