Lew calls on Congress to end inversions

Treasury Secretary Jack Lew said Tuesday that U.S. companies won’t stop making offshore deals to dodge paying taxes unless Congress intervenes.

{mosads}”I certainly hope the action we took administratively will slow the trend. I have no guarantee. What it does is take down the economic value [of inversions], but it doesn’t eliminate it. It would take a change of law to eliminate the benefit,” Lew said at a Washington forum hosted by the Petersen Institute.

The administration announced new rules last month aimed at reducing the economic benefits of tax deals. The new rules seek to make it more difficult for U.S. companies to move their addresses overseas, or “inverting,” in order to dodge American taxes.

Lew admitted that the process was legal.

“If we can do business tax reform, we would take away some of the pressures that drive companies to invert,” Lew said. “I’ve never said that there’s not economic benefit to inversions, nor have I questioned the legality of it.”

“I’ve said it’s wrong. And why is it wrong? I think it’s wrong for a company to do business in the United States … but to change [its] address for tax purposes, to go from one jurisdiction to another to avoid paying taxes I believe is wrong.”

“The law shouldn’t allow it,” Lew added.