A far cry from the “political whopper that Democrats dreamed of,” the president’s election-year push on so-called tax inversions “has turned out to be pretty much a massive dud,” according to a scathing analysis in today’s Politico. As Politico notes, Democrats were mum on the latest major inversion threat – one backed by a top Democrat donor and ally – and have begun scaling back their rhetoric altogether, exposing the whole inversions scheme for the sham it is. Here’s more from the report:
“The one recent high-profile corporate name to consider the move… did so with the stamp of approval from top White House ally Warren Buffett. Almost no one is talking about the issue on the campaign trail. … Meanwhile, some influential tax policy analysts suggest any of the administration’s possible unilateral actions could make the problem worse, be deemed illegal, or wouldn’t have much impact at all. …
“Treasury Secretary Jack Lew gave a speech this week promising some type of unilateral proposals through the Tax Code to reduce inversions ‘in the very near future.’ Lew, however, offered no new specifics and couched his remarks in very mild language, dropping most of the fiery, populist ‘un-American’ rhetoric that Obama used on the issue in an interview with CNBC at the beginning of the summer.”
Politico isn’t alone in its blistering criticism. Members of the president’s own party distanced themselves from the campaign before it even launched, and numerous editorial boards and commentators have subsequently weighed in against the proposal, calling it a “stunningly destabilizing move” that would “drive more money and jobs from the U.S.”
It didn’t take long for the hypocrisy of it all to come to the fore either, with Bloomberg reporting that the president “won’t return campaign donations to executives, advisers and directors” – at least 20 of them – “who have profited from offshore mergers that reduce corporate taxes using a technique he has called ‘unpatriotic.’”
For more proof that the president’s inversions push has been a political stunt from the start, look no further than the statements of Treasury Secretary Jacob Lew himself. Just weeks before President Obama ramped up his rhetoric, Lew admitted that he did not believe the White House had “the authority to address this inversion question through administrative action,” “if we did, we would be doing more,” he added. Lew has not, to date, announced what unilateral action the president might take and instead this week “repeated proposals made by President Barack Obama” that would do nothing but send more jobs overseas.
There is, however, one silver lining to the White House’s “whopper of a strategy flop.” Republicans have seized on the opening to continue pressing President Obama to follow through on real tax reform that gets at the heart of the issue driving corporate inversions: America’s sky high tax rate. At 35 percent, U.S. companies face a tax rate that is the highest in the industrialized world, undermining competitiveness and creating an incentive to ship jobs overseas.
This week, House Ways Means Committee Chairman Dave Camp (R-MI) reiterated the need for the White House to put forth a plan to fix our broken tax code and help the private-sector create more jobs:
“Everyone agrees that tax reform is the only solution that will both keep companies from moving their headquarters out of the United States, and encourage more businesses to grow, hire and increase wages for American workers. …
“Even the Administration says the only meaningful solution to U.S. companies inverting is tax reform. However, they have not put forth a real tax reform plan. …
“Empty rhetoric and rifle shot bills will not keep American companies and jobs in this country. … We need, and the American people deserve, real action on fixing the tax code.”
And in an op-ed earlier this summer, Speaker Boehner said, “If we can reform our tax code, changing it from one that drives American jobs out of the country to one that supports sustained economic growth and brings jobs home it will go a long way toward resetting the economic foundation of our nation.”
Creating a simpler, flatter, fairer tax code is one of the many solutions Republicans have laid out to help fuel economic growth and help get more Americans back to work. Read more at GOP.gov/solutions.