US Tax Code Continues To Stunt Growth
The latest corporate merger has once again cast light on the complex U.S. tax code. Pfizer which is based in the U.S. plans to acquire British based AstraZeneca in a so called 'inversion' that would result in the combined company having its tax residence in the UK which has lower tax rates. The move has been criticized by politicians on both sides of the pond. However the larger issue is why haven't US politicians caught on to impetus behind this very old maneuver? U.S. heavy equipment manufacturer Caterpillar has avoided or deferred paying $2.4 billion in U.S. taxes by shifting most of the overseas sales for replacement parts to a Swiss subsidiary where it negotiated a 4-6% tax rate. A Senate investigation found that Apple paid virtually no corporate income taxes on billions of dollars in income over the past four years. Its widely reported that US corporations have an estimated $2.1 trillion in untaxed profits overseas. The rhetoric of the Obama administra...