Lake Havasu City, AZ – U.S. taxpayers lose over $2.2 billion dollars a year due to tax inversions. “With the U.S. debt surpassing the $18 trillion mark this past month, any savings Congress can find to help offset our debt is a necessity,” Supervisor Buster Johnson stated. Tax inversions are when an American company merges with a foreign corporation in order to move their main headquarters to their nation thus avoiding corporate taxes. Financial analysis predicts that the amount taxpayers are losing due to these inversions will double if new companies are allowed to continue the practice. “During a time when Congress is looking for ways to trim their budget or impose more taxes on American citizens, they are continuing to allow companies to cheat the taxpayers out of billions of dollars,” Supervisor Buster Johnson stated. When a U.S. Company moves their main headquarters overseas they can take advantage of lower taxing rates while still continuing their material operations in the U.S. An example of this would be Burger King, who is in talks to acquire Canadian coffee-and-doughnut chain Tim Horton’s Inc. While Burger King would still operate in the U.S., their main headquarters would be in Canada allowing them to avoid the 35% corporate income tax rate in America for the 26.5% rate found in Ontario, Canada. “Several corporations have done this in recent years,” Johnson said. Another popular U.S. company who was in talks of doing a tax inversion was Walgreens. Due to the controversy surrounding the deal and pressure on the company, the tax inversion plan was abandoned. While moves like this hurt the taxpayers, they are a major benefit for corporations. Tyco International Ltd. for example moved their main headquarters overseas in 2001 saving them roughly $400 million a year in taxes. “Our tax code hasn’t been changed in almost 30 years,” Johnson stated. “Since the last tax overhaul in 1986, countries around the world have since then updated their tax code leaving the United States with the highest corporate income tax in the developed world,” Johnson said. “By looking at and reforming our code, we will make the United States more competitive which will in turn help to bring in and retain economic growth for our nation,” Johnson ended.
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