“Inverted corporations take advantage of all the things American tax dollars provide—from tax credits for research and development, investments in transportation infrastructure, and strong patent and copyright protections, to profiting from taxpayer-supported programs like Medicare and the Veterans Health Administration. Yet, these companies claim to be foreign corporations when it’s time to pay their tax bill—denying the United States billions of dollars in tax revenue and thereby increasing the tax burden on other U.S. taxpayers.”
In a letter to President Obama, three Senate Democrats have urged the President to use executive action to end a growing trend in corporate inversions motivated by tax considerations. Senate Assistant Majority Leader Dick Durban (D-IL), Senate Assistant Majority Leader, and Senate Banking Committee members, Jack Reed (D-RI) and Elizabeth Warren (D-MA), called him to use necessary executive authority to end tax breaks for companies that enter into mergers that move their headquarters overseas to avoid paying U.S. taxes.
While the Senators say they will still work for a legislative solution to the growing corporate inversion trend, they say swifter action is necessary.
We have introduced S. 2360, the Stop Corporate Inversions Act, and are working with our colleagues in Congress to pass legislation as soon possible to eliminate tax breaks for inverted corporations, including closing the inversion acquisition loophole. However, our efforts should not preclude executive action to prevent corporate inversions. The coming flood of corporate inversions justifies immediate executive action.