These Obama Regulations Make a Strong Case for Tax Reform
Congress is pivoting to tax reform, which if done correctly, should replace a list of draconian Obama-era regulations that went to extraordinary lengths to keep American companies from leaving the U.S.
Last year, drug manufacturer Pfizers proposed merger with foreign-based Allergan was thwarted after new regulations were issued by President Barack Obamas Treasury Department, forcing Pfizer, for the second time, to abandon its attempted restructuring.
Why might U.S. companies like Pfizer want to move abroad?
One major reason is that U.S. corporate income tax rates are significantly higher than those of our major trading partners. Each year other countries lower their rates while the U.S. corporate tax rate remains stubbornly high.
High corporate taxes make U.S. business uncompetitive relative to their international counterparts. Under the burden of high taxes, they justifiably look for ways to reduce costs.
A common method is an inversion, where a U.S. business merges with a foreign competitor, locating their new headquarters in the lower tax country.
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