New York Times - Inversions Highlight Unfairness of the Tax Code

Op-Ed

It is neither unusual nor surprising that companies seek to lower their taxes. But in recent years, a growing number of big corporations have taken that effort to the extreme by reincorporating overseas in order to reduce or entirely avoid paying their fair share of U.S. taxes. The practice, known as a corporate inversion, involves buying a foreign corporation and setting up the combined company's tax address overseas -- even as it maintains its headquarters in the United States.

The wave of corporate inversions -- 14 reported this year alone -- threatens to undermine the U.S. tax base and our economy.

The wave of corporate inversions -- 14 reported this year alone -- threatens to undermine the U.S. tax base and our economy, placing a greater share of the burden on other companies and American taxpayers. It underscores why Americans are losing confidence in our tax system, with the majority saying it isn't fair. Ordinary Americans can't move their address overseas to avoid paying taxes.

Companies that reincorporate overseas will no doubt continue to benefit from being headquartered in the United States, with our robust financial markets, protection of intellectual property rights, support of research and development, stable communities and wealth of educated workers.

Comprehensive tax reform must produce a fairer tax code and help level the playing field for American companies and workers. But this year we have witnessed firsthand how challenging of an achievement it remains. House Republicans gave such an unwelcome response to Representative Dave Camp's proposal in February that he abandoned the effort.

The future promise of tax reform must not be used as an excuse to do nothing while more companies invert to avoid U.S. taxes. Together with other House Democrats, I introduced legislation to tighten existing rules governing inversions. The change would save the U.S. tax base nearly $20 billion over 10 years.

The issue of corporate inversions is an urgent matter that requires our collective swift response.

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