The White House sent out a letter to the Senate Finance Committee late Tuesday, calling on Congress to consider a “new sense of economic patriotism” — code for a ban on big businesses moving headquarters overseas to save on taxes.
Treasury Secretary Jack Lew penned the letter to Chairman Ron Wyden, Oregon Democrat, requesting congressional members to set a rule against U.S.-based companies from enacting “inversion” transactions simply to change their tax domicile and save on taxes, Politico reported.
“The president has called for undertaking business tax reform as a way to improve the investment climate in the United States and to support the creation and retention of high-quality American jobs,” Mr. Lew wrote. “What we need as a nation is a new sense of economic patriotism, where we all rise or fall together. … We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”
The letter comes as U.S. drug manufacturers Abbvie and Mylan have plotted corporate charts to do just that.
Mr. Lew wants the legislation he requested to be retroactive to May, which would effectively block Abbvie and Mylan from making the move, Politico reported.
Currently, the corporate tax rate stands at 35 percent, among the highest in the world. Mr. Lew said he wants a lower rate — but that Congress should first put the stop to inversions, and then deal with the rate issue, Politico reported.
The White House push to ban inversions is supported by several top Democrats.