DeLauro urges Obama to deny tax dodging corporations

Stratford’s U.S. Rep. Rosa DeLauro (D-4) and five other members of Congress last week sent a letter to President Obama, urging action to deny federal contracts to inverted corporations — companies that exploit a loophole in current law by merging with a smaller foreign company and assuming that company’s address for tax purposes. That enables them to dodge billions in taxes while continuing to bid for, and win, taxpayer-funded federal contracts, according to DeLauro.

“The companies engaging in these tax gimmicks take advantage of our education system, our research and development incentives, our skilled workforce, our infrastructure, our patent and court systems, and our national security, all supported by U.S. taxpayers, to start and build their businesses,” DeLauro, Sen. Carl Levin (D-MI), Rep. Lloyd Doggett (D-TX), Sen. Dick Durbin (D-IL), Rep. Sander Levin (D-MI), and Sen. Jack Reed (D-RI) wrote.

“When the tax bill comes due, they renounce their citizenship.  But, perhaps even more outrageously, they also seek, and win, taxpayer-funded federal contracts from the same country they renounced.  Our federal contracting rules should not allow these companies to be rewarded with federal contracts.”

All six senators and representatives are co-sponsors of the No Federal Contracts for Corporate Deserters Act.

The rate of corporate inversions has picked up in recent years, with medical device maker Medtronic among the most recent to announce they are moving their mailbox overseas to avoid paying their fair share of U.S. taxes.

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