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Treasury Secretary Jack Lew warned yet again that actions would be taken, without specific strategies identified, to prevent tax inversion. Increasingly, companies are trying to secure tax benefits by making acquisitions and moving headquarters abroad, as seen with Burger King’s merger with the Canadian Jack Horton’s. Not only does this give businesses an unfair advantage, but moving companies overseas tends to hurt the job market domestically, and in effect, exports jobs abroad.
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While Secretary Lew didn’t indicate there would be actual legislation to actually prevent such strategies, he has hinted that the prospects of moving abroad will be made less attractive to companies.
“There is some real probability–I’ve said certainty—that we’re going to take action … any company considering inversion should now be on notice that action will be taken.” He indicated that Treasury may “remove a lot of economic benefits of tax inversion, but it will not close the door—that requires legislation.”
