gamesmith94134: The inverted world of Mobile Capital



It was interesting in reading de Lafayette's Double Irish Dutch Sandwich that how Corporate America turned into Corporate Bermuda; and I believe it is true that the inversion took place as the America Tax Law would allow company to M&A in foreign soil; and It sound like US tax system have created the magnet that attracts foreign investment but their merger to US. So, like Ms. Tyson complains, "This undermines their ability to compete with foreign companies in acquiring other US companies. It also makes investments by US shareholders in domestic companies less attractive relative to investments in foreign companies that can distribute their foreign profits in the US without an additional tax penalty." To offset this, US multinationals take advantage of a deferral option in US tax law, instead, they took the deferred tax to merge or buy off the foreign company to make inversion or redomicile inevitable. perhaps, I would remind Ms. Laura Tyson globalization could be the factor to the behaviour how corporate can circumvent US tax law with deferred tax by diversify its profits from inversion. I do not think 50% corporate Tax and domestic tax enhance R&D or anything. I see Mr. de Lafayette's “Double Irish Dutch Sandwich” is more convincing and patent in other nations are also protected under the law; and many find TIPP is lopsided in favoritism and apply protectionism to their defense.

First, I would recommend Ms. Laura Tyson to research on the Chinese policy on the purchases on housing that the homestead clause, and limitation to financing or merger to own land or to build that applies 'do it or leave it' cut turnovers in pricing for housing industry. It cut prices to 12% and sustains in stable manner in the recent study.

Second, tax reform under Mr. Obama is not going to work in the Congress now; even with the 50% Corporate tax. It only adds more weight to the 200 lbs more and more profits to the lawyers. Another add-on is just like another Obamacare that is promising but not practical to users who are disadvantage to merge in US.



Thirdly, we can focus on the import and export that are taxed on the dock; perhaps, World Trade Organization can use an Universal anti-trust law and Sherman act to limit merger and acquisition on the homestead clause like the percentage on operations and productivity for all corporation. It may not be applied to Corporate America but an universal treaty that eliminates shell companies and inversion that are presently abused.

Eventually, many would see the tax war cannot resolve the inversion; we must take another approach in reviving the genuine quality of tax law. We cannot delay the process of application on foreign and domestic tax law; if Mr. Obama is finding the hard time to pass his tax law in our Congress. personally, I prefer the third option in the universal Tax Law that would cut waste and time. Let World Trade Organization to prepare a plausible resolution of further damage of merger and defiance of tax supportive measures.

I think our Congress is overweight with it tax loophole and deferred tax. They builds protectionism to fend off invasion and created its jumping board to invade other is not a good defense. Fair trade must apply.



May the Buddha bless you?

