Workers & Economic Inequality

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Not enough taxation and too much representation

TCF fellow, Amy Dean has written an article for AlJazeera America about corporate tax inversions.

In Congress one of the hot issues is what, if anything, to do about corporate inversion, an increasingly popular tax avoidance strategy in which a U.S. corporation acquires a foreign company in order to move its headquarters abroad and pay a lower tax rate on its foreign earnings.

Since 2013, at least 14 U.S. corporations have relocated their headquarters abroad, according to Reuters, with 10 making the move this year alone. The most recent example is Burger King, which announced in late August that it would merge with the Canadian chain Tim Hortons and move its headquarters to Canada, which has a lower corporate tax rate than the U.S. does. That month the U.S. fruit company Chiquita Banana decided to move its headquarters to Ireland. The pharmaceutical company AbbVie moved abroad in June, and Pfizer is contemplating leaving behind its U.S. status.

Read the full article.

Tags: taxes, tax inversions, multinationals, corporate taxes, corporate tax, corporate profit, burger king

Crackdown on Apple in Ireland Opens Front on Tax Avoidance War

TCF fellow Edward D. Kleinbard has been quoted in an article about Apple and tax avoidance on Bloomberg.

The European Commission’s crackdown on the deal between Irish tax authorities and Apple Inc. (AAPL) marks an expansion in the growing global war on tax avoidance by multinational companies. Governments that enable it are now a target.

Yesterday, the European Commission said the Irish tax authorities failed to conform to international guidelines when they “reverse engineered” an agreement with Apple to determine the company’s bills. The Commission also found problems with Luxembourg’s treatment of Fiat Finance and Trade Ltd, and a Commission review of Starbucks Corp.’s (SBUX) taxable profits in the Netherlands is expected shortly.

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Tags: taxes, tax inversions, tax avoidance, ireland, corporate taxes, corporate tax, corporate profit, apple

Battle on Capitol Hill over tax inversions

TCF fellow, Edward D. Kleinbard has been quoted in a Times Union article about corporate tax inversions.

U.S. Sen. Chuck Schumer and others on Capitol Hill are mounting an assault on corporate America's rising reliance on inversions, the minnow-swallows-whale merger tactic in which U.S. corporations avoid U.S. taxes by relocating overseas.

Typically in an inversion, a larger U.S. corporation merges with a smaller European counterpart and moves its legal business address to Dublin or London or Switzerland. More often than not, the company maintains its U.S. base and does business as normal.

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Tags: taxes, tax system, tax inversions, corporate taxes, corporate tax, corporate profit

Inversion delusion

TCF fellow, Edward D. Kleinbard has been quoted in an article about corporate tax inversions in the Rutland Herald.

On Monday, the Tax Policy Center in Washington held a panel discussion on the subject of “corporate inversions” — the practice of taking over a small company in someplace like Ireland or the Netherlands, and then using that takeover to “relocate” to the foreign country for tax reasons. One of the panelists was John Samuels, chief tax lawyer for General Electric.

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Tags: taxes, tax system, tax inversions, corporate taxes, corporate tax, corporate profit

Lew Says Administration Close to Decision On Inversions; Others Debating Possibilities

TCF fellow, Edward D. Kleinbard has been quoted in an article about corporate tax inversion on Bloomberg BNA.

The extent of any pending executive action to limit inversions remains uncertain despite Treasury Secretary Jacob J. Lew's pledge to decide soon.

He has yet to tip his hand on how the department could address the recent rise in tax-driven corporate mergers, aside from backing retroactive changes favored by congressional Democrats.

Debate around that and other options continues as potential administrative changes are considered along with legislative possibilities, though Senate Finance Committee Chairman Ron Wyden (D-Ore.) and ranking member Orrin Hatch (R-Utah) haven't found common ground to date.

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Tags: tax system, tax rules, tax inversions, corporate taxes, corporate tax, corporate profit

Burger King’s claim that move won’t save taxes draws skepticism

TCF fellow, Edward D. Kleinbard has been quoted in a Sun Sentinel article about Burger King movings its headquarters to Canada.

Daniel Schwartz, chief executive officer of Burger King Worldwide, said in August that he doesn't expect "meaningful tax savings" when the company adopts a new legal address in Canada through the purchase of a doughnut chain there.

That may have blunted criticism from U.S. politicians who are calling the address change a tax dodge. But Schwartz's statement is hard to square with the reality of the countries' tax laws, according to experts on both sides of the border.

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Tags: taxes, taxation, tax inversions, corporate taxes, corporate tax, corporate profit

 

Workers & Economic Inequality

Workers & Economic Inequality

In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.

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