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August 21, 2014
martinwolf 
Analysis

Inverting the Incentives

 


 

Talk of "inversions" is on everybody's lips, from CEOs looking to reduce their tax burden to policy makers looking to block them.
 

In an article posted on LinkedIn, Marty Wolf analyzed the recent pattern of inversions and the negative tax incentives behind them. While inversions have so far been limited to non-IT sectors, seven of the top fifteen companies storing cash abroad are IT companies - and accessing that cash is much more expensive as long as the companies remain headquartered in the United States.
 

Tax inversion, originally dating from the 1990's, has resulted in more than 50 American multinational companies emigrating. Such deals can be highly lucrative to participating companies, which in some cases can see a difference in tax rates in the double digits - directly contributing to higher net income, higher EPS for shareholders, and higher profit margins.
 

Marty concludes with a reminder that "the biggest issue confronting the economy at this time is not one of tax 'fairness' or 'equality' but driving job growth - and to capture jobs, U.S. tax policy makers need to start here now."
 

To read the full article, click here.

About martinwolf    

 

                
                Walnut Creek, CA                                                Bangalore, India

With offices in the San Francisco Bay Area and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed nearly 125 transactions in fifteen countries and sold six divisions of Fortune 500 companies. 

 

The firm is also a presenting sponsor of the Global IT M&A Forum.   

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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"Unless legislators start addressing the onerous tax climate, the last guy out of America can close the door behind him."

 

Marty Wolf
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