Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Inversions To Be An Election Hot-Button Issue

Author: James F. McDonough

Date: August 4, 2014

Key Contacts

Back

Corporate inversions, in which a U.S.-based multinational acquires a smaller, foreign firm in order to re-domicile in a new, lower-tax country, have become a serious issue in American politics recently. Now, it appears that this issue may be a powerful motivator in the upcoming midterm House and Senate elections this November, according to The Wall Street Journal

A renewed push coming from the White House brought the issue even further into the public spotlight, alongside a coordinated drive from the Democratic party to effect legislation that will limit or halt the practice, the news source explained. Many Republicans agree that the issue should be addressed, but are halting bills that would curb the practice, hoping instead for a complete overhaul of the corporate income tax. These right-wing politicians note that the U.S. has the highest on-paper corporate income tax rate in the developed world. They say that they haven’t seen any proposals from the White House that would solve the problem.

Democrats have made a number of proposals that would alter the corporate tax code, including one that would change the requirement regarding the acquired company’s ownership share of the joint company that is created in an inversion, according to the Journal. Currently, the requirement is that the foreign company’s shareholders must be given at least a 20 percent share in the new company, meaning that it is frequently in the best interests of shareholders in the U.S. company to give up a portion of their shares in exchange for a significantly lower tax burden. A proposal from Sen. Carl Levin, D-Michigan, would raise this requirement to 50 percent.

“This is an issue that understandably gets people very angry,” Rep. Chris Van Hollen, D-Maryland, told the news source. “If Republicans are going to oppose our efforts in this area, they are going to have to explain why they are shielding American corporations that are deserting the U.S. in order to dodge their obligations to the country and American taxpayers.”

It seems that 2014 is the year of corporate tax inversions. Frank Brunetti and I have written about this topic at tremendous length due to all the new information brought to light about this subject.  Find out more about the companies involved in corporate tax inversion and what Washington is doing about it here:

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!