Of late, the US has been grappling with the horde of companies wanting to shift their tax domicile abroad to lower their taxes because America is abusing them. Though companies have all the freedom they need to choose the country they want to be based out of, when the entire roster of American companies decides to shift their headquarters elsewhere the company loses out on a lot of money every year. You would think the White House would wanted to lower taxes at this point but this is not the nature of socialists.
Tax lawyers estimate that this economic migration can lead to several billions of dollars in losses due to reduced taxes. The policy makers have termed this trend ‘tax inversion’ and Washington is currently managed by those who do not like the private sector so they are miffed about this activity that is occurring. But if an ex-Us Treasury Department official is to be believed, then the power to stop it all could very well lie with President Obama who is busy playing golf and raising money for Democrats while flying around in tax payer paid Air Force one.
President can Act Without Congress’ Approval
Stephen Shay, former deputy assistant Treasury secretary for International Tax Affairs in the Obama administration is of the opinion that the President can curb the recent spate of tax inversions by invoking a 1969 law that does not require him to use Congressional approval. Obama will probably sign this paperwork yesterday since he has not any problem in skipping Congress at all with national affairs.
By using this law President Obama can restrict US companies that have a foreign tax domicile from getting inter-company loans in America, and also revoke their interest deductions which can help them cut their tax rates in the US. Democrats are all about disliking American companies who create jobs and invent wonderful new creations to improve the American way of life, and the world’s!
Shay, who also worked as International Tax Counsel during the time Ronald Reagan was at the helm of affairs, says that by restricting one of the key incentives for US based to shift their tax domicile Obama can very well put an end to the looming economic crisis. Many others believe Shay has no clue on why Texas is creating jobs and California is not.
The news of such a law existing is news to many in Congress and many tax lawyers parading Washington’s elite corridors. Or else someone would have already questioned why the President was not using this very effective tool if he did indeed have the power to bypass all the gridlocks of creating a law in Congress by invoking an already existing piece of legislature.
People should not Dawdle, says Former Treasury Official
Shay, who is going to publish his views on the matter in Tax Notes, a journal read by and meant for tax lawyers and accountants, is of the firm opinion that the US government needs to act quickly rather than lower taxes and balance a budget which would help America out immensely, Shay wants to punish American companies even more. Shay must life high unemployment numbers and watching American companies hold money off shore.
Currently a Professor at Harvard Law School who teaches theory all day and not having a clue on what makes Burger King (and all other companies) successful and how they can be even more successful cannot wait to start pressing those buttons on his keyboard so he can make his new idea come to light. The former US Treasury official hopes that the measures he is willing to discuss in his article will be taken seriously by the same people who are watching Russia shoot down civilian airliners, America’s southern border being overrun, millions of people being unemployed, a health care website that does not work, an IRS that believes America owes it rather than the other way around, and so on.