A group of nearly a dozen House Democrats have joined together to introduce a bill that would tighten one of corporate America’s favorite tax dodges.
The legislation is called the Stop Corporate Inversions Act, and it is designed to address the problem of corporations buying a smaller foreign business and moving their tax domicile overseas.
In a statement, House Democrats explained why this change is needed in the law, “Under current law, a corporate inversion will not be respected for U.S. tax purposes if 80 percent or more of the new combined corporation (incorporated offshore) is owned by historic shareholders of the U.S. corporation. The bill would make it harder for U.S. companies to invert by reducing this threshold from 80 percent or more to more than 50 percent. This would effectively require U.S. companies to merge with foreign companies that are roughly equal or larger in size in order to move their location for tax purposes outside the United States and, thereby, escape U.S. tax.”
House Ways and Means Committee ranking member Rep. Sander Levin (D-MI) said, “Corporate inversions are a growing problem, costing the U.S. tax base billions of dollars and undermining vital domestic investments. This egregious practice requires immediate action. This legislation would stop American companies from avoiding U.S. taxes simply by purchasing a smaller foreign company and moving their tax home offshore.”
“This bill is about fairness,” said Rep. Danny Davis (D-IL) said. “At its heart it says that America should not have two sets of rules: one for ordinary folks and one for those with armies of lawyers who can skirt and bend the law to avoid paying their fair share of taxes. This is a notion so fundamental to our democracy it seems it should be self-evident. The existence of the two sets of rules helped bring on the Great Recession that most of us are still struggling to recover from. This bill is not a cure-all but it is a common sense response to a very real and glaring inequity in our tax code.”
Remember this bill the next time that John Boehner or any other House Republican stands before the cameras and tells the country that we can’t afford to extend unemployment benefits, jobs bills, or better care for our veterans.
The reason why we can’t “afford” spending on infrastructure and education is that House Republicans are letting giant American corporations avoid paying millions of dollars in taxes.
If corporations are people, some of the biggest members of the corporate community are sleazy deadbeats. What the House Democrats proposed today is the sort of legislation that the country could look forward to if Democrats controlled Congress.
The issue isn’t about screwing corporations. It’s about getting deadbeats to pay their fair share. Regular folks have carried the load for too long. It is time for the free ride to end, and for wealthy corporations to stop dodging their taxes.
Mr. Easley is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association