A day after the Treasury Department released its toughest restrictions on corporate tax inversions, while threatening the Pfizer Inc.’s merger with Allergen PLC, President Obama called on Congress to strengthen the regulations with legislation.
Obama uses strong language, calls for changes in the tax inversions, tax code
Calling corporate tax inversions the “most insidious tax loopholes out there,” Obama renewed calls to Congress to do something. While Congress has repeatedly demonstrated a complete refusal to work with the president since taking over both houses, many on the Republican side have made the same calls without having to reach across the figurative aisle.
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In addition to calling for closing the inversion loophole, Obama called on Congress to lower corporate tax rate, something the Treasury Department can’t do it on its own.
“Only Congress can close [the door to inversions] for good and only Congress can make sure that all the other loopholes that are being taken advantage of are closed,” Mr. Obama said in his remarks on Tuesday.
To show the silliness behind the Republican’s argument about Obama’s perceived heavy-handedness with a pen that signs executive orders, a few were quick to criticize the president when he simply reminded Congress to do their damn jobs.
Just close the frickin’ loophole
“Even after Secretary Lew’s admission that Treasury has no authority to stop tax inversions on its own, this administration has reverted to its default stance: attempting to make law by executive action,” Rep. Charles Boustany (R., La.) said in a statement. “This proposal will do little to stop actual inversions, but will make it more difficult for foreign firms to invest in the United States. This is the wrong approach to a serious problem.”
I cant’ be the only person who sees the ridiculousness of this statement with a president asking Congress to close this loophole. But then again, as a representative, Boustany does have an election in November and in his district criticism of the president goes a long ways.
Thanking the Treasury Department for its actions given congressional negligence in acknowledging the problem but being unable to pass a law, Obama continued to explain the Treasury Departments actions on Monday.
“They effectively renounce their citizenship. They declare that they’re based somewhere else,” Mr. Obama said about companies that use the inversion loophole. “It sticks the rest of us with the tab, and it makes hardworking Americans feel like the deck is stacked against them.”
I struggle to blame companies who use a loophole that is on the books, but wouldn’t mind seeing it shut through congressional action. I doubt very much I’m alone and I’m sure numerous Republicans, I am one, agree.
Obama, through his press secretary John Ernest made it clear that the Treasury Department wasn’t targeting the Pfizer and Allergan inversion that seemed inevitable just a few months ago.
“The Treasury Department is not focused on a specific transaction, it’s focused on specific loopholes,” said Mr. Earnest. While again, staying away from mentioning specific player, Earnest pointed out that the White House would be “pleased” if any inversion fell through because of the Treasury Department’s actions.
“These regulations will make potential inverters and foreign acquirers think twice before making the leap, and those bad actors should be on notice that we intend to clamp down even further,” said Sen. Charles Schumer (D., N.Y.).