The only practical solution to the inversion problem is to eliminate the incentive to invert , while simultaneously encouraging new companies to organize in the United States . competitive in the global market , current domestic companies will not be incentivized to invert , and new companies will be more likely to organize in America . Consequently , the U . S . tax base will expand , which will minimize Treasury losses due to the lower tax rates . Reducing corporate tax rates will also allow companies to invest their tax savings into the American economy , by increasing wages and adding jobs .
Due to the significant operational savings and increased sales potential Johnson Controls will achieve by combining with Tyco , the merger of the two companies is a smart move , regardless of the significant tax savings . The only real benefit of changing the corporate address to Ireland is for the significant tax advantages . If the United States had a more competitive corporate tax rate , not only would Johnson Controls likely maintain its domestic address , other companies all over the world would be looking to come to America — rather than Ireland .
1
Johnson Controls and Tyco to Merge , JOHNSON CONTROLS ( Jan . 25 , 2016 ), http :// investors . johnsoncontrols . com / news-and-events / press-releases / 2016 / 01-25-2016-120234733 .
2
2015 Federal Budget in Pictures , THE HERITAGE FOUNDATION , http :// www . heritage . org / federalbudget / corporate-tax-rate ( last visited Feb . 17 , 2016 ).
3
Howard Gleckman , Tyco , Tax Inversions , Income Shifting , and Lost Revenue , TAX POLICY CENTER ( Jan . 26 , 2016 ), http :// taxvox . taxpolicycenter . org / 2016 / 01 / 26 / tyco-tax-inversions-income-shifting-and-lost-revenue / (“[ I ] nversions and other income-shifting techniques reduced Treasury revenues by as much as $ 111 billion in 2012 .”).
4
Janet Novack , The Tax Inversion Rush — In One Handy Graphic , FORBES ( Sept . 10 , 2014 , 11:05 AM ), http :// www . forbes . com / sites / janetnovack / 2014 / 09 / 10 / the-tax-inversion-rushin-one-handy-graphic /# 65b4df2973a1 ( showing that in terms of dollar value , over half of all inversion deals since 1996 occurred in 2014 ).
5
Fact Sheet : Treasury Actions to Rein in Corporate Tax Inversions , U . S . DEPARTMENT OF THE TREASURY ( Sept . 22 , 2014 ), https :// www . treasury . gov / press-center / press-releases / Pages / jl2645 . aspx ; Fact Sheet : Additional Treasury Actions to Rein in Corporate Tax Inversions , U . S . DEPARTMENT OF THE TREASURY ( Nov . 19 , 2015 ), https :// www . treasury . gov / press-center / press-releases / Pages / jl0281 . aspx .
6
The inversion deal Johnson Controls announced would not qualify under Clinton ’ s plan , because post inversion , Johnson Controls shareholders will own fifty-six percent of the equity of the combined company . Johnson Controls and Tyco to Merge , JOHNSON CONTROLS ( Jan . 25 , 2016 ), http :// investors . johnsoncontrols . com / news-and-events / press-releases / 2016 / 01-25-2016-120234733 .
7
Ending Inversions and Investing in America , HILLARYCLINTON . COM , https :// www . hillaryclinton . com / briefing / factsheets / 2015 / 12 / 08 / ending-inversions-and-investing-in-america / ( last visited Feb . 17 , 2016 ).
8
Bernie Sanders on Corporate Regulation , FEELTHEBERN . ORG , http :// feelthebern . org / bernie-sanders-on-corporate-regulation / ( last visited Feb . 17 , 2016 ).
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