Tuesday, September 23, 2014

The President Sends the IRS Into Battle against Tax Inversions

As the CEO of Hewlett-Packard, Carly Fiorina built a business powerhouse.  Unfortunately, H-P then dumped her.  This led to its soap opera era (2005-11) of revolving CEOs.  Later she ran for the U.S. Senate in California unsuccessfully.  Meg Whitman, formerly the star of eBay, stepped in as CEO from her position as chair on September 22nd, 2011 and has been trying to unrock the ship.

FoxBusiness interviewed Fiorina today on President Obama’s action on Syria, tax inversions, America's economic malaise, and fighting the spread of Ebola. Her remarks on the divide between Main Street and Wall street is spot on!

Deals that go by the ungainly name of "tax inversions" enable a company to reincorporate in a country with a a less onerous corporate tax burden.

John D. McKinnon and Damian Paletta reported in this morning's Wall Street Journal that the U.S. Treasury Department issued new regulations and, specifically, "Treasury officials took action under five sections of the U.S. tax code to make inversions harder and less profitable, removing some of the appeal that has made the transactions more common in recent years, particularly in the pharmaceutical industry."  McKinnon and Paletta further wrote, "The Treasury rules will make it harder for companies that invert to use cash accumulating abroad—a big draw in recent deals. In addition, the government has made it more difficult to complete these overseas mergers."

Money Beat explores this issue with McKinnon in this video:

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