5 Examples of Scandalous Tax Inversion Since Before the Panama Papers Emerged
On Tuesday, President Obama took the opportunity of the recently released Panama Papers to discuss the actions his administration is taking to combat overseas tax inversions, which he called “one of the most insidious tax loopholes out there.”
“[It’s] when big corporations acquire small companies and then change their address on paper to avoid paying their taxes at home, Obama explained.
“When I travel around the country, what stands out is that the overwhelming majority of folks work hard and play by the rules and they deserve to see their hard work rewarded,” said Obama.“They also deserving to know that big corporations aren’t playing by a different set of rules; that the wealthiest among us aren’t able to game the system. That’s why I’ve been pushing for years to eliminate some of the injustices in our tax system."
Here are five of the most controversial tax inversion scandals that took place during the current term of the Obama administration:
Energy company Johnson Controls agreed to combine with Tyco earlier this year. JC will relocate its headquarters from Milwaukee to Cork, Ireland and save at least $150 million in annual tax payments. Both Democratic candidates Hillary Clinton and Bernie Sanders have spoken out against this specific tax inversion.
“I'm not just going after Wall Street. Tax inversion is a perversion. It should be stopped,” Clinton stated in a Democratic presidential town hall.
Medtronic, the medical device maker, purchased rival Covidien for almost $43 billion in stock in June 2014. By moving its headquarters to Ireland from Minneapolis, Medtronic claimed it could free almost $14 billion in cash.
Burger King purchased the Canadian chain Tim Horton’s for $11 billion just two months later. The American fast-food company effectively became a Canadian company, paying Canadian taxes.
Global industrial heavyweight and largest tax inverter General Electric has held over $100 billion in profits outside of the U.S. since 2012. If inversion were outlawed, GE would have paid nearly $40 billion in federal income taxes that year.