Econ Comments & Analysis
Market Watch | How to stop corporations from fleeing the U.S. tax laws
Instead of a U.S. company owning a foreign subsidiary, now a foreign-based company owns the U.S. company. (For this reason, this type of transaction has been called an inversion.) Often, this restructuring does not shift the company’s production, employment, sales, or even management. And it has little to do with where the shareholders of the corporate group live. But it can substantially reduce the firm’s tax liability.
Real Clear Markets | To Keep Corporations Here, Cut Their Taxes
Just last week, U.S. drugmaker AbbVie agreed to buy a foreign firm, Shire PLC, in part to reduce its corporate tax rate, which is expected to drop from 22% to 13%. In most inversions, companies keep their headquarters' physical activities - the people, the buildings - in the U.S., as would AbbVie. Still, the practice has understandably provoked a furious backlash.
Blogs
CATO | Corporate Tax Inversions Made Simple
Numerous responses to my article in the New York Times yesterday about corporate tax inversions indicated a lack of understanding. Related articles by Levin, Johnston, and Huang similarly suggested that further enlightenment is needed.
