It’s no secret the U.S. Chamber is not a fan of the Obama Administration’s new tax “guidance” aimed at stemming the recent trend of corporate inversions.
But just in case some folks still haven’t heard two top Chamber officials took their message to major media outlets.
First up, U.S. Chamber Chief Tax Policy Counsel Caroline Harris joins Larry Kudlow and a boisterous panel on CNBC:
Harris: This goes after a sort of third-level of benefit that comes with inversions, which is the attempt to repatriate earnings without triggering U.S. tax. And Treasury has touch on these and what they’ve done is, what you said, further locked out cash coming to the U.S., and they’ve added complexity to the code when what they really need to do is comprehensive tax reform.
Kudlow: …Here’s my big question: Doesn’t this bring in overseas foreign companies to come in and buy out American companies?
Harris: Absolutely. If we don’t reform our tax code, when we don’t lower the rate, shift to a more internationally competitive system, we absolutely let American companies become sitting ducks for foreign takeovers.
Fireworks really flew when U.S. Chamber Chief Economist Marty Regalia was interviewed by MarketWatch.
MarketWatch: The chamber has blasted the White House efforts to crack down on corporate inversions via changes in tax rules. Why is that approach detrimental?
Martin Regalia: We believe the way to address the inversion issue is to reform the tax code. Put our companies on a compatible basis with their foreign investors and lower corporate rates in the U.S. so they are more in line with what companies face around the world. What that does is remove the incentive and actually helps to attract foreign capital.
Corporate inversions occur because people are trying to get out from under the U.S. high statutory tax rate. They are trying to get a territorial system rather than a worldwide system. Those are the two big drivers.
The administration didn’t really affect the ability of companies to invert. What they did was go after this little piece of accumulated cash abroad and said, ‘We don’t want you to bring it back.’ That doesn’t help the U.S. economy. It doesn’t raise any additional tax revenue. All it is is kind of petulant and punitive. To sell that as addressing the inversion problem — when you read the fine print, they admit it won’t affect inversions.
Read our previous posts on inversions here, here and here.