What Will Be The Impact Of New Inversion Rules?

By The Associated Press

Published September 23, 2014 at 1:35 PM EDT

The Treasury Department has issued new rules governing corporate inversions after calls from President Barack Obama for "corporate patriotism." Obama is pictured here walking with Treasury Secretary Jack Lew (who was at the time the White House Cheif of Staff) on March 2, 2012. (Mandel Ngan/AFP/Getty Images)

Following through on a populist appeal from President Barack Obama for a new era of “corporate patriotism,” the Treasury Department stepped in Monday with new regulations designed to limit the ability of U.S. firms to seek refuge in lower tax countries.

The Treasury will make these so-called corporate inversions less lucrative by barring creative techniques that companies use to lower their tax bill. Additionally, the U.S. will make it harder for companies to move overseas in the first place by tightening the ownership requirements they must meet.

“This action will significantly diminish the ability of inverted companies to escape U.S. taxation,” Treasury Secretary Jacob Lew said. He added that for some companies considering inversions, the new measures would mean inverting would “no longer make economic sense.”

Damian Paletta of the Wall Street Journal joins Here & Now’s Jeremy Hobson to discuss the potential impact of the new rules, which take effect immediately.

Wall Street Journal: Obama Administration Issues New Rules to Combat Tax Inversions

Guest

Damian Paletta, economic policy reporter for the Wall Street Journal. He tweets @damianpaletta.