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.