Senator Rand Paul told Futures magazine that the rush of American companies moving operations outside of the nation is due to failed authors of the U.S. tax code. The statement comes days after U.S.-based Medtronic purchased Covidien for $42.9 billion and planned to move its operations to Ireland.
“I blame the tax code and those who wrote the tax code,” said Senator Paul regarding the record number of inversions by U.S. companies. “I'm on the [Senate Permanent Subcommittee on Investigations] that Senators Levin and McCain brought in Apple to read them the Riot Act, make them swear under oath and basically chastise them for maximizing profit and minimizing taxes for their stockholders.”
Senator Paul said that antiquated tax laws have made the U.S. uncompetitive against countries in North America and Europe and called for Members of Congress to take a moment to recognize their faults.
“Rather than bringing Apple in, we should've brought a big mirror, so [Congress] could look in the mirror and see where the problem is. The problem arose from legislators who wrote a crummy tax code. The problem arises from having a corporate tax cut that is twice what Canada's is and nearly three times what it is in Ireland. Money goes where it's welcomed, and money has been flowing overseas. I don't fault corporations for doing what they're supposed to do, which is maximize their profit.”
Medtronic, which is based in Minneapolis, joins 44 other companies that have engaged in an inversion, including 12 in the past two years. Just this past week, Illinois-based AbbVie made an initial offer of $46 billion for Irish drug maker Shire Plc. Meanwhile, multinational companies like Apple have parked nearly $2 trillion in tax-friendly nations.
In the exclusive interview with Futures magazine, Senator Paul proposes a number of solutions, including a bill that would allow companies to repatriate capital. The full interview with Senator Rand Paul covers a wide-swath of market and political topics including his views on auditing the Federal Reserve and U.S. gold reserves, and an update on when the Senator will decide on whether he will pursue the U.S. presidency.
The entire interview will be available in print in Futures’ upcoming issue, the publication’s 500th edition.
Speaking of our 500th issue, if you have old issues, it may pay off for you. We want you to celebrate with us. If you would like to enter our latest contest, simply take a digital close-up of yourself with your oldest or favorite issue of Futures and send it to us. It could be the issue that sparked your interest in trading or the one that contained the strategy that turned your trading profitable.