Republicans rip Obama's inversion rules ahead of Tax Day

Republicans rip Obama's inversion rules ahead of Tax Day

Ahead of the tax filing deadline, congressional Republicans on Thursday took aim at the Obama administration’s actions against “corporate inversions” and stressed the need for tax reform.

Inversions are transactions in which U.S. companies reincorporate overseas for tax purposes after they merge with foreign companies. The Treasury Department last week issued temporary and proposed rules that are designed to curb the transactions.

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“The president’s answer is to go punish the companies and try and raise even more taxes instead of understanding the problem,” House Majority Whip Steve Scalise (R-La.) said at an event hosted by Americans for Tax Reform. “The reason that companies are moving out of our country is because we have the highest corporate tax rate in the world.”

Rep. Peter Roskam (R-Ill.), chairman of the House Ways and Means oversight subcommittee, said inversions are “absolutely driving the debate” about tax reform, since the tax code has become hostile and other countries have better systems.

“We’ve got a tremendous opportunity to update and modernize this code,” he said.

Rep. Charles BoustanyCharles William BoustanyMarch tariff increase would cost 934K jobs, advocacy group says Bottom Line On The Money: US adds 155k jobs in November | Unemployment holds at 3.7 percent | Wage growth strengthening | Trump signs stopgap spending bill delaying shutdown MORE (R-La.), chairman of the Ways and Means tax-policy subcommittee, said lawmakers are looking “very deeply” at how to address inversions and said that a tax system that puts U.S. companies at a disadvantage is “unacceptable.”

He said the committee is working on detailed tax-reform plans and is looking for the best political opportunity to move forward with comprehensive tax reform. That opportunity will likely be early next year, he said.

“The time is now to move forward with action and with deeds, not just simply words,” Boustany said. “We know what needs to be done. We know what steps need to be taken to simplify the tax code, reduce the level of complexity, make it fair. Because nobody thinks it’s fair today.”

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchBottom line Bottom line Trump administration backs Oracle in Supreme Court battle against Google MORE (R-Utah) said that tax reform efforts this year are “not all for nothing” despite the political environment. 

“Whether it be hearings, proposals, markups … we’re all doing our part, especially at the committee level,” he said. The efforts will help with a real tax overhaul in 2017 “when we hopefully have a willing partner in the White House,” he added.

He also mentioned that he is looking into “corporate integration,” or eliminating double taxation on corporate earnings. 

“Our approach will put a real dent on inversions. It won’t be the phony approach that the administration is using,” Hatch said. 

Later on Thursday, a group of House members touted their support for a bill that would sunset the current tax code after Dec. 31, 2019, except for Social Security and Medicare taxes. The bill would require that Congress pass new federal tax system by July 4, 2019.

The bill was introduced by Rep. Bob GoodlatteRobert (Bob) William GoodlatteUSCIS chief Cuccinelli blames Paul Ryan for immigration inaction Immigrant advocacy groups shouldn't be opposing Trump's raids Top Republican releases full transcript of Bruce Ohr interview MORE (R-Va.) and has more than 120 co-sponsors. 

Goodlatte said that Congress needs to move tax reform “to the front burner.” 

“Nothing says that more strongly than recognizing that this current tax code is a monstrosity,” he said.