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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBanks Cash In on Inversion Deals Intended to Elude Taxes
Jamie Dimon, the chief executive of JPMorgan Chase, recently said, I love America. Lloyd Blankfein, the chief executive ofGoldman Sachs, wrote an opinion article saying, Investing in America still produces the best return.
Yet guess whos behind the recent spate of merger deals in which major United States corporations have renounced their citizenship in search of a lower tax bill? Wall Street banks, led by JPMorgan Chase and Goldman Sachs.
Investment banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad (without actually moving). With seven- and eight-figure fees up for grabs, Wall Street bankers and lawyers, consultants and accountants have been promoting such deals, known as inversions, to some of the biggest companies in the country, including the American drug giant Pfizer.
Just last week, President Obama criticized these types of transactions, calling the companies engaged in them corporate deserters. My attitude, he said, is I dont care if its legal. Its wrong. He has suggested legislation, and Senator Carl Levin, the Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations, has proposed to make it more difficult for an American company to renounce its citizenship and tax bill by merging with a smaller foreign competitor.
. . .
These deals are expected to sap the United States Treasury of $19.46 billion over the next decade, according to the Joint Committee on Taxation. And that figure doesnt take into consideration any future inversions. Nor does it account for the possible loss of jobs and revenue that will ostensibly move overseas over time.
Yet guess whos behind the recent spate of merger deals in which major United States corporations have renounced their citizenship in search of a lower tax bill? Wall Street banks, led by JPMorgan Chase and Goldman Sachs.
Investment banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad (without actually moving). With seven- and eight-figure fees up for grabs, Wall Street bankers and lawyers, consultants and accountants have been promoting such deals, known as inversions, to some of the biggest companies in the country, including the American drug giant Pfizer.
Just last week, President Obama criticized these types of transactions, calling the companies engaged in them corporate deserters. My attitude, he said, is I dont care if its legal. Its wrong. He has suggested legislation, and Senator Carl Levin, the Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations, has proposed to make it more difficult for an American company to renounce its citizenship and tax bill by merging with a smaller foreign competitor.
. . .
These deals are expected to sap the United States Treasury of $19.46 billion over the next decade, according to the Joint Committee on Taxation. And that figure doesnt take into consideration any future inversions. Nor does it account for the possible loss of jobs and revenue that will ostensibly move overseas over time.
THE REST:
http://dealbook.nytimes.com/2014/07/28/banks-cash-in-on-mergers-intended-to-elude-taxes
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Banks Cash In on Inversion Deals Intended to Elude Taxes (Original Post)
Triana
Jul 2014
OP
littlemissmartypants
(22,548 posts)1. Thank you. nt
riderinthestorm
(23,272 posts)2. This is really important. I hope the legislation zips through.
Both parties should want this to happen....
(yes, yes, I know that means the Rethugs will reflexively block it. Never let it be said they haven't cut off their own noses to spite their face)