Bill Clinton Discusses Corporate Taxation

Bill Clinton Discusses Corporate Taxation

During an interview with CNBC, former President Bill Clinton discussed corporate taxation and the controversial practice of “inverting,” a tax move that involves merging with a company in a low-tax country to obtain foreign tax status.

Taking a stance that has been frequently espoused by conservative politicians, Clinton told CNBC’s Becky Quick that the U.S.’s high corporate tax rate will no longer work, according to Fortune Magazine. When the current corporate tax rate of 35 percent was put into effect under the Clinton administration, it was roughly equivalent to other first world nations. Now that many of these countries have lowered their corporate tax rate, many multinational companies are tempted to take advantage of lower rates abroad.

Clinton stressed that the Treasury department is simply functioning as intended in attempting to stem the tide of inversions, the news source reported. He explained that the root of the problem can only be solved via a bipartisan solution from Congress.

“America has to face the fact that we have not reformed our corporate tax laws,” Clinton told CNBC, according to The Huffington Post. “We have the highest overall corporate tax rates in the world. And we are now the only OECD country that also taxes overseas earnings on the difference between what the companies pay overseas and what they pay in America.”

The latter part of this statement refers to the “global” system of taxation used almost exclusively by the U.S. Under this system, a U.S.-based company that makes money in Ireland, for example, must first pay the Irish tax of approximately 12.5 percent, then the remaining difference between this and the U.S. tax of 35 percent – in this case 22.5 percent.

The Huffington Post connected Clinton’s statements with the anticipated run for president by his wife, Hillary Clinton. Voters may take this as a signal that Hillary will pursue an agenda of corporate-friendly economic policy.

Check out my previous posts on the Clintons regarding the current state of taxation The Clintons Criticized For Estate Planning.

To further read on the subject on tax inversions in the U.S. also check out some of our other posts regarding this subject:

• Democrats Ask Obama To Act Alone On Inversions

• Mark Cuban Protests Tax Inversions

• What Corporate Inversions Are Telling Us (And What Washington Refuses To Hear)

• Treasury Secretary urges Congress to end inversions

• New Congressional Report Highlights Tax Inversions