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WASHINGTON (AP) — Aiming to sidestep a logjam in Congress, the Obama administration is looking for steps it could take on its own to prevent American companies from reincorporating overseas to shirk U.S. taxes, officials said Tuesday.
President Barack Obama has denounced so-called tax inversions as unpatriotic and has urged Congress to stop them, in an election-year push that Democrats hope will appeal to middle-class voters who feel corporate America isn’t paying its fair share. But Republicans and Democrats disagree about the best solution, rendering congressional action this year unlikely.
Tinkering with inversions without going through Congress would open up Obama to charges he’s unilaterally rewriting the tax code, just as House Republicans are already suing Obama for allegedly exceeding his authorities. Last month, Treasury Secretary Jacob Lew said the administration had examined the tax code and determined that without new laws, its options were limited.
“We do not believe we have the authority to address this inversion question through administrative action,” Lew said.
But on Tuesday, the Treasury Department said that while only legislation can fully fix the problem, the Obama administration was searching for ways to provide a partial fix, warning that corporate inversions are actively eroding the U.S. tax base.
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