Inversion conversion: Obama's hypocrisy
President Obama suddenly is upset that a growing number of U.S. businesses are using American tax laws to lower their tax liability through tax inversions. That is, domestic businesses are acquired by or merged with foreign companies and reincorporate abroad, thus paying less in taxes. Mylan Inc. of Cecil, the generic pharmaceutical giant, did just that recently.
Mr. Obama calls utilizing the law to lessen the corporate tax load (one of the highest in the world) “unpatriotic” and has vowed to intercede, without Congress if necessary and, of course, in violation of the Constitution.
But, and as Bloomberg reports, his administration expressly endorsed the practice in 2009 when it bailed out Delphi Automotive, the parts-maker that supplies the also-bailed-out General Motors. Delphi was given $1.7 billion in public money and reincorporated in England to lessen the American tax bite — with the Treasury Department's full knowledge. And that's even though its own IRS was insisting, and continues to insist (improperly, given the law), that Delphi should be taxed as an American corporation.
Putting a wet finger to populism's wind five years ago — “Save the auto industry!” — the Obama administration endorsed the practice. Five years later, that newly wetted and wind-swept finger has picked up on populism's latest pap — “Punish these tax evaders!”
So much for convictions.
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