By Michael Cohn
A group of Democratic lawmakers in the House and Senate have re-introduced legislation that would ban federal contracts for companies that move their headquarters overseas, but only on paper, in order to avoid paying U.S. taxes.
Senators Dick Durbin, D-Ill., Jack Reed, D-R.I., Sheldon Whitehouse, D-R.I., and Al Franken, D-Minn., joined Rep. Rosa DeLauro, D-Conn., Sander Levin, D-Mich., and Lloyd Doggett, D-Texas, in introducing legislation Thursday would prohibit federal contracts to companies that move do so-called tax “inversions,” in which U.S. companies change their tax domiciles to countries with low-tax rates, typically by merging with a foreign company.
A surge of inversion announcements last year led Democrats in the Senate and House to introduce several different measures to stem the tide (see Congressional Democrats Introduce Bill to Ban Federal Contracts to Companies Moving Abroad). Democrats contend that Republicans in both chambers refused to support the legislation, however, even though similar measures received bipartisan support in the past.