Sen. Dick Durbin (D-Illinois) is pushing to curb corporate tax dodging through merger deals known as inversions.
Durbin and three other Democrats on Capitol Hill unveiled today a bill called the “No Federal Contracts for Corporate Deserters Act.”
The proposed legislation would deny federal contracts to businesses that incorporate overseas, are at least 50 percent owned by U.S. shareholders and do not have substantial business opportunities in the foreign country in which they are incorporating.
Durbin says they are trying to tip the scales in favor of American companies.
“If there’s a competition for like products with the Department of Defense, one product being made by an American company based in America, paying its taxes in America, and another company that’s decided to put their post office box in the Cayman Islands and declare that they’re a foreign corporation and can avoid federal taxes, we’re going to give advantage America,” Durbin told WGN by telephone from Washington.
The White House estimates that nearly $20 billion in corporate taxes could be lost over the next 10 years because of corporate inversions.
Among those considering an inversion is Deerfield-based Walgreens. In a statement today, Walgreens says it expects to announce a decision on that and other issues related to its acquisition of Switzerland-based Alliance Boots in the coming weeks.