WH won't rule out action on corporate inversions

The White House won't rule out moving unilaterally to address companies shifting operations overseas to avoid U.S. taxes, a spokesman said Tuesday.

White House press secretary Josh Earnest said he would not "render any judgment about the legality of any option" the administration could take against companies that engage in corporate “inversions.”

"I’m not in a position to rule either in or out at this point," Earnest said.

Earlier Tuesday, three top Senate Democrats asked President Obama to examine how to prevent inversions, in which U.S. companies purchase smaller foreign companies and then combine operations outside the country to avoid paying U.S. taxes.

“Corporations that renounce their U.S. corporate citizenship should not be able to reap all the benefits that American tax dollars provide,” Sens. Dick DurbinRichard (Dick) Joseph DurbinAmerica’s waning commitment to the promise of the First Amendment Senate rejects Trump immigration plan What to watch for in the Senate immigration votes MORE (Ill.), Jack ReedJohn (Jack) Raymond ReedFBI chief: Trump hasn't specifically directed me to stop Russian meddling in midterms Live coverage: FBI director testifies to Senate Intelligence Committee Senate Dems demand answers on cost of Trump's military parade proposal MORE (R.I.) and Elizabeth WarrenElizabeth Ann WarrenTrump's SEC may negate investors' ability to fight securities fraud Schatz's ignorance of our Anglo-American legal heritage illustrates problem with government Dems ponder gender politics of 2020 nominee MORE (Mass.) wrote in a letter to Obama.

“We urge you to use your authority to stand up for American companies which are proud to be part of our nation and reduce U.S. incentives for others corporations which would abandon their responsibilities to their country for a nod of approval from Wall Street,” the senators added.

The White House said it would be best for Congress to pass legislation closing the tax loophole.

"It is our view that Congress should take the necessary step to address this loophole," Earnest said.

The White House spokesman also noted that Congress was able to close a loophole related to corporate inversions in 2004 with bipartisan support, despite election-year politics and a Republican president.

Earnest said he hoped the legislation would pass "quickly" and that it should be retroactive, affecting U.S. companies that have already shifted — on paper — their operations overseas.

"We should not allow companies to sort of cynically capitalize on the fact that Congress is rather slow moving these days," Earnest said.

The White House spokesman said that the administration "had not laid out a specific deadline" for Congress to act before executive action is considered.

Even though Earnest declined to close the door on executive action, Treasury Secretary Jack LewJacob (Jack) Joseph LewBig tech lobbying groups push Treasury to speak out on EU tax proposal Overnight Finance: Hatch announces retirement from Senate | What you can expect from new tax code | Five ways finance laws could change in 2018 | Peter Thiel bets big on bitcoin Ex-Obama Treasury secretary: Tax cuts 'leaving us broke' MORE said in a CNBC interview last month that he had studied “obscure provisions” within tax law and concluded officials don’t "have the authority to address this inversion question through administrative action."

“If we did, we would be doing more," Lew said. 

On Tuesday, a spokesman for the Treasury Department said that "the best way to address inversions would be through comprehensive business tax reform," but there may be administrative actions still available.

"Treasury is reviewing a broad range of authorities for possible administrative actions that could limit the ability of companies to engage in inversions, as well as approaches that could meaningfully reduce the tax benefits after inversions take place, to at least provide a partial fix," the spokesman said.


— Updated at 7:45 p.m.