FOX "Fox News Sunday with Chris Wallace" - Transcript: Corporate Inversions

Interview

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WALLACE: House Ways and Means. Let me bring in Senator Coons. Terms like unpatriotic, corporate deserter are powerful, but if you are the CEO of a company, and someone comes in and says, hey, this is the law, and you can save hundreds of millions of dollars and give that back to your shareholders, what is wrong with that?

SEN. CHRIS COONS, D-DEL., BUDGET COMMITTEE: Well, they're following their fiduciary duty to advance shareholders' interests, but they are not following their duty as Americans, as folks to contribute to carrying their costs of the burdens of our country. You're an American-headquartered company in this pattern, because you're taking advantage of our intellectual property protection, our military, our schools, our universities, our research, and I do have a problem, and I think most Americans do, with the idea that we have a corporate tax code that's riddled with loopholes, that's badly out of date and that's unfair. So, I agree with John that the real solution here is to move to comprehensive tax reform so we have a more competitive tax system. But frankly, like the president, I have a problem with a mostly American company using a tax loophole to avoid paying their fair share.

WALLACE: But let's talk about that corporate tax code because CEOs will say fine, we would love to stay in this country, but I have to pay a 35 percent top corporate tax rate here and a 12.5 percent top corporate tax rate, for instance, in Ireland. And you guys in Congress have talked about it for years and have done nothing.

COONS: Well, first, let's give credit where credit's due. The president in the State of the Union this year called for reducing the corporate tax rate to 28 percent. And engaging in comprehensive reform.

WALLACE: (INAUDIBLE)

COONS: And we did get real and strong proposals from Chairman Camp and from Chairman Baucus. We do need to come together. Congress has a responsibility to deal with this issue. In the long-term in the next year or two, and in the short term, I hope we will take bipartisan action to deal with inversions, because you said in the introduction, it could cost us $18 billion to $20 billion over the next decade. We're losing corporate headquarters, we're losing jobs and we're losing resources.

WALLACE: Governor Engler, Democrats say they're willing to cut corporate taxes but Republicans insist if you're going to do that, you also need to cut individual tax rates because so many of these companies file as individuals, the smaller companies, not in the corporate tax rate. Are you really going to hold up corporate tax reform to get the individual tax rate lower? ENGLER: I think the business tax reform comprehensively without getting into individual rates. I don't ...

WALLACE: Even for companies?

ENGLER: Even for companies. I think you can approach this in a comprehensive way. That's what Chairman Camp attempted to do. He actually had a 25 percent rate for manufacturing companies, whether they were incorporated or not. I think that this is an opportunity for the president to lead. I think the call maybe ought to be to Secretary Lew. Look, let's get Chairman Camp and Chairman Wyden, the respective relevant chairs in a room over August and September. We can have something ready to go when we get back. Let's not spend the time at Treasury trying to come up with little fixes when we've got an opportunity to prove the competitors of the United States.

WALLACE: Let's talk about that because in the absence of any agreement on legislation, President Obama is in this area as well, talking about possibly taking executive action to stop tax inversions. What makes this particularly interesting is just last month, Treasury Secretary Lew said that was not possible. Take a look.

(BEGIN VIDEO CLIP)

JACK LEW, TREASURY SECRETARY: We do not believe we have the authority to address this inversion question through administrative action. If we did, we would be doing more.

(END VIDEO CLIP)

WALLACE: Senator Coons, that was just a few weeks ago. What's changed?

COONS: Well, the larger point here is that we should act in Congress. That the president would prefer Congress to act and we should.

WALLACE: No, I know. I'm not asking you about -- why was it that in mid-July that the Treasury Secretary said he didn't have the power for executive action to stop inversions, but now the president says they do?

COONS: There are some technical areas where Treasury can continue to apply the impact of the 2004 law. Let me be clear on this point. In 2004, a Republican Congress and a Republican president joined with Democrats in the House and Senate to pass a law to address inversions as a problem. When it was first emerging. There are provisions in that law that Treasury is looking hard at. They would prefer that Congress acts in a bipartisan way as they did a decade ago to stem the job loss and stem the revenue loss, but in the absence of congressional action, I do think Treasury will step up and do something to stop the bleeding.

WALLACE: Let me just ask you, as we are running out of time. Governor Engler, if President Obama and Treasury, if they take executive action, will you try to stop them? And you're a former politician, former governor. Isn't this a good political issue for the Democrats because once again they can say we're on the side of the little guy, we're on the side of the Americans, and Republicans are on the side of the big corporations trying to save money by pretending they're Irish or Swiss?

ENGLER: I think that one thing all Americans are tired of is, all the political games in Washington. They want a solution. I don't' know. I think the clip you showed from the Secretary Treasury, I think it's very hard, they can tweak, but why spend the time doing that, why not fix the problem. And, you know, it's not a little problem. Our rate is 35 percent. Now, the whole inversion doesn't change the U.S. taxes on U.S. activities, and it doesn't change the foreign tax on the foreign activities. It only changes that when the company wants to bring the money home. And so, that does impact. And we would suggest that we ought to put the focus on growth here, comprehensive plan, we are going to have to write regulatory energy policy, all that stuff, too, but this is the most important thing you can do if you want U.S. growth to pick up and accelerate, fix an outmoded tax code, modernize it.

WALLACE: Governor Engler, Senator Coons, we want to thank you both for coming in today. Obviously, this is going to be a hot issue and it will be interesting to see what the president does on his own and how much he's able to accomplish in this area of tax inversion. Thank you both, gentlemen.

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