Senate Majority Leader Harry Reid said he doesn’t expect the Senate to vote on legislation revamping corporate inversions this month.
“I kind of doubt it,” Reid said when asked if there would be a vote in September. When asked why not, Reid only chuckled as he walked into the chamber after his weekly Tuesday press conference.
The Senate has a packed schedule and only plans to be in session through Sept. 23, the day before the Jewish High Holidays begin.
Congress and the Treasury Department have been exploring ways to stem the growth of inversions, the growing trend of American companies buying foreign competitors, often times smaller businesses, then re-incorporating overseas in order to pay less in U.S. taxes. Forty-seven U.S. corporations have reincorporated overseas through corporate inversions in the past 10 years, far more than during the previous 20 years combined, according to the Congressional Research Service.
Secretary Jacob J. Lew said Monday in a speech at the Urban Institute that his agency could act soon.
“The Treasury Department is completing an evaluation of what we can do to make these deals less economically appealing, and we plan to make a decision in the very near future,” Lew said in his speech. “Any action we take will have a strong legal and policy basis, but will not be a substitute for meaningful legislation — it can only address part of the economics. Only a change in the law can shut the door, and only tax reform can solve the problems in our tax code that leads to inversions.”
Senate Finance Committee Chairman Ron Wyden, D-Ore., said he has been in contact with Lew and that he continues to work with ranking member Orrin G. Hatch, R-Utah, on the issue, which he said voters have concerns.
“At community meetings around my state when people would ask about inversions this summer, I said look, if you erode the business tax base, what happens is working families and other businesses have to pick up the freight,” Wyden said.
“What I’m doing is using every single day, and have now for weeks, focused on trying to produce a bipartisan effort,” Wyden added. “We've talked about it with Sen. Hatch. Our staffs have been at it day after day now for weeks ... and I'm encouraged."
Wyden said that the environment in the Congress remains highly partisan, which has made it difficult to reach a bipartisan solution to the inversion problem, but not impossible.
“I think it’s important to have a bipartisan stop-gap measure to plug the inversion loophole, and I believe that is consistent to do in line with major tax reform,” Wyden said.
Sen. Charles E. Schumer, D-N.Y., is expected to unveil his own proposal next week that is would further limit the amount of interest an inverted corporation can deduct from its taxable income.
In August, three Senate Democrats called on Obama to use executive action to address the issue.
Bridget Bowman and Katy O'Donnell contributed to this report.
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