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SHOPPING FOR TAX RATES

The corporate rage these days is corporate inversions.  A U.S. Corporation merges with a foreign corp. to obtain the foreign jurisdiction’s lower tax rates.  The merger, in which the U.S. Corporation becomes the surviving entity, is tax-free at the corporate level.  But the U.S. shareholders, who receive no cash on the merger, still must pay tax. The U.S. Corporation’s defend these moves by claiming they need to lower effective tax rates to be more competitive in the global marketplace.  Yet, U.S. stock markets have reached record levels.  So then, what is the real reason for the stampede to escape U.S. tax?

SHOPPING FOR TAX RATES
(To tune of “April in Paris,” by Vernon Duke and E.Y. Harburg (1932))

Shopping for tax rates.
Corporate inversions.
Foreign conversions.
Now all the rave.

Shopping for tax rates.
Mergers to measure.
Profits we treasure.
And crave.

Who cares about morality?
Shareholders who’ll bear the tax?
Morality’s banality.
Numbers motivate our acts.
We’re,

Shopping for tax rates.
Don’t call it treason.
We know the reason.
Pure greed.

Lyric © 2014 by Robert S. Steinberg, Esquire
All rights reserved.

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