American companies are turning in their U.S. passports to avoid paying the world's highest tax rate on business income, an investment economist told Newsmax TV
"MidPoint" host Ed Berliner on Thursday.
John Browne, senior economic consultant to Connecticut-based Euro Pacific Capital, defended the latest wave of "inversion" deals — in which companies here reincorporate abroad by acquiring overseas firms — as a legal and logical response to an increasingly unfriendly American business climate.
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"These are not tax havens like Bermuda or the Caymans, which have zero tax," said Browne. "There are other things besides tax that are important: patent protection, physical protection, police, law and order, a legal system and the local market."
Companies can find all of those attributes, and a much lower corporate tax rate, in countries such as Ireland, Switzerland and Great Britain, said Browne.
U.S. Pharmaceutical companies "inverting"
to Ireland are the latest hot trend in big business.
But the Obama administration's Treasury Department wants Congress to put a stop to the practice — employed by about 50 U.S. multinational companies in the last decade.
Browne said the U.S. government would be better served cutting taxes.
"Having the highest tax rate in the world – at 40 percent – is making American business extremely uncompetitive for actually earning money," he said.
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