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U.S. NEWSTuesday 8 December 2015
Clinton offers new ‘exit tax’ on US-foreign company mergers
LISA LERER target what experts say is
Associated Press roughly $2 trillion in profits
WASHINGTON (AP) — U.S. companies are hoard-
Democratic presidential ing abroad to reduce their
front-runner Hillary Clinton taxes. Clinton will propose
on Wednesday will un- spending the revenue
veil a proposal for a new raised by the new tax to
“exit tax” aimed at crack- boost manufacturing jobs
ing down on corporate in the U.S., campaign aides
inversions, a practice that said. They spoke on condi-
permits U.S. companies to tion of anonymity ahead
merge with corporations of the official campaign
overseas to lower their tax announcement.
bill. The new tax would be Clinton’s proposals are part
part of a broader effort to of the economic agenda
Democratic presidential candidate Hillary Clinton speaks at Saban Forum 2015 in Washington.
Clinton on Wednesday will unveil a proposal for a new “exit tax” aimed at cracking down on
corporate inversions. (AP Photo/Jose Luis Magana)
her campaign has been partment has unveiled kind of behavior and call
rolling out this month. They new rules to deter com- it for what it is: gaming the
include boosting infrastruc- panies from considering tax system.” Under cur-
ture spending by $275 bil- inversions, officials say only rent rules, U.S. companies
lion and making other new Congress has the author- can reincorporate abroad
investments in research ity to halt the practice. if they acquire a foreign
and clean energy. Democrats favor immedi- company and transfer
Clinton is the overwhelm- ate action and are seeking more than 20 percent of
ing favorite to win the 2016 to use the issue as a politi- their shares to foreign own-
Democratic nomination. cal wedge ahead of next ers. The Obama adminis-
She faces two rivals for the year’s presidential elec- tration has proposed rais-
nod when the long, state- tion, accusing the Repub- ing that threshold to more
by-state primary contest licans of protecting cor- than 50 percent. Clinton
begins in February. porate loopholes. Top Re- will reiterate her support for
The November announce- publicans say the only way the change this week. The
ment of a plan to merge to adequately address in- White House and Clinton
drug-makers Pfizer and versions is to overhaul the believe that new standard
Allergan to create the tax code, making it more would discourage inver-
world’s biggest pharma- attractive for businesses to sion deals by requiring the
ceutical company reig- locate in the U.S. U.S. company to purchase
nited a fierce political de- Clinton has said she has a larger foreign entity.
bate over whether such “deep concerns” about Any company that still at-
deals should be permitted. the $160 billion drug com- tempts to move its head-
Under the deal, New York- pany merger and has quarters overseas for tax
based Pfizer would move called on Congress and reasons would be subject
its headquarters to Ireland, regulators to act immedi- to the new exit tax, which
where Allergan is based. ately to stop companies would levy taxes on foreign
That enables Pfizer to slash from shifting profits over- earnings at the time of the
its tax rate from around 25 seas. inversion deal. The prof-
percent this year to about “They’re doing it to save its a U.S. company earns
18 percent. Ireland’s lower money on taxes,” she said overseas are not taxed un-
corporate tax rate would last month at a campaign til they are brought back
have saved Pfizer nearly $1 event in Boulder, Colo- into the U.S., prompting
billion of the $3.1 billion in rado. “I want the Treasury many companies to hold
U.S. taxes it paid in 2014. Department to do every- cash and invest abroad to
Though the Treasury De- thing it can to stop that avoid the taxes.q
Trump calls for ‘shutdown’ on Muslims entering US
JILL COLVIN United States. Trump says Trump campaign man-
Associated Press in a statement released ager Corey Lewandowski
NEWARK, New Jersey (AP) by his campaign Monday says Trump’s proposed ban
— Republican presidential that his proposal comes would apply to “every-
candidate Donald Trump in response to the level of body,” including Muslims
says he is calling for a hatred among “large seg- seeking immigration visas
“complete and total ban” ments of the Muslim popu- as well as tourists seeking
on Muslims entering the lation” toward Americans. to enter the country.q
