There is more and more interest in the stories about corporations “renouncing” their U.S. citizenship in order to evade paying taxes for the courts, roads, military, schools, and other public services that have made them prosperous. They are using something called “inversions” to do this, meaning they merge with or just buy a foreign company and pretend they are a subsidiary of that company. Their headquarters, executives, operations, employees, customers and everything else stay where they are. They still use our public services. Their employees still go to our schools. The only thing that changes is the lower taxes they pay.
This is happening because of mistakes and “loopholes” in our tax laws. These could be easily remedied but Republicans are obstructing all efforts to fix the problem.
President Obama on Thursday spoke about the need to fix this.
Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes. He spoke of “economic patriotism.”
AUDIENCE: Booo –
THE PRESIDENT: Well, hold on a second. I want you — I say fleeing the country, but they’re not actually do that. They’re not actually going anywhere. They’re keeping most of their business here. They’re keeping usually their headquarters here in the U.S. They don’t want to give up the best universities and the best military, and all the advantages of operating in the United States. They just don’t want to pay for it. So they’re technically renouncing their U.S. citizenship. They’re declaring they’re based someplace else even though most of their operations are here. Some people are calling these companies “corporate deserters.”
… That’s why, in my budget earlier this year, I proposed closing this unpatriotic tax loophole for good. Democrats in Congress have advanced a proposal that would do the same thing. A couple of Republicans have said they want to address it, too. Let’s everybody get together, Democrats and Republicans, to deter companies from rushing to take advantage of this tax loophole. And let’s make sure that we’re rewarding companies that are investing and paying their fair share here in the United States.
And this is not a partisan issue. Just 10 years ago, a Republican-led Congress cracked down on corporations moving to offshore tax havens like the Cayman Islands. We should do it again.
I’m not interested in punishing these companies. But I am interested in economic patriotism. Instead of doubling down on top-down economics, I want an economic patriotism that says we rise or fall together, as one nation, and as one people. (Applause.)
The “tax fairness coalition” called Americans for Tax Fairness released a statement backing the President’s call:
Tax Fairness Coalition Backs Call by President to Stop Corporate Inversions
WASHINGTON – Frank Clemente, Executive Director of Americans for Tax Fairness, released the following statement in response to President Obama’s comments on “economic patriotism” and corporate inversions in his speech today in Los Angeles.
“President Obama today urged all Americans to support an ‘economic patriotism’ agenda. The first and easiest step Congress can take to achieve that is to halt any more corporate inversions. Companies should not be able to desert America for tax havens to avoid paying their fair share of taxes. Walgreens is expected to announce as soon as August 4 what kind of company it is going to be in the future – an economic patriot that stays incorporated in America or a Benedict Arnold traitor that flees to a tax haven.”
Speaking of Frank Clemente, I joined him on the “Virtually Speaking with Jay Ackroyd” show Thursday evening to talk about this issue. We got into the details of how this is done, how much some of these corporations owe, the damage it does to the country and some of the solutions that are on the table.
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