Senate Dem seeks more Treasury action on offshore deals

Sen. Bob Casey (D-Pa.) is pushing the Treasury Department to take a more active role in battling offshore tax deals that allow corporations to cut their tax bill.

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Casey, a member of the tax-writing Finance Committee, asked Treasury Secretary Jack Lew in a letter what the Obama administration could do to stop the cross-border deals known as inversions without legislation.

President Obama and Lew have been pressing Congress to act on a measure that would essentially bar U.S. companies from buying a smaller foreign competitor to change their address and pay less in taxes.

Casey said in his letter to Lew that he still thinks that dealing with inversions through tax reform is the best path, but the recent rash of offshore deals has him “considering the merits of short-term solutions.”

The Pennsylvania Democrat specifically pressed the department on how much revenue the U.S. is losing from inversion deals, if the administration can better enforce existing rules, and how easy it would be to skirt the new proposed rules.

“The increasing trend of corporate inversions is troubling. Companies that are genuinely headquartered in the U.S. should be responsible for paying their fair share,” Casey said in a statement.

“I’m urging the Treasury Department to look at all available steps to combat inversions so businesses that are playing by the rules can compete on a level playing field.”

Democrats also fully acknowledge that their efforts against the offshore tax deals fit with their populist economic message this election year. Lawmakers in the party have already introduced legislation to stop inversions, and to stop companies that move offshore from getting federal contracts.

Sen. Chuck Schumer (D-N.Y.) is also planning to introduce legislation that would concentrate on tax breaks that companies can continue to take after they reincorporate abroad.

Republicans generally say that any targeted proposal would be ineffective, because it doesn’t tackle the overriding problem — the high corporate tax rate in the U.S. 

A former senior Treasury official under Obama said in recent days that the administration has more executive authority than it’s using to combat the deals. But administration officials continue to press Congress for legislative action.