Treasury Sec’y Lew Calls for ‘Economic Patriotism’
U.S. companies are looking to move their headquarters abroad to avoid the nation’s 35 percent corporate tax rate.
Treasury Secretary Jack Lew sent a letter to Senate Finance Committee Chairman Ron Wyden on Tuesday to say that Congress should be punishing these companies. He also called for “economic patriotism.”
Read background from Politico:
In a letter to Senate Finance Committee Chairman Ron Wyden (D-Ore.), Treasury Secretary Jack Lew called for a “new sense of economic patriotism” in which U.S.-based companies are no longer allowed to do “inversion” transactions only for the purposes of changing their tax domicile.
Several such transactions have been proposed recently including by U.S. drug makers Abbvie and Mylan. Lew wants legislation to be retroactive to May to block such transactions.
He again called for full corporate tax reform to lower the top U.S. rate, which at 35 percent is higher than many other countries. But he said Congress should move to block inversions until that happens.
House Democrats have pushed for legislation limiting inversions, led by top Ways and Means Committee Democrat Sandy Levin of Michigan. Wyden, however, has been more cautious saying at times that he would prefer to tackle it with full scale tax reform, which remains a long ways off.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said we must reform the tax code. She said companies don’t want to make these changes, and many are holding out hope for tax reform.
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