Corporations Trying To Screw American Government of Taxes in Feeding Frenzy of Offshore Mergers

[Fred Sanders]

http://www.reuters.com/article/2014/07/28/mergers-bonds-idUSL2N0Q311Q20140728

Read it and weep for America and the kindled fires of fascism:

"So far this year there have been about nine inversion M&A trades closed or announced, the biggest wave of US companies moving offshore their tax home since 2012.

"One incentive to do a tax inversion is to remain competitive with those who have already done a deal and reduced their tax costs."

The tax savings can be huge: AbbVie's acquisition of Shire for US$53.6bn is expected to reduce AbbVie's corporate tax rate to around 13% by 2016, compared with 22% in 2013.

Gaining access to cash piles is as much of a driver as the tax savings. US companies can use offshore cash to pay for share repurchase programmes, and Medtronic will be able to use its overseas cash to finance its US$42.9bn purchase of Covidien.

"These drug companies pile up huge cash hoards overseas that they cannot access without paying taxes to repatriate the funds," said Carol Levenson, a credit analyst at Gimme Credit.

"Obviously if they can structure a deal so that they can use these funds without paying taxes on the repatriation, they will strongly consider it."

[msongs]

1. democrats and republicans in congress and the white house rejoice in their creation nt