Obama Wants to Retroactively Prevent Foreign Corporate Mergers

Discussion in 'News / Current Events' started by InTheLight, Jul 17, 2014.

  1. InTheLight

    InTheLight
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    It's become common practice of late, especially among health care related companies, to plan mergers with foreign corporate companies, then move their HQ's to these countries to avoid high US corporate taxes and/or the new ObamaCare tax on medical devices. A prime example of this is Minneapolis based medical device manufacturer Medtronic.

    Medtronic decided to merge with Ireland based Covidien in a $43 billion deal recently announced. Medtronic has since become the poster child for these sorts of corporate mergers, known as tax inversion mergers. The corporate tax rate in the U.S. is 35%; in Ireland it is 12.5%. Yes, Medtronic can find deductions and loopholes to reduce the rate from 35% but it can't get near the 12.5% rate in Ireland.

    So, what is the Obama administration's response? Pass a law to restrict these sort of foreign mergers for tax benefits AND MAKE IT RETROACTIVE. Basically, it is saying to Medtronic--we are going to overturn your exercise in free trade.

    http://www.startribune.com/politics/national/267437771.html?page=1&c=y
     
  2. thisnumbersdisconnected

    thisnumbersdisconnected
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    So the Constitutional law "professor" and his Democrat puppets in Congress have never heard of Ex Post Facto? Why am I not surprised.

    And you should know, I deliberately left the "?" out of that last sentence.
     
    #2 thisnumbersdisconnected, Jul 17, 2014
    Last edited by a moderator: Jul 17, 2014
  3. Don

    Don
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    Won't survive a judicial challenge. But it'll cost money and time in legal wrangling....

    Perhaps if the government loosened the taxes on corporations, the corporations wouldn't be looking for solutions that take jobs and revenue away from the U.S.?....
     
  4. just-want-peace

    just-want-peace
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    But, but, but that would NEVER aid the demolishing of the economy allowing the gov't to intervene to "save the day"!!:BangHead::BangHead::BangHead:

    (See the red portion of my sig line!!)
     
  5. carpro

    carpro
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    No mention of the fact that this was a logical and predictable reaction of companies to bad legislation. However...

    Obama will never get it through Congress.

    Could we have another illegal Executive Order in the offing?
     
  6. InTheLight

    InTheLight
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    Updated, 8:16 a.m. |
    The pharmaceutical giant AbbVie agreed on Friday to buy its European rival Shire for around $54 billion in the biggest takeover deal so far this year.

    If completed, the union would create one of the 50 largest companies in the world. With a market value of more than $137 billion, the enlarged AbbVie would be worth more than the likes of Boeing, McDonald’s and Cisco.

    The takeover will allow AbbVie, based near Chicago, to reincorporate in Britain, allowing the United States company to reduce its overall tax bill. The company said Friday that it expected that the transaction would lower its effective tax rate to 13 percent by 2016 from 22.6 percent in 2013 last year.

    The deal would be the largest-ever inversion: Abbie, a recent spinoff of Abbott Laboratories, would be reincorporated on the small island of Jersey, in the English Channel. Shire, based in Dublin, is already incorporated in Jersey. A wave of American companies — primarily in health care — have sought to do similar deals that would allow them to reincorporate in countries like Britain, Ireland or the Netherlands that have lower corporate rates than in the United States.

    http://dealbook.nytimes.com/2014/07/18/abbvie-reaches-deal-to-buy-european-drug-maker-shire/
     

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