Congress Must Move to Counter Corporate Inversions, Neal Says

A new wave of inversions has gripped the corporate world; as yet another US multinational has renounced their US corporate citizenship. In a record-setting $160 billion deal, Pfizer and Allergan have agreed to merge and create the world's largest pharmaceutical company. With this merger, the US tax base continues to erode. Perhaps this latest inversion will prompt Congress to come together on reforms so this does not continue to happen. These inversions happen because of a broken tax code which allows these deals to take place.

Congress must take action immediately, as we did in 2004, to stop the flow of these inversions until we can a meaningfully fix our broken tax code. Our rudimentary tax code remains ill-equipped to handle our increasingly globalized and digital economy. As a result, we have seen an explosion of multinational companies shift profits, activities, and property from high-tax countries to low-tax countries. By the OECD's best guesses, countries are losing as much as $240 billion a year in lost revenue.

I commend the Obama Administration efforts for working with the international community on finding commonsense solutions to address these taxation challenges. I look forward to hearing the testimony from our distinguished panelists on the best ways to address the challenges ahead of us, and ensure that the OECD process is not one where our jurisdictions try to grab revenue that rightfully belongs to the US.

But ultimately, the task of fixing our tax code falls on us, and specifically this subcommittee. Mr. Chairman it is my hope that we can use this hearing as a springboard towards meaningful reform. One that broadens the base, lowers the rate in a revenue neutral way, like the Obama Administration has proposed.