Bill Clinton Defends Corporate Inversions

Former President Bill Clinton offered a defense of corporate inversions today during an event at the Clinton Global Initiative.

The NY Times reports that Clinton defended the practice saying, “Like it or not, this inversion, this is their money.” Clinton went on to explain, “We have the highest overall corporate tax rates in the world, and we are
now the only O.E.C.D. country that also taxes overseas earnings.”

Clinton’s explanation sounds a lot like the one offered by Michael Steel, spokesman for House Speaker Boehner when the issue came up this summer. “Under President Obama, the United States has the highest corporate tax
rate in the developed world. The answer is to simplify and reform our
broken tax code to bring jobs home,” Steel said.

The President and Congressional Democrats didn’t see it that way. President Obama said the companies were exploiting a “loophole.” At his direction, the Treasury Department announced new rules this week designed to reduce the benefits available through inversion.

Corporate inversions became news this summer after a few high profile companies including Burger King announced plans to merge with foreign companies (in Burger King’s case the merger is with a Canadian chain called Tim Hortons). Inversion does not allow the companies to escape taxes on money earned within the U.S. but does allow them to avoid U.S. taxes on money earned abroad.