This is not the first time Tyco, which started as a New Jersey-based research laboratory for the US government in the 1960s before growing into a global behemoth with workers in about 50 countries, has made use of tax-avoidance measures. In 1997, it merged with a Bermuda-based company in another corporate inversion before moving its headquarters to Switzerland in 2008. It moved to Ireland in 2013.
"It is outrageous when large multinational corporations game the tax code and shelter money overseas to avoid paying their fair share, including through maneuvers like inversions. As I have said throughout my campaign, these efforts to shirk US tax obligations leave American taxpayers holding the bag while corporations juice more revenues and profits."
- A 50 percent threshold for foreign company shareholder ownership after a merger before an American company can give up its US identity.
- An "exit tax" to ensure multinational companies that change their identity pay a fair share of the US taxes they owe on earnings stashed overseas.
- A crackdown on "earnings stripping," one of the key benefits of inversions.
"The potential Johnson-Tyco merger would be a disaster for American taxpayers," Sanders said. "Profitable companies that have received corporate welfare from American taxpayers should not be allowed to renounce their US citizenship to avoid paying US taxes. These corporate inversions must stop."My message to these corporate deserters is simple: You can't be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government," Sanders continued. "If you want the advantages of being an American company then you can't run away from America to avoid paying taxes."
- Ending the rule allowing American corporations to defer paying federal income taxes on profits of their offshore subsidiaries.
- Closing loopholes allowing American corporations to artificially inflate or accelerate their foreign tax credits.
- Preventing American corporations from claiming to be foreign by using a tax-haven post office box as their address.
- Preventing American corporations from avoiding US taxes by "inverting." Under Sanders' bill the US would continue to tax such a company as an American corporation so long as it is still majority owned by the owners of the American party to the merger or acquisition.
- Prevent foreign-owned corporations from stripping earnings out of the US by manipulating debt expenses.
- Preventing large oil companies from disguising royalty payments to foreign governments as foreign taxes.