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Attempt to Invert Inversion

Published by FENG (Financial Executive Networking Group). The benefits to the U.S. economy when foreign companies invert to American companies if the U.S. lowers its corporate income tax rate.


If the U.S corporate tax rate were to be lowered to levels below the corporate tax rate of most of the rest of the world, the practice of inversion by corporations domiciled in the U.S. would by and large cease and desist. Not only would U.S.-based companies not look to merge with foreign corporations, companies domiciled in countries whose corporate tax rate was now higher than the U.S. might examine the benefits of inverting with U.S.-based entities. The effect of such a shift in U.S. tax policy would have a tremendous effect on GDP and the unemployment rate. It could produce an economic resurgence the likes of which we have not seen since the post-WW II era. Or ever, for that matter.