The Obama administration will decide “in the very near future” what actions it can take to make it less profitable for U.S. companies to shift their legal addresses to other countries, Treasury Secretary Jacob Lew said Monday.
A growing number of U.S. companies are shifting their addresses abroad in an effort to reduce their U.S. taxes. The maneuver is known as a corporate inversion.
In a speech Monday, Lew said these companies are eroding the U.S. tax base and shifting the burden of funding the government to other taxpayers. He said the best way to address the issue is for Congress to overhaul the U.S. tax code and make it more attractive for companies to stay in the U.S.
With tax reform facing an uncertain future in Congress, Lew pressed lawmakers to pass legislation making it harder for U.S. companies to pull off corporate inversions.
“Still, the administration is clear-eyed about the possibility that Congress may not move as quickly as necessary to respond to the growing wave of inversions,” Lew said. He said Treasury is studying “what we can do to make these deals less economically appealing.”
