Treasury Secretary Jacob Lew says a trend of U.S. companies reorganizing as foreign firms serves “to hollow out the U.S. corporate income tax base.” Above, Lew at a forum this month in Washington. (Saul Loeb / AFP/Getty Images)
On July 17, 2014, Jim Puzzanghera writes in the Los Angeles Times:
Calling for “a new sense of economic patriotism,” a top Obama administration official urged Congress to take immediate action to stop U.S. companies from reorganizing as foreign firms to avoid paying taxes.
The maneuver, known as tax inversion, serves “to hollow out the U.S. corporate income tax base,” Treasury Secretary Jacob J. Lew wrote in a letter Tuesday to congressional leaders that was obtained by the Times.
“What we need as a nation is a new sense of economic patriotism, where we all rise or fall together,” Lew wrote to the top Democrats and Republicans on the congressional tax-writing committees.
“We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes,” he said.
Some lawmakers have pushed to restrict the practice, in which a U.S.-based multinational company restructures so the parent company is a foreign corporation.
The maneuver allows firms to avoid paying corporate taxes in the U.S., which has the highest rate among major developed nations.
