Allergan has some thoughts on Treasury’s new inversion rules. The Dublin-based company’s CEO said “For the rules to be changed after the game has started to be played is a bit un-American.” The game, of course, is over, as the Pfizer-Allergan merger is officially dead. At least Allergan got $150 million for its trouble. Pfizer is still scrambling to figure out how to restructure itself. Some are more sanguine about the Treasury regs. TPC’s Steve Rosenthal explains how Treasury’s new rules on earnings stripping go “well beyond just trying to curb tax-motivated corporate inversions, which is a positive development for tax policy.”
Meanwhile, inversion hopes remain. Six inversions are still pending, and there are no signs that Treasury’s new rules put those deals at risk. The biggest of them would merge Milwaukee-based Johnson Controls with Ireland-based Tyco.
A senior EU official comes to Washington to try to smooth the international tax waters. Politico reports that Margrethe Vestager, the European commissioner for competition, will sit down today with top White House and congressional officials who have been less than pleased with the EU’s efforts to crack down on US multinationals who’ve been cutting deals with member nations to minimize their tax bills. Some US officials claim Europe now wants to use those firms as a fiscal piggy-bank.
Tax me in St. Louis. City residents must vote every five years to retain a 1 percent earnings tax on people who live and work in St. Louis. They decided this week to keep it. The city argued that ditching the tax would have busted the city’s budget. Opponents said the tax is unfair, because it is often—but not always—waived in order to lure employers to move to the city.
The Tax Hound needs a new pair of shoes. She takes a closer look at tariffs and their impact on the price of household goods, like sneakers. At least two candidates for president—Bernie Sanders and Donald Trump—promise to raise tariffs. Consumers—and voters—might be better served if the impacts of a higher import tax were more transparent.
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2016.