Business Leaders: Corporate Inversions Harm U.S. Tax Base

Sep 9, 2014
Press Release

Business leaders are increasingly pushing for action to curb the growing number of inversions, with CVS CEO Larry Merlo saying this month that “these tax inversions left unchecked will further erode the corporate tax base.” Recent polling has shown that more than three-quarters of Americans disapprove of inversions, with the majority wanting immediate action by Congress to halt the abuse. Yet House Republicans continue to drag their feet.

Larry Merlo, CVS Health CEO, “We are concerned that these tax inversions left unchecked will further erode the corporate tax base and make comprehensive reform that much challenging.”

Bob Iger, Walt Disney CEO, “I don't really think moving Walt Disney … outside the U.S in order to save taxes is an option, nor do I think it would be the right thing to do for the company or for this country.”

Mark Cuban, NBA Dallas Mavericks Owner: “When companies move off shore to save on taxes, you and I make up the tax shortfall elsewhere sell those stocks and they won't move.”

And numerous economists, columnists and editorial boards are calling for immediate action to stem the tide of corporate inversions:

Stephen E. Shay, former Treasury Department Deputy Assistant Secretary: “The argument of waiting for tax reform carries no weight with me at all.”

Edward Kleinbard, Professor of Law, USC Gould School: “If allowed to continue, inversions will eviscerate the U.S. domestic corporate tax base, because making a foreign company the parent of a U.S. firm opens up new tax-avoidance possibilities.”

Allan Sloan, Fortune Magazine: “If you don’t do something quickly to halt inversions, by the time you get around to dealing with them as part of corporate tax reform, the corporate tax base will have been so diminished that it will be extremely difficult for you to come up with any sort of revenue-neutral program.”

Scott Klinger, Center for Effective Government: “With the abuse of inversion rules now front-page news, and with estimates that the new wave of inversions could cost the Treasury $20 billion over the next decade, Congress is once again poised to act.”

Chye-Ching Huang, Senior Tax Policy Analyst, Center on Budget and Policy Priorities: “U.S. policymakers should first swiftly enact targeted anti-inversion legislation to protect the U.S. tax base.”

Thomas Hungerford, Economic Policy Institute: “Tax reform is not going to happen any time soon, but the tax base is eroding now.”

New York Times Editorial Board: “Until Congress actually changes the law, inversions will continue, reducing revenues and undermining the whole notion of tax fairness.”

U.S. Treasury Secretary Jack Lew: “Congress should enact legislation immediately – and make it retroactive to May 2014 – to shut down this abuse of our tax system.”

Deputy Assistant Treasury Secretary Robert Stack: “I want to emphasize the serious need for the United States to once again directly address the potential loss of federal tax revenues from corporate inversion transactions. Letting our corporate tax base erode through inversions will worsen our fiscal challenges over the coming years.”