St. Louis Post-Dispatch - Congress paying attention to possible Monsanto-Syngenta marriage

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By: Chuck Raasch

Congress has taken notice of a potential merger between Creve-Coeur-based Monsanto and Syngenta, especially the possibility that whatever emerges could be headquartered overseas.

Some Democrats are decrying that possibility as tax avoidance. But Republicans -- and some Democrats -- say such a move is understandable given high U.S. corporate tax rates, and they are more concerned that research and other jobs not follow any headquarters relocation.

Both Missouri's senators -- Republican Roy Blunt and Democrat Claire McCaskill -- said Wednesday they believed that whatever came of the talks was not likely to cost Missouri jobs.

McCaskill said she recently received assurance from Monsanto CEO Hugh Grant of the company's ongoing commitment to St. Louis.

Blunt said he has carefully followed reports on the talks and that "over and over again (the reports say) jobs would stay in Missouri and St. Louis. I would be concerned if there is a moment when I believe that wouldn't be the case."

According to a recent Tax Foundation survey, the U.S. has the highest corporate tax rates of the globe's 34 most-advanced economies.

Both Missouri senators said the possibility of overseas headquarters for whatever emerges from the Monsanto talks with Swiss-based Syngenta pointed out the need for comprehensive tax reform. That proposition has proved to be elusive in this Republican-controlled Congress, althoughMcCaskill said Wednesday that she had received signals from the Senate Finance Committee that its members would have a bipartisan tax-reform blueprint by the end of the year.

McCaskill said that the prospect of an overseas headquarters move "is a math problem that is the result of a tax code that is punishing American workers.

"We have created a tax code where if people who run these companies just do the math, the math makes sense for them to sell to foreign companies," McCaskill said. "So what we should do is not be banging on American companies for paying attention to the math, we should be fixing the tax code."

Blunt agreed.

"My principle concern about what might happen to Monsanto or any other business in our state are the jobs," Blunt said. "The way to have a tax domicile in our country is to have better tax policies."

Rep. John Shimkus, R-Collinsville, a member of the House Energy and Commerce Committee that will soon consider legislation on the labeling of Genetically Modified Organism food produced by Monsanto and others, agreed with Blunt and McCaskill on the likelihood of job movement.

"I have been to one of their research parks and they are not going to pick up those," Shimkus said.

But he said it is reasonable for a company to headquarter abroad to avoid paying "millions of additional dollars in taxes when they have a responsibility to maximize shareholder wealth. Those who attack people for doing that really should be trying for tax reform."

Sen. Dick Durbin, D-Ill., is co-sponsor of legislation that would end such "corporate inversion" -- the movement of headquarters overseas to avoid higher U.S. taxes.

He said this week that it was "clear that Monsanto -- a company that has prospered and expanded in large part due to U.S. taxpayer-funded programs and services -- intends to reincorporate overseas as part of its proposed acquisition of Syngenta in order to avoid paying U.S. taxes."

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