Executive action needed to ‘stop the bleeding’ from tax loophole, senator says

Sen. Chris Coons (D-Del) called Sunday for the Obama administration to move unilaterally to stop companies from shifting their legal addresses overseas to reduce their taxes.

{mosads}The Obama administration is weighing executive action to tamp down on the practice, known as “inversion,” which is currently legal but has come under fire from critics who say it is unpatriotic.

“I have a problem with a mostly American company using a tax loophole to avoid paying their fair share,” Coons said on “Fox News Sunday.” “In the absence of congressional action, I do thing Treasury will step up and do something to stop the bleeding.”

But congressional action is exactly what’s needed to deal with the issue, countered former Michigan Gov. John Engler (R), president of the Business Roundtable.

Engler said inversion is a symptom of the greater problem of an outdated tax code that must be addressed. He said recent angst over inversion should serve as an impetus for Congress to act on major tax reform legislation.

He called on Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) “to get in a room” over the current August recess and hammer out a deal.

“We can have something ready to go when we get back,” Engler said. “Let’s not spend the time at Treasury trying to come up with little fixes, when we’ve got an opportunity to improve the competitiveness of the United States.”