Editorial: Patriotic psychopaths?
The other day, President Obama delivered a stinging rebuke to the steadily increasing number of U.S. companies that are avoiding federal taxes by shifting their tax domiciles overseas in deals known as “inversions.” Without much hope of a response, he called on Congress to pass laws to curb the practice.
He also addressed the runaway corporations themselves, asking them to practice “economic patriotism,” keep their headquarters here in the U.S. and pay their fair share of the cost of running the country.
In both cases, his pleas are sure to fall on deaf ears.
Congress isn’t interested because many of its members’ lifestyles are funded by those same companies. Tightening the rules on the practice would be biting the hands that feed them — literally — in fancy restaurants and resorts.
Nine of these so-called inversion deals — which occur when a U.S. company acquires or sets up a foreign company, then moves its U.S. “tax domicile” to that company and its lower-tax home country — have been reached this year by companies ranging from banana distributor Chiquita Brands International Inc to drugmaker AbbVie Inc.
The transactions are on pace to set new records ... the first inversion was carried out 32 years ago.
“Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes,” Obama groused.
“They’re technically renouncing their U.S. citizenship, they’re declaring their base someplace else even though most of their operations are here ... some people are calling these companies ‘corporate deserters.’”
Some bills have been drafted, by Democrats in Congress, to limit inversions — and Obama said he’s prepared to push for their passage. Republicans say they prefer a change to inversions to be part of a long-stalled effort to reform the U.S. tax code.
Meanwhile, we’re unlikely to see companies volunteer to stop the practice. After all, corporate officers are prohibited, by statute and past court decisions, from considering anything but stockholders’ profits when making decisions about their company’s future.
In light of the Supreme Court’s decision granting them citizenship status, some analysts are writing that successful corporations MUST be psychopaths. After all, the classic definition is “a personality disorder characterized by enduring antisocial behavior, diminished empathy and remorse, and disinhibited or bold behavior.”
Failing to take steps that would minimize tax payments, even if that meant abandoning middle-class Americans to shoulder a greater burden, would mean a CEO was derelict in his or her duty.
“You shouldn’t get to call yourself an American company,” Obama said, “only when you want a handout from American taxpayers.”
He’s right, of course. But who’s listening?