We Need a Serious Approach to International Tax ReformApril 25, 2016
While the Obama administration touts its recent rules to limit corporate inversions as a step forward towards fixing our broken tax code, it is clear this administration fundamentally misunderstands the problems that are driving American companies abroad. In the long run, punitive Treasury Department regulations will only make America less competitive while this administration ignores the core problem: a hopelessly outdated corporate tax code.
While President Obama publicly insists he wants tax reform, his administration has sought to criticize the components of any meaningful plan. This was evident in a speech given last month by Jason Furman, chairman of the president’s Council of Economic Advisers, who objected to bipartisan proposals for the creation of an intellectual property tax box regime here in the United States.
Under an IP box, the profits that accrue to patents and other types of intellectual property are taxed at a lower rate than other forms of revenue. The motivation for doing so is to induce multinationals to keep their intellectual property in the country.