Democrats put target on 'corporate deserters'

Democrats put target on 'corporate deserters'

By Bernie Becker - 01/20/15 01:42 PM EST

http://thehill.com/policy/finance/230063-dems-seek-new-avenues-to-fight-offshore-tax-deals

Congressional Democrats said Tuesday they would seek any and all avenues to curb offshore tax deals, kicking off a new effort to punish what they call “corporate deserters.”

Senior Democrats on both sides of the Capitol brought back legislation to make it more difficult for corporations to merge with a foreign competitor and shift their legal address abroad.

“We believe we need fairness in the tax code,” Senate Minority Whip Dick Durbin (D-Ill.) said at a news conference announcing the legislation.

Democrats introduced the legislation last year as well, at the same time President Obama and other senior officials in the party questioned the patriotism of companies like Pfizer Inc. and Walgreen Co. that looked into so-called corporate inversions.

After Congress deadlocked over the tax deals in 2014, the Treasury Department put in place new rules targeting the economic benefits for companies that reincorporate offshore. But both lawmakers and the Obama administration said tougher measures would require action from Congress.

Durbin, Sen. Jack Reed (D-R.I.), Rep. Sandy Levin (D-Mich.) and Rep. Lloyd Doggett (D-Texas) introduced legislation Tuesday that would raise almost $34 billion over a decade.

Under the bill, a merged company would still be counted as American for tax purposes unless at least 50 percent of the shareholders in the new corporation came from the foreign business. Currently, that threshold stands at 20 percent.

The Democrats introducing the measure said they were willing to discuss the measure as part of broader negotiations over tax reform. But Levin, the top Democrat on the tax-writing House Ways and Means Committee, added that he didn’t think lawmakers should wait any longer to act.

“There’s a lot of talk these days, appropriately, about middle-class squeeze,” Levin said. “I think what the middle-class wants us to do, when they pay their fair share, is to close loopholes.”

Levin’s comments underscored the economic populist message that Democrats are employing in the run-up to Obama’s State of the Union address on Tuesday. The White House has already said that the president will pitch a plan to raise capital gains taxes on the wealthy to help pay for priorities for the middle-class.

Those proposals have already fallen flat with Republicans, who say Democrats are dabbling once more in class warfare and income redistribution. Top GOP lawmakers said last year that they would discuss inversions as part of tax reform negotiations, while also insisting that only a friendlier tax climate would keep businesses from trying to flee.

With that in mind, Durbin said Tuesday that Democrats would discuss trying to force floor votes on the anti-inversion legislation. Senate Majority Leader Mitch McConnell (R-Ky.) has promised a more open floor procedure in the chamber under Republican rule.

Levin also noted that Treasury is continuing to work on regulations on the matter, targeting a process known as earnings stripping. Under that maneuver, U.S. subsidiaries of foreign companies can take a tax deduction on interest payments from loans they receive from foreign parent companies.

The current Treasury rules have already had an impact, with the pharmaceutical company AbbVie ultimately deciding against a $55 billion merger.

Even so, Democrats insisted that Washington hadn’t yet stemmed the tide against inversions, and that their push for legislation would give them a chance to wrong-foot Republicans.

“Very few, if any, Republicans came to the defense of these inverted corporations,” Durbin said about the 2014 debate. “This is hard to explain, and also impossible to defend.” 

Pfizer Inc.

Sidley Austin LLP was the lobby firm for Pfizer Inc.

Note: R. Eden Martin is counsel at Sidley Austin LLP, and the president of the Commercial Club of Chicago.

Commercial Club of Chicago, Members Directory A-Z (Past Research)

Tuesday, December 17, 2013       

http://thesteadydrip.blogspot.com/2013/12/commercial-club-of-chicago-members.html

Newton N. Minow is a member of the Commercial Club of Chicago, and a senior counsel at Sidley Austin LLP.

Michelle Obama was a lawyer at Sidley Austin LLP.        

Barack Obama was an intern at Sidley Austin LLP, and Obamacare is his signature policy initiative.

CGI Group Inc. was the Obamacare contractor that developed Healthcare.gov web site.

Donna S. Morea was the EVP for the CGI Group Inc., and a trustee at the Committee for Economic Development.

Foundation to Promote Open Society was a funder for the Committee for Economic Development, the Harlem Children's Zone, the International Rescue Committee, and the Brookings Institution (think tank).

George Soros was the chairman for the Foundation to Promote Open Society, and a benefactor at the Harlem Children's Zone.

Stephen W. Sanger is a trustee at the Committee for Economic Development, and a director           at Pfizer Inc.

Frederick W. Telling is a trustee at the Committee for Economic Development, and was a VP for Pfizer Inc.

Kenneth G. Langone is a trustee at the Harlem Children's Zone, and was a director at YUM! Brands, Inc.

Thomas C. Nelson is a director at YUM! Brands, Inc., and a trustee at the Committee for Economic Development.

Steven A. Davis was a division president for YUM! Brands, Inc., and is a director at the Walgreen Co.

George E. Rupp was a trustee at the Committee for Economic Development, and is the overseer; former president & CEO for the International Rescue Committee.

Joshua S. Weston was a trustee at the Committee for Economic Development, and is a director at the International Rescue Committee.

Timothy F. Geithner is a director at the International Rescue Committee, was the secretary at the U.S. Department of the Treasury for the Barack Obama administration, and an overseer at the International Rescue Committee.

Internal Revenue Service (IRS) is a division of the U.S. Department of the Treasury.

International Rescue Committee is a partner with the ONE Campaign.

Michelle Obama is an advocate for the ONE Campaign, and was a lawyer at Sidley Austin LLP.

Barack Obama was an intern at Sidley Austin LLP.

Sidley Austin LLP was the lobby firm for Pfizer Inc.

Sally Susman is a director at the International Rescue Committee, and the EVP for Pfizer Inc.

James D. Wolfensohn is an overseer at the International Rescue Committee, was an honorary trustee at the Brookings Institution (think tank), a director at the American Friends of Bilderberg (think tank) and a 2008 Bilderberg conference participant (think tank).

John C. Whitehead is an overseer at the International Rescue Committee, and an honorary trustee at the Brookings Institution (think tank).

Tracy R. Wolstencroft is an overseer at the International Rescue Committee, and a trustee at the Brookings Institution (think tank).

Constance J. Horner was a guest scholar at the Brookings Institution (think tank), and is a director at Pfizer Inc.

Suzanne Nora Johnson is a trustee at the Brookings Institution (think tank), and a director at Pfizer Inc.

Amy W. Schulman is a trustee at the Brookings Institution (think tank), and was an EVP & general counsel for Pfizer Inc.

Akin, Gump, Strauss, Hauer & Feld, LLP is the lobby firm for Pfizer Inc.

Vernon E. Jordan Jr. is a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP, an honorary trustee at the Brookings Institution (think tank), Valerie B. Jarrett’s great uncle, a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).

Cyrus F. Freidheim Jr. is an honorary trustee at the Brookings Institution (think tank), and a member of the Commercial Club of Chicago.

Valerie B. Jarrett is Vernon E. Jordan Jr’s great niece, the senior adviser for the Barack Obama administration, and a member of the Commercial Club of Chicago.

R. Eden Martin is the president of the Commercial Club of Chicago, and counsel at Sidley Austin LLP.

Newton N. Minow is a member of the Commercial Club of Chicago, and a senior counsel at Sidley Austin LLP.

Michelle Obama was a lawyer at Sidley Austin LLP.                    

Barack Obama was an intern at Sidley Austin LLP.

Sidley Austin LLP was the lobby firm for Pfizer Inc.