Treasury Secretary Calls For Corporate Tax Code Overhaul
RENEE MONTAGNE, HOST:
U.S. Treasury Secretary Jacob Lew says, there has been an uptick in the number of U.S. corporations moving their headquarters overseas in an effort to pay less tax. In a moment, we'll talk to David Wessel about what's allowing these moves to happen. We begin with NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: In recent months there's been a small wave of U.S. companies doing what are called inversions - they merge with a foreign company and then move their legal headquarters overseas. The move means they no longer have to pay federal taxes when they bring overseas profits back into the United States. The U.S. corporate tax rate is among the highest in the world, although many companies are able to lower their effective rates through deductions and exemptions. Appearing on CNBC yesterday, Lew said it was time for Congress to address the issue.
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JACOB LEW: We should have some economic patriotism here. It's not right to take an American firm to benefit from all of the things we do in the United States to make it a safe place to the business but then to say, I don't want to pay taxes here - to shift my corporate address overseas.
ZARROLI: Lew said he believes the IRS, by itself, can't do much about inversions and Congress needs to pass a law addressing the issue. He said, the law should be part of a comprehensive corporate tax reform bill - something many Republicans are also calling for. But it's not clear that such a bill can be passed in an election year and Lew says, if necessary, Congress should address the issue with separate legislation. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.