Inversions

Corporate inversions occur when a business in a high tax country gets bought out by a company in a low tax country and the bought-out company moves its own headquarters to the buyer’s country. This is occurring increasingly with American companies laboring under US’ usurious corporate tax code.

The Treasury Department—the Obama administration—demurs from these, and it has written, and it is writing more, rules to interfere with such moves. For instance,

The government still is working on tighter rules for a corporate tax-avoidance technique known as earnings-stripping and could release them in the coming months.

And this one:

One aspect of the rules, which limit companies’ ability to transfer foreign operations to a new foreign parent company, will apply to future transactions by all companies that completed inversions since Sept 22, 2014….

Such moves are things that a Progressive, Democratic Party-dominated government would love, but they’re anathema to liberty—interfering with the private decisions of American business owners as they do—and to a free market, which at the core of liberty.

The correct move, although it would restrict the personal power of government officials and their cronies and lobbyists, is to lower the corporate tax rates to globally competitive levels so that inversions of American companies become unattractive and so that other countries’ businessmen want to come here. With the job opportunities for Americans such additional businesses would represent.

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