House Dems: Keep it simple on offshore tax deals

House Democrats seeking to limit corporations’ ability to shift their address offshore for tax purposes acknowledged Tuesday that they needed to do more to stoke public outrage over the practice.

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Rep. Sandy Levin (D-Mich.), who introduced a bill to combat the practice known as inversion, and other Democrats told reporters that voters were naturally offended by efforts by companies like Pfizer, which has sought to merge with its British counterpart AstraZeneca.

But with Republicans and some Senate Finance Chairman Ron Wyden (D-Ore.) seeking to deal with inversions in tax reform, the Democrats said they needed to be sure they clearly told voters what exactly Pfizer and other companies were trying to do.

Levin said that includes trying to avoid the word inversion, a term unknown to much of the public.

“We didn’t use the word inversion very much,” Levin, the top Democrat on the tax-writing Ways and Means Committee, told reporters. “Because it’s tax avoidance. It’s tax manipulation.”

Rep. Lloyd Doggett (D-Texas) added that lawmakers needed to do more to show the similarities between Pfizer is trying to do and Eduardo Saverin, the Facebook co-founder who renounced his citizenship in 2012.

“It’s deplorable, whether it’s an individual or a corporation,” said Doggett, one of roughly 10 House Democrats to sign on to the bill. “Most people don’t know what inversion is, but they do know what renouncing citizenship is.”

The bill from the House Democrats largely mirrors the inversion legislation rolled out on Tuesday by Sen. Carl Levin (D-Mich.), the congressman’s brother, with one key exception.

Sen. Levin’s bill tries to effectively put a two-year moratorium on inversions, while the House bill takes a more permanent approach. Both measures would essentially treat merged companies as American for tax purposes unless at least half the ownership came from the offshore business.

Wyden has said the idea should be a key part of the tax reform debate. But Republicans like House Ways and Means Chairman Dave Camp (R-Mich.) and Sen. Orrin Hatch (R-Utah) say that those sorts of deals will continue as long as the U.S.’s corporate tax code remains so outdated.

Business groups like the Alliance for Competitive Taxation and the RATE Coalition struck a similar note.

That’s the challenge, House Democrats said Tuesday.

“The American public isn’t looking at inversions. But if we talk to them very clearly about tax dodging and giving up your American citizenship and not paying your fair share of taxes, the American public gets that in a nanosecond,” said Rep. Rosa DeLauro (D-Conn.). “And that’s what the focus of this all about.”