I sincerely doubt that the President suddenly “reacted” to the issuance of the Panama Papers findings. I think he must be in on the clean-up.
Rosette Newcomb, US Uncut, April 5, 2016
President Obama has ordered the U.S. Department of the Treasury to stop corporate tax inversions.
The move comes on the heels of the historic Panama Papers leak and the subsequent resignation of Iceland’s prime minister, Sigmundur David Gunnlaugsson, who was found to have used a shell corporation to hide assets overseas.
“@USTreasury has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes” —@POTUS
— The White House (@WhiteHouse) April 5, 2016
Inversion is one of the multiple corporate tax loopholes companies exploit to avoid paying U.S. taxes. Under inversion, an American company acquires a foreign competitor, then re-registers in the home country or territory of that competitor to get around American tax laws. The new rules enacted by the Treasury Department will put a cap on new foreign acquisitions of U.S. assets to skirt ownership requirements for potential inversions in the future.
“When politicians perpetuate a system that favors the wealthy over the middle class, its not surprising that people feel like they cant get ahead,” President Obama said on Tuesday morning. “Rather than doubling down on policies that let a few big corporations and wealthy people make their own rules, we should build an economy that gives everyone a fair shot.”
The Treasury Department’s new rules could completely derail the proposed $150 billion merger between pharmaceutical giants Pfizer and Irish-based Allergan, along with other proposed corporate inversions. The New York Times described the new rules, outlined in a 300-page document, as “thorough and, if not exhaustive, exhausting.” Obama praised the Treasury Department’s latest moves, but called on Congress to pass legislation permanently ending the corporate inversion loophole.
“Only Congress can close it for good,” Obama said.
Iceland’s prime minister was the first of what could be many world leaders to face accountability in response to the Panama Papers. Gunnlaugsson, in particular, was found to have holdings in the British Virgin Islands, some of which included his own country’s debt. The Panama Papers revealed him to be an officer of Wintris, Inc., which is registered in the European tax haven of Luxembourg. Wintris is a shell company set up by Panamanian law firm Mossack Fonesca specifically for the Icelandic Prime Minister’s tax evasion.