Tags: Lilly | Caterpillar | tax reform | inversion

Lilly, Caterpillar CEOs See Need for Tax Reform, Rather Than Inversion Ban

By Dan Weil   |   Friday, 25 Jul 2014 11:23 AM

Two Fortune 500 CEOs say President Barack Obama would do better reforming the corporate tax code than trying to push Congress to pass legislation outlawing tax inversions.

Inversions consist of a U.S. corporation buying an overseas company and then changing its headquarters to the overseas location.

The idea is to avoid higher U.S. corporate taxes, which can total as much as 35 percent. Inversions are becoming quite popular with big companies seeking to reduce their tax burdens.

For example, pharmaceutical giant AbbVie of North Chicago, Ill. agreed earlier this month to buy U.K. competitor Shire for $54 billion, the biggest takeover so far this year. AbbVie plans to domicile in Britain.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

U.S. corporate taxes are too high, Eli Lilly CEO John Lechleiter and Caterpillar's Doug Oberhelman told CNBC.

"The current U.S. tax system puts U.S. companies at a disadvantage," Lechleiter said. "Some of these companies acting on inversions . . . are simply trying to level the playing field. If we've got a concern about inversions, we need to tackle our tax code."

Oberhelman agreed. "There is no question that a comprehensive, full-blown tax reform in this country is absolutely needed and will absolutely stimulate growth," he said.

Even some Democrats are unenthusiastic about Obama's proposal to retroactively ban inversions.

"Do we get something done on this now, or do we make it part of tax reform overall, which I hope we can begin to address as soon as the election is over?" Sen. Bob Casey, D-Penn., told Bloomberg.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

Related Stories:

© 2015 Newsmax Finance. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved