PLEDGE NOW
The Battle Over U.S. Corporate Tax Inversion

American companies bailing out on America. They call it inversion. Is it desertion?

This June 4, 2014 photo shows a Walgreens retail store in Boston. Walgreen Co. _ which bills itself as “America’s premier pharmacy” _ is among many companies considering combining operations with foreign businesses to trim their tax bills. (AP)

This June 4, 2014 photo shows a Walgreens retail store in Boston. Walgreen Co. _ which bills itself as “America’s premier pharmacy” _ is among many companies considering combining operations with foreign businesses to trim their tax bills. (AP)

It’s a neat trick for big American companies to avoid a heap of American taxes:  stop being American.  American corporations are bailing out of American “citizenship.”  One day they are proudly based in the USA.  The next, they’re not.  They’re suddenly Irish or Dutch or Australian or Israeli.  And paying lower taxes on the same operations.  It’s technically called “inversion.”  Last week President Obama called it desertion.  It’s a big deal. This hour On Point:  American companies, bailing out on American taxes – and what to do about it.

— Tom Ashbrook

Guests

Sen. Carl Levin (D-MI), senior U.S. Senator from Michigan. (@sencarllevin)

Andrew Ross Sorkin, financial columnist for the New York Times‘ DealBook and co-anchor of CNBC’s “Squawk Box.” Author of “Too Big To Fail.” (@andrewrsorkin)

Allan Sloan, senior editor-at-large for Fortune Magazine.

Diane Ring, professor at the Boston College Law School.

From Tom’s Reading List

Fortune: How to stop companies from deserting America before it’s too late — “Barely a day seems to pass without a corporation announcing that it plans to leave the U.S. to save taxes but wants to continue having its business, its employees, its directors, and especially its top executives benefit from our rule of law, democratic system, and the other great things that make America America. It just doesn’t want to pay its fair share for those things.”

Boston Globe: Inverters aren’t deserters — “A company that structures a merger as an inversion is not deserting America, nor is it avoiding US taxes on revenue earned in the United States. Corporations that earn profits in America pay taxes in America, no matter where their legal domicile happens to be.”

The Wall Street Journal: The Lose-Lose Tax Policy Driving Away U.S. Business — “The U.S. corporate statutory tax rate is one of the highest in the world at 35%. In addition, the U.S. has a world-wide tax system under which profits earned abroad face U.S. taxation when brought back to America. The other G-7 countries, however, all have some form of a territorial tax system that imposes little or no tax on repatriated earnings.”

Bloomberg’s list of companies using inversions

Please follow our community rules when engaging in comment discussion on this site.
ONPOINT
TODAY
May 5, 2016
Detroit teachers march outside the district headquarters, Monday, May 2, 2016, in Detroit. Detroit Public Schools transition manager Steven Rhodes says 45,628 of approximately 46,000 students were forced to miss classes Monday as 1,562 teachers called in sick. The mass sick-out has forced the district to close 94 of its 97 schools. Detroit's schools are expected to be out of cash starting July 1. The state earlier gave the district $48.7 million in emergency funding to keep it open through June 30 as the Legislature considers a $720 million restructuring plan. (AP Photo/Carlos Osorio)

Fixing Michigan- from Flint’s water crisis to failing schools in Detroit. Are state takeovers the answers or the problem?

May 5, 2016
Rob Reiner with his son, Nick. [Courtesy: Paladin]

Filmmaker, actor Rob Reiner and his son, Nick, get personal in their new film “Being Charlie,” which takes on drug addiction.

RECENT
SHOWS
May 4, 2016
Leslie Stahl with her grandchild Jordan. (Courtesy: Leslie Stahl)

Trailblazing journalist Lesley Stahl on her new book Becoming Grandma, and the joys, the science, the struggles, the evolution of being a grandparent today.

 
May 4, 2016
Republican presidential candidate Donald Trump is joined by his wife Melania, right, and daughter Ivanka, left, as he arrives for a primary night news conference, Tuesday, May 3, 2016, in New York. (AP Photo/Mary Altaffer)

Results from the 2016 Indiana primary. Does it cement two pathways to the nominations?

On Point Blog
On Point Blog
Devoured: We Are What (And How) We Eat
Tuesday, May 3, 2016

From chicken wings to kale smoothies, we look at what we eat, and how challenging it is to eat well in America.

More »
Comment
 
‘Embedded’: How Violent Gangs Are Terrorizing El Salvador
Thursday, Apr 14, 2016

NPR’s Kelly McEvers on her reporting in El Salvador for the podcast Embedded, and how gang killings brought San Salvador’s bus service to a halt.

More »
Comment
 
That Cheap Dress On Facebook? It Isn't Worth It
Monday, Apr 11, 2016

Know those shockingly cheap clothes you see advertised on Facebook? There’s a catch.

More »
Comment