Congressman Slams Pfizer-Allergan Merger as Tax Inversion
Pfizer’s proposed merger with Irish drugmaker Allergan is catching flak from some members of Congress who are blasting the trend of companies pursuing foreign mergers for tax purposes.
The ranking member of the House Ways and Means Committee, Rep. Sander Levin (D-Mich.), has held Pfizer’s deal up as an example of the tax inversion phenomenon. He urged Congress to take action against such corporate tax avoidance measures.
“The fact that American companies, including Pfizer, continue to pursue inversions makes clear additional steps are needed to stop this trend,” Levin states in a release.
His statement was in response to a Treasury Department letter issued the same day that says the department is implementing measures to hit companies in their wallets for attempting tax inversion.
The letter, written by Treasury Secretary Jack Lew, was addressed to the chairs and ranking members of the House of Representative’s Ways and Means Committee and the Senate’s Finance Committee.
Lew tells the legislators that “we intend to issue … targeted guidance to deter and reduce further the economic benefits of corporate inversions.”
However, the letter stresses that the Treasury Department’s ability to restrict tax inversion efforts is limited, and “only legislation can decisively stop inversions.”
A Treasury Department spokesman declined to elaborate on the letter.
Read Lew’s letter here: www.fdanews.com/11-19-TreasuryLetter.pdf.