Dems urge more action on inversions
Democratic lawmakers urged the Obama administration to take a more aggressive stance toward the offshore tax deals known as inversions.
Seven congressional Democrats in all called on Treasury Secretary Jack Lew to take executive action against a technique known as earnings stripping that makes the offshore deals more attractive.
They also suggested that the administration essentially shame companies by publicly listing those that have reincorporated abroad to slash their tax bills, and to close loopholes that still allow inverted companies to get federal contracts.
“While we recognize that Congress can, and should, do more to strengthen our laws, we encourage you to take these executive actions to curb the manipulation of our laws and regulations and prevent the further erosion of our tax base,” the lawmakers wrote.
Reps. Rosa DeLauro (Conn.), Lloyd Doggett (Texas) and Sandy Levin (Mich.) signed the letter, as did Sens. Dick Durbin (Ill.), Jack Reed (R.I.), Elizabeth Warren (Mass.) and Sheldon Whitehouse (R.I.).
They specifically mentioned three companies – Terex, CF Industries Holdings and Coca Cola Enterprises – that recently inverted as proof that Treasury needed to take further action.
Lew announced executive actions almost a year ago to make the offshore deals less attractive, and said the department would consider further action.
Lawmakers have long urged Treasury to take a look at earnings stripping, in which a foreign company can get tax breaks for heaping debt on American subsidiaries. Under U.S. law, companies can deduct the interest paid on debt.
