How an Obscure Tax Loophole Brought Down Obama’s Treasury Nominee

by Ken Wells, Jonathon Allen and Richard Rubin,  Bloomberg

So how did the previously obscure term tax inversions become part of Washington parlance, fodder for the next presidential campaign and the issue that helped derail a U.S. Treasury nominee?

Thank, or blame, depending on your perspective, cutting-edge tax lawyers, populist Democrats, a banana seller, a drugmaker, a hamburger chain, the 35 percent U.S. corporate tax rate, and a Wall Street banker named Antonio Weiss.

There is also the prospect that inversions could cost the U.S. Treasury up to $33.6 billion in lost revenue over the next decade, according to the congressional Joint Committee on Taxation.

Inversions are the name given to transactions in which U.S. multinational corporations shift their addresses abroad to more tax-friendly shores, often by merging with a smaller overseas company.  Read the entire story.

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